Form 8-K Hyatt Hotels Corp For: May 10
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Exhibit 99.1
| Investor Contact: | Media Contact: | |||||||
Noah Hoppe, 312.780.5991 | Franziska Weber, 312.780.6106 | |||||||
noah.hoppe@hyatt.com | franziska.weber@hyatt.com | |||||||
HYATT REPORTS FIRST QUARTER 2022 RESULTS
System-wide RevPAR Surges in March, Strengthens Further in April
Over 40% of $2.0B Asset Disposition Commitment Closed or Under Contract
CHICAGO (May 10, 2022) - Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H) today reported first quarter 2022 financial results. Net loss attributable to Hyatt was $73 million, or $0.67 per diluted share, in the first quarter of 2022, compared to a net loss attributable to Hyatt of $304 million, or $2.99 per diluted share, in the first quarter of 2021. Adjusted net loss attributable to Hyatt was $36 million, or $0.33 per diluted share, in the first quarter of 2022, compared to Adjusted net loss attributable to Hyatt of $363 million, or $3.57 per diluted share, in the first quarter of 2021. Refer to the table on page 14 of the schedules for a summary of special items impacting Adjusted net loss and Adjusted losses per share for the three months ended March 31, 2022 and March 31, 2021.
“We are optimally positioned at this stage in the recovery as demonstrated by the momentum in our results this quarter,” said Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt Hotels Corporation. “Record levels of leisure demand fueled nearly 60% of our rooms revenue in the quarter with continued outperformance at our resorts and all-inclusive properties. We expect the rate of recovery to broaden and strengthen in the months ahead as evidenced by the strong pace of actualized and future bookings for business and group travel. Our outlook remains very optimistic for the remainder of the year with system-wide RevPAR in April accelerating further from March.”
First quarter 2022 financial results as compared to the first quarter 2021 are as follows:
•Net loss decreased to $73 million from a loss of $304 million.
•Adjusted EBITDA increased to $169 million from a loss of $20 million.
◦Apple Leisure Group ("ALG") contributed $56 million of Adjusted EBITDA.
◦Adjusted EBITDA does not include ALG's Net Deferrals of $24 million and Net Financed Contracts of $7 million.
•Comparable system-wide RevPAR increased 107% to $93.98 and comparable U.S. hotel RevPAR increased 126% to $104.45 in the first quarter of 2022.
•Comparable owned and leased hotels RevPAR increased 217% to $143.50 and comparable owned and leased hotels operating margin improved to 26.9% in the first quarter of 2022.
•All-inclusive Net Package RevPAR was $204.66 with an Average Daily Rate of $309.90.
•System-wide Net Rooms Growth was 18.6% in the first quarter of 2022. Excluding the acquisition of ALG, Net Rooms Growth was 5.2%.
Note: All RevPAR and ADR percentage changes are in constant 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 12.
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•Pipeline of executed management or franchise contracts increased 13% to approximately 113,000 rooms. Excluding the acquisition of ALG, the pipeline increased 5% to approximately 105,000 rooms.
Mr. Hoplamazian continued, "We have made significant progress towards our new $2.0 billion asset disposition commitment we announced last year. In April of this year, we closed on the sale of three owned hotels and expect to close on the sale of a fourth hotel in the second quarter. Combined, the disposition of these four hotels results in $812 million in expected gross disposition proceeds, or over 40% of our $2.0 billion disposition target, at an implied multiple of 15.7x 2019 EBITDA, marking significant progress towards our fee-based earnings transformation.”
OPERATIONAL UPDATE
Comparable system-wide RevPAR progressed meaningfully during the first four months of the year, January was 37% below 2019 and improved to 9% below 2019 in April. The Americas and EAME/SW Asia regions exceeded 2019 RevPAR in April by 3% and 1%, respectively. System-wide average daily rate exceeded 2019 by approximately 10% in April driven by luxury brands in the Americas, which exceeded 2019 by approximately 30%.
Forward booking trends also continue to strengthen. System-wide comparable gross transient revenue booked for future periods was approximately 1% below 2019 in April or approximately 6% above 2019 when excluding Greater China. Gross group room revenue booked for stay dates in 2022 for comparable Americas Full Service Managed properties was 42% above 2019 in April.
Net Package RevPAR for ALG resorts in the Americas, in comparison with the same properties managed by ALG in the first quarter of 2019, was 12% above 2019 in April. Gross package revenue booked for ALG resorts in the Americas for future periods was more than 33% above 2019 in April for the same set of properties.
FIRST QUARTER RESULTS
First quarter of 2022 financial results as compared to the first quarter of 2021 are as follows:
Management, Franchise, and Other Fees
Total management and franchise fee revenues increased to $135 million in the first quarter of 2022 compared to $49 million reported in the first quarter of 2021 and reflected a sequential improvement from $124 million reported in the fourth quarter of 2021. Base management fees increased to $60 million, incentive management fees increased to $40 million, and franchise fees increased to $35 million during the quarter compared to the first quarter of 2021. Other fee revenues increased to $19 million during the quarter compared to the first quarter of 2021.
Americas Management and Franchising Segment
Americas management and franchising segment Adjusted EBITDA increased to $85 million in the first quarter of 2022 compared to $28 million reported in the first quarter of 2021. Results were led by increases in base management and franchise fees, with franchise fees exceeding 2019 levels by 9% on a reported basis.
Americas net rooms increased 4.0% compared to the first quarter of 2021.
Note: All RevPAR and ADR percentage changes are in constant 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 12.
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Southeast Asia, Greater China, Australia, New Zealand, South Korea, Japan and Micronesia (ASPAC) Management and Franchising Segment
ASPAC management and franchising segment Adjusted EBITDA of $5 million in the first quarter of 2022 was flat compared to $5 million reported in the first quarter of 2021. Results reflect lower demand from Greater China while the remainder of the region experienced improving demand and an increase in management fees.
ASPAC net rooms increased 6.1% compared to the first quarter of 2021.
Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising Segment
EAME/SW Asia management and franchising segment Adjusted EBITDA increased to $6 million in the first quarter of 2022 compared to $0 million reported in the first quarter of 2021. Results across the region were led by increases in base and incentive management fees in the Middle East and Western Europe.
EAME/SW Asia net rooms increased 9.7% compared to the first quarter of 2021.
Apple Leisure Group Segment
ALG segment Adjusted EBITDA was $56 million in the first quarter of 2022. Adjusted EBITDA does not include ALG's Net Deferrals of $24 million and Net Financed Contracts of $7 million. Results reflect strong demand for leisure destinations in Mexico and the Caribbean, a strong level of booking activity, and favorable operating margins within the ALG Vacations business.
During the first quarter of 2022, ALG added 3 resorts (or 1,071 rooms).
Refer to the table on page 3 of the schedules for further details on revenue recognition, deferrals, and financed contracts relating to the Unlimited Vacation Club.
Owned and Leased Hotels Segment
Owned and leased hotels segment Adjusted EBITDA increased to $54 million in the first quarter of 2022 compared to $(29) million reported in the first quarter of 2021 driven by improved demand across the portfolio. Owned and leased hotels segment comparable operating margins improved to 26.9%, up 210bps from the fourth quarter 2021 as reported, reflecting strong operational execution and growth in average daily rates.
Refer to the tables starting on page 11 of the schedules for a detailed list of portfolio changes and the year-over-year net impact to total owned and leased hotels segment Adjusted EBITDA.
Corporate and Other
Corporate and other Adjusted EBITDA decreased to $(38) million in the first quarter of 2022 compared to $(24) million reported in the first quarter of 2021. The decrease to the first quarter of 2021 is driven by increases in certain selling, general, and administrative expenses, including $7 million of integration-related costs associated with the acquisition of ALG, and increases in payroll and related costs due to increased headcount.
Note: All RevPAR and ADR percentage changes are in constant 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 12.
