Hyatt Reports Second Quarter 2024 Results

Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE:H) today reported second quarter 2024 results. Highlights include:

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• Comparable system-wide hotels RevPAR increased 4.7% compared to the same period in 2023

• Comparable system-wide all-inclusive resorts Net Package RevPAR increased 3.0% compared to the same period in 2023

• Net Rooms Growth was approximately 4.6%

• Net Income was $359 million and Adjusted Net Income was $158 million

• Diluted EPS was $3.46 and Adjusted Diluted EPS was $1.53

• Adjusted EBITDA¹ was $307 million

• Pipeline of executed management or franchise contracts was approximately 130,000 rooms

• Repurchased approximately 907 thousand shares of Class A common stock for $134 million

• Full year comparable system-wide hotels RevPAR is projected to increase 3.0% to 4.0% on a constant currency basis compared to full year 2023

• Full year Net Income is projected between $1,055 million and $1,115 million

• Full year Adjusted EBITDA¹ is projected between $1,135 million and $1,175 million

• Full year Capital Returns to Shareholders is projected between $800 million and $850 million

Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt, said, "We posted solid second quarter results demonstrating our differentiated positioning and continued momentum. System-wide RevPAR grew by 4.7% and net rooms growth was 4.6%, generating record gross fee revenue of $275 million in the quarter. Our pipeline reached a new record of 130,000 rooms, up 9% year-over-year, reflecting strong developer interest in our brands. We saw continued growth of the World of Hyatt loyalty program, with membership increasing by 21% year-over-year to a record 48 million members. These achievements demonstrated the strength of our asset-light earnings model, which is designed to deliver strong free cash flow and enhance shareholder value."

Segment Results and Highlights

• Management and franchising: Second quarter results reflected strong performance in business transient and group travel. In the United States, RevPAR increased over 2% from strong group and business travel while leisure travel was negatively impacted by the timing of Easter, renovations at large resort properties, and continued impact from the 2023 Maui wildfires. Travel within Europe remains strong driven by inbound travel from the United States and large one-time events. Greater China was impacted by strong outbound travel from Greater China to other markets within Asia, including Japan and South Korea. In Asia Pacific excluding Greater China, RevPAR increased approximately 18% during the quarter.

• Owned and leased: Adjusted EBITDA in the second quarter increased 9% compared to the second quarter of 2023, when adjusted for the net impact of transactions. Comparable margins increased 110 bps compared to the second quarter of 2023, as revenue growth outpaced expenses.

• Distribution: Adjusted EBITDA in the second quarter increased $9 million compared to the second quarter of 2023. Excluding Unlimited Vacation Club, Adjusted EBITDA was below 2023 by approximately $5 million, consistent with the expectations communicated previously because of ALG Vacations lapping a strong second quarter last year.

Openings and Development

In the second quarter, 18 new hotels (or 3,251 rooms) joined Hyatt's portfolio. Notable openings included Park Hyatt Changsha, Maison Métier, The Legend Paracas Resort, the first Destination by Hyatt property in Peru, and Hyatt Vivid Grand Island, the first open Hyatt Vivid Hotels & Resorts property. Additionally, the first Caption by Hyatt properties outside the United States opened in the quarter: Caption by Hyatt Namba Osaka and Caption by Hyatt Zhongshan Park Shanghai. The first Hyatt Centric in Shanghai, China, Hyatt Centric Zhongshan Park Shanghai, also opened in the quarter.

As of June 30, 2024, the Company had a pipeline of executed management or franchise contracts for approximately 670 hotels (approximately 130,000 rooms).

Transactions and Capital Strategy

In addition to the previously announced sales of Park Hyatt Zurich on April 4, 2024, Hyatt Regency San Antonio Riverwalk on April 23, 2024, and Hyatt Regency Green Bay on May 1, 2024, the Company is sharing the following updates:

• Acquired the me and all hotels brand from Lindner Hotels AG on June 28, 2024. There are six me and all hotels with over 1,000 rooms currently open in Germany which joined Hyatt through the strategic collaboration with Lindner Hotels AG in 2022. The me and all hotels brand has a healthy pipeline with an additional 1,000 rooms in the executed pipeline and more development deals in various stages of negotiation.

• Expects to close on the sale of an asset that is under a purchase and sale agreement by the end of August 2024, which would complete the Company's $2.0 billion asset sell-down commitment.

As of June 30, 2024, the Company has realized $1.5 billion of gross proceeds from the net disposition of real estate at a 13.3x multiple and remains committed to realizing $2.0 billion of gross proceeds from the sale of real estate, net of acquisitions, by the end of 2024 as part of its expanded asset disposition commitment announced in August 2021.

