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Hyatt Hotels beats Street estimates, doubles first quarter profit

Published: 15:53 03 May 2011 BST

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Hyatt Hotels Corp (NYSE:H) said Tuesday that it doubled its first quarter profit as the company benefited from improved occupancy and hotel rates at home and abroad.

For the three months ending March 31, the Chicago-based company, whose brands include Hyatt Regency and others, posted net income of $10 million, or $0.06 per share, compared to a profit of $5 million, or $0.03 per share, a year earlier.

Adjusted for special items, net income was $11 million, or $0.07 per share. Total revenue rose 4% to $875 million.
Analysts expected earnings of $0.05 per share, on revenue of $860.51 millon.

The RevPAR, or revenue per available room of owned and leased hotels open at least a year, an important metric used for the hotel industry, increased 2.0%, or 1.4% excluding the effects of currency. The company said that renovations at several of its owned hotels, including the Grand Hyatt New York, negatively impacted RevPAR in the segment by roughly 400 basis points, as well as operating margins.

"Transient demand was very strong in the first quarter with both occupancy and rate improvements across many markets," said president and CEO Mark S. Hoplamazian.

"We are very pleased with the performance of our hotels, particularly the strong continuing increases in RevPAR in our Hyatt Place and Hyatt Summerfield Suites properties."

In the owned and leased hotels unit, occupancy improved 10 basis points on strength at its North American select service hotels, while the average daily rate increased 1.8%, or 1.2% excluding the effects of currency, as rates rose significantly internationally.

In fact, the company's international hotels performed well, particularly in China and Brazil, with some volatility due to the earthquakes in Japan, and the social unrest in the Middle East and North Africa. Comparable international revPAR rose 11.0%, or 6.9% before currency effects.

Management and franchise fees earned rose roughly 23%, a result of new managed or franchised hotels opened, in addition to RevPAR growth at exisiting hotels.

Hyatt said it opened two properties in the first quarter, and expects to open several more in the future, executing management or franchise contracts for roughly 145 hotels by the end of the period. Approximately 70% of the projected new hotels will be located outside North America.

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