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Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased 16.8% inclusive of rabbi trust impacts and stock-based compensation. Adjusted selling, general, and administrative expenses increased $54 million, primarily due to the addition of ALG Adjusted selling, general, and administrative expenses which were $33 million in the first quarter of 2022.
Refer to the table on page 15 of the schedules for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.
OPENINGS AND FUTURE EXPANSION
In the first quarter of 2022, 13 new hotels (or 2,690 rooms) joined Hyatt's system.
As of March 31, 2022, the Company had a pipeline of executed management or franchise contracts for approximately 540 hotels (approximately 113,000 rooms), inclusive of ALG's pipeline contribution of approximately 30 hotels (or approximately 8,000 rooms).
TRANSACTION / CAPITAL STRATEGY
The Company intends to successfully execute plans to sell approximately $2 billion of real estate by the end of 2024 as part of its expanded asset-disposition commitment announced in August 2021.
During the three months ended March 31, 2022, the Company made progress on its asset disposition commitment by signing purchase and sale agreements for the following owned hotels which subsequently closed in April: Hyatt Regency Indian Wells Resort & Spa, Grand Hyatt San Antonio River Walk, and The Driskill. The Company sold these three assets to unrelated third parties and entered into long-term management agreements for each property. The Company also signed a purchase and sale agreement in May for The Confidante Miami Beach, which is expected to close in the second quarter.
The aggregate proceeds for these four transactions is expected to be $812 million, representing over 40% of the Company's asset disposition commitment.
SHARE REPURCHASE / DIVIDEND
There were no Class A or Class B shares repurchases or quarterly dividend payments during the first quarter of 2022. The Company ended the first quarter with 51,273,148 Class A and 59,017,749 Class B shares issued and outstanding.
Note: All RevPAR and ADR percentage changes are in constant 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 12.
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2022 OUTLOOK
The Company is revising the following information for the 2022 fiscal year:
•Capital expenditures are expected to be approximately $210 million.
◦Hyatt capital expenditures, excluding ALG, are expected to be approximately $185 million reflecting a reduction from $190 million as a result of owned hotel dispositions.
◦ALG capital expenditures are expected to remain at approximately $25 million.
The Company is reaffirming the following information for the 2022 fiscal year:
•Adjusted selling, general, and administrative expenses are expected to be approximately $460 million to $465 million. This includes selling, general, and administrative expenses associated with the acquisition of ALG, of which $25 million to $30 million is related to one-time integration costs in 2022. Refer to the table on page 16 of the schedules for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.
◦Excluding ALG, Adjusted selling, general, and administrative expenses are expected to be approximately $300 million to $305 million, and include $25 million to $30 million related to one-time integration costs in 2022.
◦ALG Adjusted selling, general, and administrative expenses are expected to be approximately $160 million.
•The Company expects to grow net rooms by approximately 6.0%.
No disposition or acquisition activity beyond what has been completed as of the date of this release has been included in the 2022 Outlook. The Company's 2022 Outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that Hyatt will achieve these results.
BALANCE SHEET / LIQUIDITY
As of March 31, 2022, the Company reported the following:
•Total debt of $3,821 million.
•Pro rata share of unconsolidated hospitality venture debt of $593 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 $2.8 billion with $1,305 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.
Note: All RevPAR and ADR percentage changes are in constant 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 12.
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CONFERENCE CALL INFORMATION
The Company will hold an investor conference call this morning, May 10, 2022, at 8:00 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: 888-412-4131 (U.S. Toll-Free) or 646-960-0134 (International Toll Number) using conference ID# 9019679 approximately 15 minutes prior to the scheduled start time.
A replay of the call will be available for one week beginning on Tuesday, May 10, 2022 at 11:00 a.m. CT by dialing: 800-770-2030 (U.S. Toll-Free) or 647-362-9199 (International Toll Number) using conference ID# 9019679. 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 impact of the COVID-19 pandemic and pace of recovery, the amount by which the Company intends to reduce its real estate asset base and the anticipated timeframe for such asset dispositions, the number of properties we expect to open in the future, booking trends, RevPAR trends, our expected Adjusted SG&A expense, our expected capital expenditures, our expected net rooms growth, 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: risks associated with the acquisition of ALG, including the related incurrence of additional material indebtedness; our ability to realize the anticipated benefits of the acquisition of ALG as rapidly or to the extent anticipated, including successful integration of the ALG business; the duration and severity of the COVID-19 pandemic and the pace of recovery following the pandemic, any additional resurgence, or COVID-19 variants; the short and long-term effects of the COVID-19 pandemic, including on the demand for travel, transient and group business, and levels of consumer confidence; the impact of the COVID-19 pandemic, any additional resurgence, or COVID-19 variants, and the impact of actions that governments, businesses, and individuals take in response, on global and regional economies, travel limitations or bans, and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; the broad distribution and efficacy of COVID-19 vaccines and treatments, wide acceptance by the general population of such vaccines, and the availability, use, and effectiveness of COVID-19 testing, including at-home testing kits; the ability of third-party owners, franchisees, or hospitality venture partners to successfully navigate the impacts of the COVID-19 pandemic, any additional resurgence, or COVID-19 variants; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and the 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 geo-political 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 such as earthquakes, tsunamis, tornadoes, hurricanes, 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 property owners, franchisees, and hospitality venture partners; the possible inability of third-party owners, franchisees, or development partners to access capital necessary to fund current operations or implement our plans for growth; risks associated with potential acquisitions and dispositions and the introduction of new brand concepts; the timing of 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 on our strategy to expand our management and franchising business while at the same time reducing our real estate asset base within targeted timeframes and at expected values; declines in the value of our real estate assets; unforeseen terminations of our management 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; 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, including as a result of the COVID-19 pandemic, 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; violations of regulations or laws related to our franchising business; and other risks discussed in the Company's filings with the SEC, including our annual report on Form 10-K, 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
Note: All RevPAR and ADR percentage changes are in constant 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 12.
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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: net income (loss), adjusted for special items; diluted earnings (losses) per share, adjusted for special items; Adjusted EBITDA; Adjusted EBITDA margin; and Adjusted SG&A. 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 Twitter 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 "Sign up for Email Alerts" in the "Investor Resources" section of Hyatt's website at investors.hyatt.com.
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 March 31, 2022, the Company’s portfolio included more than 1,150 hotels and all-inclusive properties in 71 countries across six continents. The Company's offering includes the Park Hyatt®, Miraval®, Grand Hyatt®, Alila®, Andaz®, The Unbound Collection by Hyatt®, Destination by Hyatt™, Hyatt Regency®, Hyatt®, Hyatt Ziva™, Hyatt Zilara™, Thompson Hotels®, Hyatt Centric®, Caption by Hyatt, JdV by Hyatt™, Hyatt House®, Hyatt Place®, UrCove, and Hyatt Residence Club® brands, as well as resort and hotel brands under the AMR™ Collection, including Secrets® Resorts & Spas, Dreams® Resorts & Spas, Breathless Resorts & Spas®, Zoëtry® Wellness & Spa Resorts, Vivid Hotels & Resorts®, Alua Hotels & Resorts®, and Sunscape® Resorts & Spas. Subsidiaries of the Company operate the World of Hyatt® loyalty program, ALG Vacations®, Unlimited Vacation Club®, Amstar DMC destination management services, and Trisept Solutions® technology services. For more information, please visit www.hyatt.com.
Note: All RevPAR and ADR percentage changes are in constant 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 12.
Hyatt Hotels Corporation
Table of Contents
Financial Information (unaudited)
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Percentages on the following schedules may not recompute due to rounding. Not meaningful percentage changes are presented as "NM".