Balance Sheet and Liquidity

As of June 30, 2024, the Company reported the following:

• Total debt of $3,885 million.

• Pro rata share of unconsolidated hospitality venture debt of $451 million, substantially all of which is non-recourse to Hyatt and a portion of which Hyatt guarantees pursuant to separate agreements.

• Total liquidity of approximately $3.5 billion with $1,957 million of cash and cash equivalents and short-term investments, and borrowing availability of $1,496 million under Hyatt's revolving credit facility, net of letters of credit outstanding.

During the second quarter, the Company repurchased a total of 906,875 shares of Class A common stock for approximately $134 million. As of June 30, 2024, the Company has approximately $1.6 billion remaining under the share repurchase authorization.

On June 3, 2024, the Company issued $450 million of 5.250% senior notes due 2029 at an issue price of 99.496% and $350 million of 5.500% senior notes due 2034 at an issue price of 98.860%. The Company received approximately $786 million of net proceeds, after deducting underwriting discounts and other offering expenses. The Company invested the net proceeds in marketable securities and intends to use the net proceeds to repay the outstanding balance on the $750 million of 1.800% senior notes maturing on October 1, 2024, at or prior to maturity.

The Company's board of directors has declared a cash dividend of $0.15 per share for the third quarter of 2024. The dividend is payable on September 10, 2024 to Class A and Class B stockholders of record as of August 27, 2024.

2024 Outlook

The Company is providing the following outlook for the 2024 fiscal year:

Refer to the table on page A-7 of the schedules for a summary of special items impacting Adjusted Net Income and Adjusted Diluted EPS for the three months ended June 30, 2024.

Note: All RevPAR and ADR percentage changes are in constant dollars. All Net Package RevPAR and Net Package ADR percentage changes are in reported dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page A-5.

Conference Call Information

The Company will hold an investor conference call this morning, August 6, 2024, at 9:00 a.m. CT.

Participants are encouraged to listen to a simultaneous webcast of the conference call, which may be accessed through the Company's website at investors.hyatt.com. Alternatively, participants may access the live call by dialing: 800.715.9871 (U.S. Toll-Free) or 646.307.1963 (International Toll Number) using conference ID# 2303828 approximately 15 minutes prior to the scheduled start time.

A replay of the call will be available for one week beginning on Tuesday, August 6, 2024, at 11:00 a.m. CT by dialing: 800.770.2030 (U.S. Toll-Free) or 609.800.9909 (International Toll Number) using conference ID# 2303828. An archive of the webcast will be available on the Company's website for 90 days.

Forward-Looking Statements

Forward-Looking Statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about our plans, strategies, outlook, occupancy, the amount by which the Company intends to reduce its real estate asset base, the expected amount of gross proceeds from the sale of such assets, and the anticipated timeframe for such asset dispositions, the number of properties we expect to open in the future, pace and booking trends, the expected timing and payment of dividends, RevPAR trends, our expected Adjusted G&A Expense, our expected capital expenditures, our expected net rooms growth, our expected system-wide RevPAR, our expected one-time integration-related expenses, financial performance, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and pace of economic recovery following economic downturns; global supply chain constraints and interruptions, rising costs of construction-related labor and materials, and increases in costs due to inflation or other factors that may not be fully offset by increases in revenues in our business; risks affecting the luxury, resort, and all-inclusive lodging segments; levels of spending in business, leisure, and group segments, as well as consumer confidence; declines in occupancy and average daily rate; limited visibility with respect to future bookings; loss of key personnel; domestic and international political and geopolitical conditions, including political or civil unrest or changes in trade policy; hostilities, or fear of hostilities, including future terrorist attacks, that affect travel; travel-related accidents; natural or man-made disasters, weather and climate-related events, such as earthquakes, tsunamis, tornadoes, hurricanes, droughts, floods, wildfires, oil spills, nuclear incidents, and global outbreaks of pandemics or contagious diseases, or fear of such outbreaks; our ability to successfully achieve certain levels of operating profits at hotels that have performance tests or guarantees in favor of our third-party owners; the impact of hotel renovations and redevelopments; risks associated with our capital allocation plans, share repurchase program, and dividend payments, including a reduction in, or elimination or suspension of, repurchase activity or dividend payments; the seasonal and cyclical nature of the real estate and hospitality businesses; changes in distribution arrangements, such as through internet travel intermediaries; changes in the tastes and preferences of our customers; relationships with colleagues and labor unions and changes in labor laws; the financial condition of, and our relationships with, third-party owners, franchisees, and hospitality venture partners; the possible inability of third-party owners, franchisees, or development partners to access the capital necessary to fund current operations or implement our plans for growth; risks associated with potential acquisitions and dispositions and our ability to successfully integrate completed acquisitions with existing operations; failure to successfully complete proposed transactions (including the failure to satisfy closing conditions or obtain required approvals); our ability to successfully execute our strategy to expand our management and hotels services and franchising business while at the same time reducing our real estate asset base within targeted timeframes and at expected values; our ability to maintain effective internal control over financial reporting and disclosure controls and procedures; declines in the value of our real estate assets; unforeseen terminations of our management and hotels services or franchise agreements; changes in federal, state, local, or foreign tax law; increases in interest rates, wages, and other operating costs; foreign exchange rate fluctuations or currency restructurings; risks associated with the introduction of new brand concepts, including lack of acceptance of new brands or innovation; general volatility of the capital markets and our ability to access such markets; changes in the competitive environment in our industry, industry consolidation, and the markets where we operate; our ability to successfully grow the World of Hyatt loyalty program and Unlimited Vacation Club paid membership program; cyber incidents and information technology failures; outcomes of legal or administrative proceedings; and violations of regulations or laws related to our franchising business and licensing businesses and our international operations; and other risks discussed in the Company's filings with the SEC, including our annual reports on Form 10-K and quarterly reports on Form 10-Q, which filings are available from the SEC. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Non-GAAP Financial Measures