Hyatt Hotels Corporation
Condensed Consolidated Statements of Income (Loss)
(in millions, except per share amounts)
(unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| REVENUES: | ||||||||||||||
| Owned and leased hotels | $ | 271 | $ | 104 | ||||||||||
| Management, franchise, and other fees | 154 | 63 | ||||||||||||
| Contra revenue | (9) | (8) | ||||||||||||
| Net management, franchise, and other fees | 145 | 55 | ||||||||||||
| Distribution and destination management | 246 | — | ||||||||||||
| Other revenues | 77 | 19 | ||||||||||||
| Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties | 540 | 260 | ||||||||||||
| Total revenues | 1,279 | 438 | ||||||||||||
| DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES: | ||||||||||||||
| Owned and leased hotels | 210 | 124 | ||||||||||||
| Distribution and destination management | 194 | — | ||||||||||||
| Depreciation and amortization | 119 | 74 | ||||||||||||
| Other direct costs | 67 | 23 | ||||||||||||
| Selling, general, and administrative | 111 | 95 | ||||||||||||
| Costs incurred on behalf of managed and franchised properties | 556 | 277 | ||||||||||||
| Direct and selling, general, and administrative expenses | 1,257 | 593 | ||||||||||||
| Net gains (losses) and interest income from marketable securities held to fund rabbi trusts | (31) | 12 | ||||||||||||
| Equity earnings (losses) from unconsolidated hospitality ventures | (9) | 54 | ||||||||||||
| Interest expense | (40) | (41) | ||||||||||||
| Asset impairments | (3) | — | ||||||||||||
| Other income (loss), net | (10) | 12 | ||||||||||||
| LOSS BEFORE INCOME TAXES | (71) | (118) | ||||||||||||
| PROVISION FOR INCOME TAXES | (2) | (186) | ||||||||||||
| NET LOSS | (73) | (304) | ||||||||||||
| NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | — | — | ||||||||||||
| NET LOSS ATTRIBUTABLE TO HYATT HOTELS CORPORATION | $ | (73) | $ | (304) | ||||||||||
| LOSSES PER SHARE—Basic | ||||||||||||||
| Net loss | $ | (0.67) | $ | (2.99) | ||||||||||
| Net loss attributable to Hyatt Hotels Corporation | $ | (0.67) | $ | (2.99) | ||||||||||
| LOSSES PER SHARE—Diluted | ||||||||||||||
| Net loss | $ | (0.67) | $ | (2.99) | ||||||||||
| Net loss attributable to Hyatt Hotels Corporation | $ | (0.67) | $ | (2.99) | ||||||||||
| Basic share counts | 110.2 | 101.5 | ||||||||||||
| Diluted share counts | 110.2 | 101.5 | ||||||||||||
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Hyatt Hotels Corporation
Segment Financial Summary
(in millions)
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | Change ($) | Change (%) | Change in Constant $ | Change in Constant $ (%) | |||||||||||||||||||||||||||||||||
| Owned and leased hotels | $ | 277 | $ | 107 | $ | 170 | 159.7 | % | $ | 170 | 160.0 | % | ||||||||||||||||||||||||||
| Americas management and franchising | 133 | 55 | 78 | 137.2 | % | 78 | 137.3 | % | ||||||||||||||||||||||||||||||
| ASPAC management and franchising | 14 | 15 | (1) | (1.3) | % | (1) | (1.0) | % | ||||||||||||||||||||||||||||||
| EAME/SW Asia management and franchising | 15 | 7 | 8 | 124.9 | % | 8 | 132.9 | % | ||||||||||||||||||||||||||||||
| Apple Leisure Group | 310 | — | 310 | NM | 310 | NM | ||||||||||||||||||||||||||||||||
| Corporate and other | 14 | 8 | 6 | 68.4 | % | 6 | 68.4 | % | ||||||||||||||||||||||||||||||
| Eliminations (a) | (15) | (6) | (9) | (153.1) | % | (9) | (153.0) | % | ||||||||||||||||||||||||||||||
| Adjusted revenues | $ | 748 | $ | 186 | $ | 562 | 301.8 | % | $ | 562 | 302.7 | % | ||||||||||||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||||||||||||||||||||||||
| Owned and leased hotels | $ | 48 | $ | (25) | $ | 73 | 292.1 | % | $ | 73 | 294.0 | % | ||||||||||||||||||||||||||
| Pro rata share of unconsolidated hospitality ventures | 6 | (4) | 10 | 263.6 | % | 10 | 261.8 | % | ||||||||||||||||||||||||||||||
| Total owned and leased hotels | 54 | (29) | 83 | 288.4 | % | 83 | 289.7 | % | ||||||||||||||||||||||||||||||
| Americas management and franchising | 85 | 28 | 57 | 205.6 | % | 57 | 205.9 | % | ||||||||||||||||||||||||||||||
| ASPAC management and franchising | 5 | 5 | — | (4.2) | % | — | (3.5) | % | ||||||||||||||||||||||||||||||
| EAME/SW Asia management and franchising | 6 | — | 6 | NM | 6 | NM | ||||||||||||||||||||||||||||||||
| Apple Leisure Group | 56 | — | 56 | NM | 56 | NM | ||||||||||||||||||||||||||||||||
| Corporate and other | (38) | (24) | (14) | (54.1) | % | (14) | (54.2) | % | ||||||||||||||||||||||||||||||
| Eliminations | 1 | — | 1 | 208.1 | % | 1 | 208.1 | % | ||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 169 | $ | (20) | $ | 189 | 947.5 | % | $ | 189 | 949.8 | % | ||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| Net Deferral activity | 2022 | 2021 | Change $ | Change (%) | ||||||||||||||||||||||||||||
| Increase in deferred revenue | $ | 49 | $ | — | $ | 49 | NM | |||||||||||||||||||||||||
| Increase in deferred costs | (25) | — | (25) | NM | ||||||||||||||||||||||||||||
| Net Deferrals | $ | 24 | $ | — | $ | 24 | NM | |||||||||||||||||||||||||
| Increase in Net Financed Contracts | $ | 7 | $ | — | $ | 7 | NM | |||||||||||||||||||||||||
(a)These intersegment eliminations represent management fee revenues and expenses related to our owned and leased hotels and promotional award redemption revenues and expenses related to our co-branded credit card program at our owned and leased hotels.
Page 2
Hyatt Hotels Corporation
Reconciliation of Unlimited Vacation Club Net Deferrals
(in millions)
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2022 | 2021 | Change $ | Change (%) | ||||||||||||||||||||||||||
| Sales of membership club contracts deferrals | $ | 88 | $ | — | $ | 88 | NM | ||||||||||||||||||||||
| Membership club revenue recognized | (39) | — | (39) | NM | |||||||||||||||||||||||||
| Increase in deferred revenue from membership club contract sales | 49 | — | 49 | NM | |||||||||||||||||||||||||
| Costs of memberships club contracts deferrals | (27) | — | (27) | NM | |||||||||||||||||||||||||
| Membership club costs recognized | 2 | — | 2 | NM | |||||||||||||||||||||||||
| Increase in deferred costs from membership club contract costs | (25) | — | (25) | NM | |||||||||||||||||||||||||
| Net Deferrals | $ | 24 | $ | — | $ | 24 | NM | ||||||||||||||||||||||
| Increase in Net Financed Contracts | $ | 7 | $ | — | $ | 7 | NM | ||||||||||||||||||||||
Page 3
Hyatt Hotels Corporation
Hotel Chain Statistics
Comparable Hotels
In Constant $
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| RevPAR | Occupancy | ADR | ||||||||||||||||||||||||
| 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||||||||||||||
| Owned and leased hotels (# of hotels) (a) | ||||||||||||||||||||||||||
| Owned and leased hotels (31) | $ | 143.50 | 217.4 | % | 55.0 | % | 27.8% pts | $ | 260.87 | 56.8 | % | |||||||||||||||
| Managed and franchised hotels (# of hotels) (b) | ||||||||||||||||||||||||||
| System-wide hotels (933) | $ | 93.98 | 107.2 | % | 51.1 | % | 15.9% pts | $ | 183.85 | 42.6 | % | |||||||||||||||
| Americas | ||||||||||||||||||||||||||
| Full service hotels (221) | $ | 123.46 | 181.7 | % | 51.5 | % | 25.3% pts | $ | 239.67 | 43.3 | % | |||||||||||||||
| Select service hotels (436) | $ | 83.02 | 74.3 | % | 61.4 | % | 13.7% pts | $ | 135.19 | 35.4 | % | |||||||||||||||
| ASPAC | ||||||||||||||||||||||||||
| Full service hotels (121) | $ | 63.55 | 16.7 | % | 37.4 | % | 1.3% pts | $ | 169.71 | 12.4 | % | |||||||||||||||
| Select service hotels (33) | $ | 32.16 | (6.0) | % | 44.8 | % | (6.4)% pts | $ | 71.79 | 7.4 | % | |||||||||||||||
| EAME/SW Asia | ||||||||||||||||||||||||||
| Full service hotels (102) | $ | 89.09 | 152.3 | % | 48.4 | % | 18.7% pts | $ | 184.01 | 55.0 | % | |||||||||||||||
| Select service hotels (20) | $ | 51.84 | 91.9 | % | 56.0 | % | 12.6% pts | $ | 92.65 | 48.8 | % | |||||||||||||||
(a) Owned and leased hotels figures do not include unconsolidated hospitality ventures.
(b) Managed and franchised hotels figures include owned and leased hotels.
Page 4
Hyatt Hotels Corporation
Hotel Brand Statistics
Comparable System-wide Managed and Franchised Hotels (a)
In Constant $
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| RevPAR | Occupancy | ADR | |||||||||||||||||||||||||||
| 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | ||||||||||||||||||||||||
| Brand (# of hotels) | |||||||||||||||||||||||||||||
| Park Hyatt (40) | $ | 178.89 | 71.1 | % | 44.5 | % | 8.8% pts | $ | 402.01 | 37.2 | % | ||||||||||||||||||
| Grand Hyatt (58) | $ | 111.28 | 121.0 | % | 47.7 | % | 15.3% pts | $ | 233.06 | 49.7 | % | ||||||||||||||||||
| Andaz (23) | $ | 170.37 | 107.4 | % | 49.5 | % | 14.6% pts | $ | 344.10 | 46.0 | % | ||||||||||||||||||
| The Unbound Collection by Hyatt (21) | $ | 134.79 | 154.6 | % | 45.7 | % | 18.9% pts | $ | 294.65 | 49.4 | % | ||||||||||||||||||
Composite Luxury1 | $ | 132.32 | 109.9 | % | 47.4 | % | 15.1% pts | $ | 279.08 | 42.9 | % | ||||||||||||||||||
| Hyatt Regency (207) | $ | 84.35 | 139.9 | % | 46.5 | % | 19.1% pts | $ | 181.21 | 41.3 | % | ||||||||||||||||||
| Hyatt Centric (37) | $ | 101.88 | 112.1 | % | 51.7 | % | 17.7% pts | $ | 197.17 | 39.8 | % | ||||||||||||||||||
Composite Upper-Upscale2 | $ | 85.42 | 137.6 | % | 47.1 | % | 19.1% pts | $ | 181.39 | 41.1 | % | ||||||||||||||||||
| Hyatt Place (375) | $ | 74.27 | 68.8 | % | 58.7 | % | 11.5% pts | $ | 126.58 | 35.8 | % | ||||||||||||||||||
| Hyatt House (109) | $ | 90.04 | 75.7 | % | 63.9 | % | 14.8% pts | $ | 140.88 | 34.8 | % | ||||||||||||||||||
Composite Upscale3 | $ | 77.90 | 70.6 | % | 59.9 | % | 12.3% pts | $ | 130.10 | 35.7 | % | ||||||||||||||||||
(a) Managed and franchised hotels figures include owned and leased hotels.
1 Includes Park Hyatt, Miraval, Grand Hyatt, Alila, Andaz, The Unbound Collection by Hyatt, Destination by Hyatt, and Thompson Hotels.
2 Includes Hyatt Regency, Hyatt, Hyatt Centric, and JdV by Hyatt.
3 Includes Hyatt Place and Hyatt House.
Page 5
Hyatt Hotels Corporation
All-inclusive Brand Statistics
All Properties (Comparable and Non-Comparable) Managed and Franchised Hotels (a)
In Constant $
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| Net Package RevPAR | Occupancy | ADR | |||||||||||||||||||||||||||
| Brand (# of hotels) | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||||||||||||||||
| AMR Collection Americas (59) | $ | 214.32 | NM | 69.2 | % | NM | $ | 309.75 | NM | ||||||||||||||||||||
| AMR Collection Europe (43) (b) | $ | 71.03 | NM | 55.2 | % | NM | $ | 128.62 | NM | ||||||||||||||||||||
Composite all-inclusive1 (b) | $ | 204.66 | NM | 66.0 | % | NM | $ | 309.90 | NM | ||||||||||||||||||||
(a) Managed and franchised hotels figures include owned and leased hotels.
(b) Certain resorts in Europe operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
1 Includes AMR Collection, Hyatt Ziva and Hyatt Zilara
Page 6
Hyatt Hotels Corporation
Fee Summary
(in millions)
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2022 | 2021 | Change ($) | Change (%) | |||||||||||||||||||||||
| Base management fees | $ | 60 | $ | 24 | $ | 36 | 150.0 | % | ||||||||||||||||||
| Incentive management fees | 40 | 8 | 32 | 420.5 | % | |||||||||||||||||||||
| Franchise fees | 35 | 17 | 18 | 106.0 | % | |||||||||||||||||||||
| Management and franchise fees | 135 | 49 | 86 | 177.0 | % | |||||||||||||||||||||
| Other fee revenues | 19 | 14 | 5 | 35.2 | % | |||||||||||||||||||||
| Management, franchise, and other fees | $ | 154 | $ | 63 | $ | 91 | 145.8 | % | ||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2022 | 2021 | Change ($) | Change (%) | |||||||||||||||||||||||
| Management, franchise, and other fees | $ | 154 | $ | 63 | $ | 91 | 145.8 | % | ||||||||||||||||||
| Contra revenue from management agreements | (5) | (5) | — | 5.2 | % | |||||||||||||||||||||
| Contra revenue from franchise agreements | (4) | (3) | (1) | (33.1) | % | |||||||||||||||||||||
| Net management, franchise, and other fees | $ | 145 | $ | 55 | $ | 90 | 166.4 | % | ||||||||||||||||||
Page 7
Hyatt Hotels Corporation
Properties and Rooms by Geography
Owned and leased hotels
| March 31, 2022 | March 31, 2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | ||||||||||||||||||||||||||||||||||||||||||
| Full service hotels | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | 22 | 11,058 | 25 | 12,607 | (3) | (1,549) | |||||||||||||||||||||||||||||||||||||||||
| Other Americas | 3 | 1,262 | 3 | 1,262 | — | — | |||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia | 5 | 1,135 | 7 | 1,435 | (2) | (300) | |||||||||||||||||||||||||||||||||||||||||
| Select service hotels | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | 1 | 171 | 1 | 171 | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other Americas | 2 | 293 | 2 | 293 | — | — | |||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia | 1 | 330 | 1 | 330 | — | — | |||||||||||||||||||||||||||||||||||||||||
| Total full service and select service hotels | 34 | 14,249 | 39 | 16,098 | (5) | (1,849) | |||||||||||||||||||||||||||||||||||||||||
| All-inclusive hotels (a) | 4 | 911 | — | — | 4 | 911 | |||||||||||||||||||||||||||||||||||||||||
| Total owned and leased hotels (b) | 38 | 15,160 | 39 | 16,098 | (1) | (938) | |||||||||||||||||||||||||||||||||||||||||
(a) Certain resorts in Europe operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
(b) Figures do not include unconsolidated hospitality ventures.