The Company refers to certain financial measures that are not recognized under U.S. generally accepted accounting principles (GAAP) in this press release, including: Adjusted Net Income; Adjusted Diluted EPS; Adjusted EBITDA; Adjusted G&A Expenses; and Free Cash Flow. See the schedules to this earnings release, including the "Definitions" section, for additional information and reconciliations of such non-GAAP financial measures.

Availability of Information on Hyatt's Website and Social Media Channels

Investors and others should note that Hyatt routinely announces material information to investors and the marketplace using U.S. Securities and Exchange Commission (SEC) filings, press releases, public conference calls, webcasts and the Hyatt Investor Relations website. The Company uses these channels as well as social media channels (e.g., the Hyatt Facebook account (facebook.com/hyatt); the Hyatt Instagram account (instagram.com/hyatt/); the Hyatt X account (twitter.com/hyatt); the Hyatt LinkedIn account (linkedin.com/company/hyatt/); and the Hyatt YouTube account (youtube.com/user/hyatt)) as a means of disclosing information about the Company's business to our guests, customers, colleagues, investors, and the public. While not all of the information that the Company posts to the Hyatt Investor Relations website or on the Company's social media channels is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Hyatt to review the information that it shares at the Investor Relations link located at the bottom of the page on hyatt.com and on the Company's social media channels. Users may automatically receive email alerts and other information about the Company when enrolling an email address by visiting "Investor Email Alerts" in the "Resources" section of Hyatt's website at investors.hyatt.com. The contents of these websites are not incorporated by reference into this press release or any report or document Hyatt files with the SEC, and any references to the websites are intended to be inactive textual references only.

About Hyatt Hotels Corporation

Hyatt Hotels Corporation, headquartered in Chicago, is a leading global hospitality company guided by its purpose – to care for people so they can be their best. As of June 30, 2024, the Company's portfolio included more than 1,350 hotels and all-inclusive properties in 78 countries across six continents. The Company's offering includes brands in the Timeless Collection, including Park Hyatt®, Grand Hyatt®, Hyatt Regency®, Hyatt®, Hyatt Vacation Club®, Hyatt Place®, Hyatt House®, Hyatt Studios, and UrCove; the Boundless Collection, including Miraval®, Alila®, Andaz®, Thompson Hotels®, Dream® Hotels, Hyatt Centric®, and Caption by Hyatt®; the Independent Collection, including The Unbound Collection by Hyatt®, Destination by Hyatt®, and JdV by Hyatt®; and the Inclusive Collection, including Impression by Secrets, Hyatt Ziva®, Hyatt Zilara®, Zoëtry® Wellness & Spa Resorts, Secrets® Resorts & Spas, Breathless Resorts & Spas®, Dreams® Resorts & Spas, Hyatt Vivid Hotels & Resorts, Alua Hotels & Resorts®, and Sunscape® Resorts & Spas. Subsidiaries of the Company operate the World of Hyatt® loyalty program, ALG Vacations®, Mr & Mrs Smith™, Unlimited Vacation Club®, Amstar DMC destination management services, and Trisept Solutions® technology services. For more information, please visit www.hyatt.com.

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