Page 8
Hyatt Hotels Corporation
Properties and Rooms by Geography
Managed and franchised properties (includes owned and leased properties)
| March 31, 2022 | March 31, 2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | ||||||||||||||||||||||||||||||||||||||||||
| Americas | |||||||||||||||||||||||||||||||||||||||||||||||
| Full service hotels | |||||||||||||||||||||||||||||||||||||||||||||||
| United States managed | 149 | 64,259 | 142 | 63,372 | 7 | 887 | |||||||||||||||||||||||||||||||||||||||||
| Other Americas managed | 25 | 8,957 | 25 | 8,918 | — | 39 | |||||||||||||||||||||||||||||||||||||||||
| United States franchised | 78 | 23,270 | 69 | 20,753 | 9 | 2,517 | |||||||||||||||||||||||||||||||||||||||||
| Other Americas franchised | 8 | 1,307 | 5 | 924 | 3 | 383 | |||||||||||||||||||||||||||||||||||||||||
| Subtotal | 260 | 97,793 | 241 | 93,967 | 19 | 3,826 | |||||||||||||||||||||||||||||||||||||||||
| Select service hotels | |||||||||||||||||||||||||||||||||||||||||||||||
| United States managed | 33 | 4,931 | 43 | 6,400 | (10) | (1,469) | |||||||||||||||||||||||||||||||||||||||||
| Other Americas managed | 13 | 1,857 | 13 | 1,857 | — | — | |||||||||||||||||||||||||||||||||||||||||
| United States franchised | 412 | 57,482 | 391 | 54,023 | 21 | 3,459 | |||||||||||||||||||||||||||||||||||||||||
| Other Americas franchised | 13 | 1,761 | 12 | 1,621 | 1 | 140 | |||||||||||||||||||||||||||||||||||||||||
| Subtotal | 471 | 66,031 | 459 | 63,901 | 12 | 2,130 | |||||||||||||||||||||||||||||||||||||||||
| ASPAC | |||||||||||||||||||||||||||||||||||||||||||||||
| Full service hotels | |||||||||||||||||||||||||||||||||||||||||||||||
| ASPAC managed | 125 | 41,603 | 118 | 40,096 | 7 | 1,507 | |||||||||||||||||||||||||||||||||||||||||
| ASPAC franchised | 10 | 3,135 | 9 | 2,803 | 1 | 332 | |||||||||||||||||||||||||||||||||||||||||
| Subtotal | 135 | 44,738 | 127 | 42,899 | 8 | 1,839 | |||||||||||||||||||||||||||||||||||||||||
| Select service hotels | |||||||||||||||||||||||||||||||||||||||||||||||
| ASPAC managed | 30 | 5,223 | 28 | 5,135 | 2 | 88 | |||||||||||||||||||||||||||||||||||||||||
| ASPAC franchised | 13 | 2,244 | 6 | 1,169 | 7 | 1,075 | |||||||||||||||||||||||||||||||||||||||||
| Subtotal | 43 | 7,467 | 34 | 6,304 | 9 | 1,163 | |||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia | |||||||||||||||||||||||||||||||||||||||||||||||
| Full service hotels | |||||||||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia managed | 102 | 25,493 | 98 | 24,944 | 4 | 549 | |||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia franchised | 22 | 3,799 | 13 | 2,450 | 9 | 1,349 | |||||||||||||||||||||||||||||||||||||||||
| Subtotal | 124 | 29,292 | 111 | 27,394 | 13 | 1,898 | |||||||||||||||||||||||||||||||||||||||||
| Select service hotels | |||||||||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia managed | 23 | 3,851 | 16 | 2,651 | 7 | 1,200 | |||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia franchised | 5 | 1,070 | 5 | 1,131 | — | (61) | |||||||||||||||||||||||||||||||||||||||||
| Subtotal | 28 | 4,921 | 21 | 3,782 | 7 | 1,139 | |||||||||||||||||||||||||||||||||||||||||
| Total full service and select service hotels | 1,061 | 250,242 | 993 | 238,247 | 68 | 11,995 | |||||||||||||||||||||||||||||||||||||||||
| Americas | |||||||||||||||||||||||||||||||||||||||||||||||
| All-inclusive | |||||||||||||||||||||||||||||||||||||||||||||||
| Other Americas | 68 | 24,639 | 8 | 3,153 | 60 | 21,486 | |||||||||||||||||||||||||||||||||||||||||
| Subtotal | 68 | 24,639 | 8 | 3,153 | 60 | 21,486 | |||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia (a) | |||||||||||||||||||||||||||||||||||||||||||||||
| All-inclusive | |||||||||||||||||||||||||||||||||||||||||||||||
| EAME/SW Asia | 43 | 11,513 | — | — | 43 | 11,513 | |||||||||||||||||||||||||||||||||||||||||
| Subtotal | 43 | 11,513 | — | — | 43 | 11,513 | |||||||||||||||||||||||||||||||||||||||||
| Total all-inclusive hotels | 111 | 36,152 | 8 | 3,153 | 103 | 32,999 | |||||||||||||||||||||||||||||||||||||||||
| Total managed and franchised (b) | 1,172 | 286,394 | 1,001 | 241,400 | 171 | 44,994 | |||||||||||||||||||||||||||||||||||||||||
| Vacation ownership | 15 | 16 | (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Residential | 36 | 38 | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Condominium ownership | 39 | 36 | 3 | ||||||||||||||||||||||||||||||||||||||||||||
(a) Certain resorts in Europe operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
(b) Figures do not include vacation ownership, residential, or condominium ownership units.
Page 9
Hyatt Hotels Corporation
Properties and Rooms by Brand
| March 31, 2022 | March 31, 2021 | Change | |||||||||||||||||||||||||||||||||
| Brand | Properties | Rooms | Properties | Rooms | Properties | Rooms | |||||||||||||||||||||||||||||
| Park Hyatt | 45 | 8,414 | 44 | 8,194 | 1 | 220 | |||||||||||||||||||||||||||||
| Miraval | 3 | 357 | 3 | 362 | — | (5) | |||||||||||||||||||||||||||||
| Grand Hyatt | 58 | 31,190 | 59 | 32,493 | (1) | (1,303) | |||||||||||||||||||||||||||||
| Alila | 15 | 1,681 | 14 | 1,571 | 1 | 110 | |||||||||||||||||||||||||||||
| Andaz | 25 | 5,623 | 24 | 5,531 | 1 | 92 | |||||||||||||||||||||||||||||
| The Unbound Collection by Hyatt | 29 | 5,785 | 25 | 5,099 | 4 | 686 | |||||||||||||||||||||||||||||
| Thompson Hotels | 17 | 3,592 | 12 | 2,705 | 5 | 887 | |||||||||||||||||||||||||||||
| Destination by Hyatt | 17 | 3,614 | 15 | 3,446 | 2 | 168 | |||||||||||||||||||||||||||||
| Hyatt Regency (a) | 226 | 94,062 | 217 | 91,735 | 9 | 2,327 | |||||||||||||||||||||||||||||
| Hyatt | 13 | 3,354 | 12 | 2,056 | 1 | 1,298 | |||||||||||||||||||||||||||||
| Hyatt Centric (a) | 48 | 10,171 | 38 | 7,931 | 10 | 2,240 | |||||||||||||||||||||||||||||
| JdV by Hyatt | 22 | 3,180 | 15 | 2,337 | 7 | 843 | |||||||||||||||||||||||||||||
| Hyatt Place | 403 | 58,193 | 391 | 55,858 | 12 | 2,335 | |||||||||||||||||||||||||||||
| Hyatt House | 127 | 18,136 | 118 | 17,114 | 9 | 1,022 | |||||||||||||||||||||||||||||
| UrCove | 12 | 2,090 | 5 | 1,015 | 7 | 1,075 | |||||||||||||||||||||||||||||
| Other | 1 | 800 | 1 | 800 | — | — | |||||||||||||||||||||||||||||
| Total full service and select service hotels (b) | 1,061 | 250,242 | 993 | 238,247 | 68 | 11,995 | |||||||||||||||||||||||||||||
| AMR Collection (c) (d) | 102 | 32,561 | — | — | 102 | 32,561 | |||||||||||||||||||||||||||||
| Hyatt Ziva | 6 | 2,672 | 5 | 2,234 | 1 | 438 | |||||||||||||||||||||||||||||
| Hyatt Zilara | 3 | 919 | 3 | 919 | — | — | |||||||||||||||||||||||||||||
| Total all-inclusive hotels | 111 | 36,152 | 8 | 3,153 | 103 | 32,999 | |||||||||||||||||||||||||||||
| Total managed and franchised properties and rooms (b) | 1,172 | 286,394 | 1,001 | 241,400 | 171 | 44,994 | |||||||||||||||||||||||||||||
| Hyatt Residence Club | 15 | 16 | (1) | ||||||||||||||||||||||||||||||||
(a) Hyatt Regency includes one property and Hyatt Centric includes one property that we will rebrand under the respective brand in 2022.
(b) Figures do not include vacation ownership, residential, or condominium ownership units.
(c) AMR Collection includes five non-branded properties managed by ALG.
(d) Certain resorts in Europe operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
Page 10
Hyatt Hotels Corporation
Year-over-Year Net Impact of Portfolio Changes to Owned and Leased Hotels Segment Adjusted EBITDA
(in millions)
| Rooms | Transaction / Opening Date | Three Months Ended March 31, 2022 Adjusted EBITDA Impact | ||||||||||||||||||
| Dispositions | ||||||||||||||||||||
| Owned and Leased Hotels | ||||||||||||||||||||
| Hyatt Regency Lost Pines Resort and Spa | 490 | 2Q21 | ||||||||||||||||||
| Hyatt Regency Lake Tahoe Resort, Spa and Casino | 422 | 3Q21 | ||||||||||||||||||
| Hyatt Regency Miami | 615 | 4Q21 | ||||||||||||||||||
| Hyatt Regency Bishkek | 178 | 4Q21 | ||||||||||||||||||
| Total Owned and Leased Hotels Dispositions (a) | $ | (1) | ||||||||||||||||||
| Unconsolidated Hospitality Venture Hotels | ||||||||||||||||||||
| Grand Hyatt São Paulo | 467 | 1Q21 | ||||||||||||||||||
| Hyatt Place Celaya | 145 | 2Q21 | ||||||||||||||||||
| Hyatt Place Los Cabos | 157 | 2Q21 | ||||||||||||||||||
| Hyatt Place Tijuana | 145 | 2Q21 | ||||||||||||||||||
| Hyatt Centric Beale Street Memphis | 227 | 2Q21 | ||||||||||||||||||
| Hyatt Place Glendale / Los Angeles | 179 | 4Q21 | ||||||||||||||||||
| Hyatt Place San Jose Airport | 190 | 4Q21 | ||||||||||||||||||
| Hyatt House San Jose Airport | 165 | 4Q21 | ||||||||||||||||||
| Hyatt Centric Downtown Portland | 220 | 4Q21 | ||||||||||||||||||
| Hyatt House Nashville at Vanderbilt | 201 | 4Q21 | ||||||||||||||||||
| Total Unconsolidated Hospitality Venture Hotels Dispositions (b) (c) (d) | $ | 1 | ||||||||||||||||||
| Year-over-Year Net Impact of Dispositions to Owned and Leased Hotels Segment Adjusted EBITDA | $ | — | ||||||||||||||||||
| Acquisitions or Openings | ||||||||||||||||||||
| Owned and Leased Hotels | ||||||||||||||||||||
| Grand Hyatt São Paulo | 467 | 1Q21 | ||||||||||||||||||
| Total Owned and Leased Hotels Acquisitions or Openings | $ | 1 | ||||||||||||||||||
| Unconsolidated Hospitality Venture Hotels | ||||||||||||||||||||
| Hyatt Centric Downtown Nashville | 252 | 3Q21 | ||||||||||||||||||
| Hyatt Centric Buckhead Atlanta | 218 | 4Q21 | ||||||||||||||||||
| Hyatt Regency Miami | 615 | 4Q21 | ||||||||||||||||||
| Total Unconsolidated Hospitality Venture Hotels Acquisitions or Openings (b) (d) (e) | $ | 2 | ||||||||||||||||||
| Year-over-Year Net Impact of Acquisitions and Openings to Owned and Leased Hotels Segment Adjusted EBITDA | $ | 3 | ||||||||||||||||||
| Year-over-Year Net Impact of Portfolio Changes to Owned and Leased Hotels Segment Adjusted EBITDA | $ | 3 | ||||||||||||||||||
(a) Includes the year-over-year impact of one property that converted from leased to managed during the three months ended December 31, 2021.
(b) Reflects Hyatt's pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA.
(c) Includes the sale of the hotel by the venture, the Company's sale of our equity interest in the venture, or the Company's equity interest no longer qualifying for the equity method of accounting.
(d) Includes the year-over-year financial impact of pre-opening activity.
(e) Includes the opening of a hotel by the venture.
Page 11
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Measure: Reconciliation of Net Loss Attributable to Hyatt Hotels Corporation to EBITDA and EBITDA to Adjusted EBITDA
(in millions)
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2022 | 2021 | Change ($) | Change (%) | ||||||||||||||||||||||||||
| Net loss attributable to Hyatt Hotels Corporation | $ | (73) | $ | (304) | $ | 231 | 75.9 | % | |||||||||||||||||||||
| Interest expense | 40 | 41 | (1) | (3.6) | % | ||||||||||||||||||||||||
| Provision for income taxes | 2 | 186 | (184) | (98.6) | % | ||||||||||||||||||||||||
| Depreciation and amortization | 119 | 74 | 45 | 61.9 | % | ||||||||||||||||||||||||
| EBITDA | 88 | (3) | 91 | NM | |||||||||||||||||||||||||
| Contra revenue | 9 | 8 | 1 | 7.1 | % | ||||||||||||||||||||||||
| Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties | (540) | (260) | (280) | (107.7) | % | ||||||||||||||||||||||||
| Costs incurred on behalf of managed and franchised properties | 556 | 277 | 279 | 100.9 | % | ||||||||||||||||||||||||
| Equity (earnings) losses from unconsolidated hospitality ventures | 9 | (54) | 63 | 117.6 | % | ||||||||||||||||||||||||
| Stock-based compensation expense | 28 | 28 | — | (3.2) | % | ||||||||||||||||||||||||
| Asset impairments | 3 | — | 3 | NM | |||||||||||||||||||||||||
| Other (income) loss, net | 10 | (12) | 22 | 179.9 | % | ||||||||||||||||||||||||
| Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA | 6 | (4) | 10 | 263.6 | % | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 169 | $ | (20) | $ | 189 | 947.5 | % | |||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| Net Deferral activity | 2022 | 2021 | Change $ | Change (%) | |||||||||||||||||||||||||
| Increase in deferred revenue | $ | 49 | $ | — | $ | 49 | NM | ||||||||||||||||||||||
| Increase in deferred costs | (25) | — | (25) | NM | |||||||||||||||||||||||||
| Net Deferrals | $ | 24 | $ | — | $ | 24 | NM | ||||||||||||||||||||||
| Increase in Net Financed Contracts | $ | 7 | $ | — | $ | 7 | NM | ||||||||||||||||||||||
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Hyatt Hotels Corporation
Reconciliation of Non-GAAP Measure: Reconciliation of Total Revenues to Adjusted Revenues
(in millions)
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2022 | 2021 | Change ($) | Change (%) | ||||||||||||||||||||||||||
| Total revenues | $ | 1,279 | $ | 438 | $ | 841 | 191.9 | % | |||||||||||||||||||||
| Add: Contra revenue | 9 | 8 | 1 | 7.1 | % | ||||||||||||||||||||||||
| Less: Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties | (540) | (260) | (280) | (107.7) | % | ||||||||||||||||||||||||
| Adjusted revenues | $ | 748 | $ | 186 | $ | 562 | 301.8 | % | |||||||||||||||||||||
| Adjusted EBITDA Margin % | 22.6 | % | (10.7) | % | 33.3 | % | |||||||||||||||||||||||
| Adjusted EBITDA Margin % Change in Constant Currency | 33.3 | % | |||||||||||||||||||||||||||
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Hyatt Hotels Corporation
Reconciliation of Non-GAAP Measure: Losses per Diluted Share and Net Loss Attributable to Hyatt Hotels Corporation, to Losses per Diluted Share, Adjusted for Special Items and Adjusted Net Loss Attributable to Hyatt Hotels Corporation - Three Months Ended March 31, 2022 and March 31, 2021
(in millions, except per share amounts)
| Location on Condensed Consolidated Statements of Income (Loss) | Three Months Ended March 31, | |||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||
| Net loss attributable to Hyatt Hotels Corporation | $ | (73) | $ | (304) | ||||||||||||||||
| Losses per diluted share | $ | (0.67) | $ | (2.99) | ||||||||||||||||
| Special items | ||||||||||||||||||||
| Fund deficits (a) | Revenues for the reimbursement of costs incurred and costs incurred on behalf of managed and franchised properties; other income (loss), net | 13 | 14 | |||||||||||||||||
| Unrealized (gains) losses (b) | Other income (loss), net | 10 | (8) | |||||||||||||||||
| Asset impairments | Asset impairments | 3 | — | |||||||||||||||||
| Utilization of Avendra proceeds (c) | Costs incurred on behalf of managed and franchised properties; depreciation and amortization | 3 | 4 | |||||||||||||||||
| Unconsolidated hospitality ventures (d) | Equity earnings (losses) from unconsolidated hospitality ventures | — | (69) | |||||||||||||||||
| Other | Other income (loss), net | 6 | — | |||||||||||||||||
| Special items - pre-tax | 35 | (59) | ||||||||||||||||||
| Income tax benefit (provision) for special items | Provision for income taxes | 2 | — | |||||||||||||||||
| Total special items - after-tax | $ | 37 | $ | (59) | ||||||||||||||||
| Special items impact per diluted share | $ | 0.34 | $ | (0.58) | ||||||||||||||||
| Adjusted net loss attributable to Hyatt Hotels Corporation | $ | (36) | $ | (363) | ||||||||||||||||
| Losses per diluted share, adjusted for special items | $ | (0.33) | $ | (3.57) | ||||||||||||||||
(a) Fund deficits - During the three months ended March 31, 2022 (Q1 2022) and the three months ended March 31, 2021 (Q1 2021), we recognized deficits on certain funds due to the timing of revenue and expense recognition. We intend to recover these deficits in future periods.
(b) Unrealized (gains) losses - During Q1 2022 and Q1 2021, we recognized unrealized losses and gains, respectively, due to the change in fair value of our marketable securities.
(c) Utilization of Avendra proceeds - During Q1 2022 and Q1 2021, we recognized expenses related to the partial utilization of the Avendra LLC sale proceeds for the benefit of our hotels. The gain recognized in conjunction with the sale of Avendra LLC was included as a special item during the year ended December 31, 2017.
(d) Unconsolidated hospitality ventures - During Q1 2021, we recognized a $69 million pre-tax gain on the purchase of the remaining 50% interest in the entities that own Grand Hyatt São Paulo.
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Hyatt Hotels Corporation
Reconciliation of Non-GAAP Measure: SG&A Expenses to Adjusted SG&A Expenses
Results of operations as presented on the condensed consolidated statements of income (loss) include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in SG&A expenses and are completely offset by the corresponding net gains (losses) and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings (losses). SG&A expenses also include expenses related to stock-based compensation. Below is a reconciliation of this measure excluding the impact of our rabbi trust investments and stock-based compensation expense.
(in millions)
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2022 | 2021 | Change ($) | Change (%) | |||||||||||||||||||||||
| SG&A expenses | $ | 111 | $ | 95 | $ | 16 | 16.8 | % | ||||||||||||||||||
| Less: rabbi trust impact | 28 | (10) | 38 | 373.8 | % | |||||||||||||||||||||
| Less: stock-based compensation expense | (28) | (28) | — | 3.2 | % | |||||||||||||||||||||
| Adjusted SG&A expenses | $ | 111 | $ | 57 | $ | 54 | 96.3 | % | ||||||||||||||||||
The table below provides a segment breakdown for Adjusted SG&A expenses.
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2022 | 2021 | Change ($) | Change (%) | |||||||||||||||||||||||
| Americas management and franchising | $ | 15 | $ | 11 | $ | 4 | 36.5 | % | ||||||||||||||||||
| ASPAC management and franchising | 10 | 10 | — | 0.1 | % | |||||||||||||||||||||
| EAME/SW Asia management and franchising | 9 | 7 | 2 | 40.7 | % | |||||||||||||||||||||
| Owned and leased hotels | 2 | 2 | — | (7.6) | % | |||||||||||||||||||||
| Apple Leisure Group | 33 | — | 33 | NM | ||||||||||||||||||||||
| Corporate and other | 42 | 27 | 15 | 55.0 | % | |||||||||||||||||||||
| Adjusted SG&A expenses | $ | 111 | $ | 57 | $ | 54 | 96.3 | % | ||||||||||||||||||
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Hyatt Hotels Corporation
Reconciliation of Non-GAAP Financial Measure: Guidance: SG&A Expenses to Adjusted SG&A Expenses
For the Year Ended December 31, 2022
No additional disposition or acquisition activity beyond what has been completed as of the date of this release has been included in the forecast. The Company's outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that the Company will achieve these results. Results of operations as presented on the condensed consolidated statements of income (loss) include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in SG&A expenses and are completely offset by the corresponding net gains (losses) and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings (losses). SG&A expenses also include expenses related to stock-based compensation. Below is a reconciliation of this forecasted measure excluding the impact of our rabbi trust investments and forecasted stock-based compensation expense.
(in millions)
| Year Ended December 31, 2022 Forecast Range | ||||||||||||||
| Low Case | High Case | |||||||||||||
| SG&A expenses | $ | 517 | $ | 522 | ||||||||||
| Less: rabbi trust impact (a) | — | — | ||||||||||||
| Less: stock-based compensation expense | (57) | (57) | ||||||||||||
| Adjusted SG&A expenses | $ | 460 | $ | 465 | ||||||||||
(a) Impact of rabbi trust is not forecasted for the year ended December 31, 2022 as performance of underlying invested assets is not estimable.
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Hyatt Hotels Corporation
Reconciliation of Non-GAAP Measure: Comparable Owned and Leased Hotels Operating Margin to Owned and Leased Hotels Operating Margin
Below is a reconciliation of consolidated owned and leased hotels revenues and expenses, as used in calculating comparable owned and leased hotels operating margin percentages. Results of operations as presented on the condensed consolidated statements of income (loss) include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in owned and leased hotels expenses and are completely offset by the corresponding net gains (losses) and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings (losses). Below is a reconciliation of the margins excluding the impact of our rabbi trusts and excluding the impact of non-comparable hotels.
(in millions)
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2022 | 2021 | Change ($) | Change (%) | |||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Comparable owned and leased hotels | $ | 258 | $ | 83 | $ | 175 | 212.1 | % | ||||||||||||||||||
| Non-comparable owned and leased hotels | 13 | 21 | (8) | (40.6) | % | |||||||||||||||||||||
| Owned and leased hotels revenues | $ | 271 | $ | 104 | $ | 167 | 160.7 | % | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Comparable owned and leased hotels | $ | 189 | $ | 95 | $ | 94 | 96.4 | % | ||||||||||||||||||
| Non-comparable owned and leased hotels | 24 | 27 | (3) | (8.6) | % | |||||||||||||||||||||
| Rabbi trust impact | (3) | 2 | (5) | (309.1) | % | |||||||||||||||||||||
| Owned and leased hotels expenses | $ | 210 | $ | 124 | $ | 86 | 68.6 | % | ||||||||||||||||||
| Owned and leased hotels operating margin percentage | 22.6 | % | (19.7) | % | 42.3 | % | ||||||||||||||||||||
| Comparable owned and leased hotels operating margin percentage | 26.9 | % | (16.0) | % | 42.9 | % | ||||||||||||||||||||
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DEFINITIONS
Adjusted Earnings Before Interest Expense, Taxes, Depreciation, and Amortization (Adjusted EBITDA) and EBITDA
We use the terms Adjusted EBITDA and EBITDA throughout this earnings release. Adjusted EBITDA and EBITDA, as we define them, are non-GAAP measures. We define consolidated Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus our pro rata share of unconsolidated owned and leased hospitality ventures Adjusted EBITDA based on our ownership percentage of each owned and leased venture, adjusted to exclude the following items:
•interest expense;
•benefit (provision) for income taxes;
•depreciation and amortization;
•amortization of management and franchise agreement assets and performance cure payments, which constitute payments to customers (Contra revenue);
•revenues for the reimbursement of costs incurred on behalf of managed and franchised properties;
•costs incurred on behalf of managed and franchised properties that we intend to recover over the long term;
•equity earnings (losses) from unconsolidated hospitality ventures;
•stock-based compensation expense;
•gains (losses) on sales of real estate and other;
•asset impairments; and
•other income (loss), net
We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA of each of our reportable segments and eliminations to corporate and other Adjusted EBITDA.
Our board of directors and executive management team focus on Adjusted EBITDA as one of the key performance and compensation measures both on a segment and on a consolidated basis. Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations both on a segment and on a consolidated basis. Our president and chief executive officer, who is our chief operating decision maker, also evaluates the performance of each of our reportable segments and determines how to allocate resources to those segments, in part, by assessing the Adjusted EBITDA of each segment. In addition, the compensation committee of our board of directors determines the annual variable compensation for certain members of our management based in part on consolidated Adjusted EBITDA, segment Adjusted EBITDA, or some combination of both.
We believe Adjusted EBITDA is useful to investors because it provides investors with the same information that we use internally for purposes of assessing our operating performance and making compensation decisions and facilitates our comparison of results with results from other companies within our industry.
Adjusted EBITDA excludes certain items that can vary widely across different industries and among companies within the same industry including interest expense and benefit (provision) for income taxes, which are dependent on company specifics, including capital structure, credit ratings, tax policies, and jurisdictions in which they operate; depreciation and amortization which are dependent on company
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policies including how the assets are utilized as well as the lives assigned to the assets; Contra revenue which is dependent on company policies and strategic decisions regarding payments to hotel owners; and stock-based compensation expense which varies among companies as a result of different compensation plans companies have adopted. We exclude revenues for the reimbursement of costs and costs incurred on behalf of managed and franchised properties which relate to the reimbursement of payroll costs and for system-wide services and programs that we operate for the benefit of our hotel owners as contractually we do not provide services or operate the related programs to generate a profit over the terms of the respective contracts. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Therefore, we exclude the net impact when evaluating period-over-period changes in our operating results. Adjusted EBITDA includes costs incurred on behalf of our managed and franchised properties related to system-wide services and programs that we do not intend to recover from hotel owners. Finally, we exclude other items that are not core to our operations, such as asset impairments and unrealized and realized gains and losses on marketable securities.
Adjusted EBITDA and EBITDA are not substitutes for net income (loss) attributable to Hyatt Hotels Corporation, net income (loss), or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA and EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income (loss) generated by our business. Our management compensates for these limitations by referencing our GAAP results and using Adjusted EBITDA supplementally.
Adjusted EBITDA Margin
We define Adjusted EBITDA margin as Adjusted EBITDA divided by total revenues excluding Contra revenue and revenues for the reimbursement of costs incurred on behalf of managed and franchised properties (Adjusted revenues). We believe Adjusted EBITDA margin is useful to investors because it provides investors the same information that the Company uses internally for purposes of assessing operating performance.
Adjusted Net Income (Loss)
Adjusted net income (loss), as we define it, is a non-GAAP measure. We define Adjusted net income (loss) as net income (loss) attributable to Hyatt Hotels Corporation excluding special items, which are those items deemed not to be reflective of ongoing operations. We consider Adjusted net income (loss) to be an indicator of operating performance because excluding special items allows for period-over-period comparisons of our ongoing operations.
Adjusted net income (loss) is not a substitute for net income (loss) attributable to Hyatt Hotels Corporation, net income (loss), or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted net income (loss). Although we believe that Adjusted net income (loss) can make an evaluation of our operating performance more consistent because it removes special items that are deemed not to be reflective of ongoing operations, other companies in our industry may define Adjusted net income (loss) differently than we do. As a result, it may be difficult to use Adjusted net income (loss) or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted net income (loss) should not be considered as a measure of the income (loss) generated by our business. Our
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management compensates for these limitations by reference to its GAAP results and using Adjusted net income (loss) supplementally.
Adjusted Selling, General, and Administrative (SG&A) Expenses
Adjusted SG&A expenses, as we define it, is a non-GAAP measure. Adjusted SG&A expenses exclude the impact of deferred compensation plans funded through rabbi trusts and stock-based compensation expense. Adjusted SG&A expenses assist us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations, both on a segment and consolidated basis.
Comparable Owned and Leased Hotels Operating Margin
We define comparable owned and leased hotels operating margin as the difference between comparable owned and leased hotels revenues and comparable owned and leased hotels expenses. Comparable owned and leased hotels revenues is calculated by removing non-comparable hotels revenues from owned and leased hotels revenues as reported in our condensed consolidated statements of income (loss). Comparable owned and leased hotels expenses is calculated by removing both non-comparable owned and leased hotels expenses and the impact of expenses funded through rabbi trusts from owned and leased hotels expenses as reported in our condensed consolidated statements of income (loss). We believe comparable owned and leased hotels operating margin is useful to investors because it provides investors the same information that the Company uses internally for purposes of assessing operating performance.
Comparable Hotels
"Comparable system-wide hotels" represents all properties we manage or franchise, including owned and leased properties, that are operated for the entirety of the periods being compared and that have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Hotels that suspended operations due to the COVID-19 pandemic and have not yet re-opened are no longer included in our definition of comparable system-wide hotels. We may use variations of comparable system-wide hotels to specifically refer to comparable system-wide Americas full service hotels, including our wellness resorts, our select service hotels, or our all-inclusive resorts, for those properties that we manage or franchise within the Americas management and franchising segment, comparable system-wide ASPAC full service or select service hotels for those properties we manage or franchise within the ASPAC management and franchising segment, or comparable system-wide EAME/SW Asia full service or select service hotels for those properties that we manage or franchise within the EAME/SW Asia management and franchising segment. "Comparable owned and leased hotels" represents all properties we own or lease that are operated and consolidated for the entirety of the periods being compared and have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Comparable system-wide hotels and comparable owned and leased hotels are commonly used as a basis of measurement in our industry. "Non-comparable system-wide hotels" or "non-comparable owned and leased hotels" represent all hotels that do not meet the respective definition of "comparable" as defined above.
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Constant Dollar Currency
We report the results of our operations both on an as-reported basis, as well as on a constant dollar basis. Constant dollar currency, which is a non-GAAP measure, excludes the effects of movements in foreign currency exchange rates between comparative periods. We believe constant dollar analysis provides valuable information regarding our results as it removes currency fluctuations from our operating results. We calculate constant dollar currency by restating prior-period local currency financial results at the current period's exchange rates. These restated amounts are then compared to our current period reported amounts to provide operationally driven variances in our results.
Average Daily Rate (ADR)
ADR represents hotel room revenues, divided by the total number of rooms sold in a given period. ADR measures the average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in our industry, and we use ADR to assess the pricing levels that we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described below.
Occupancy
Occupancy represents the total number of rooms sold divided by the total number of rooms available at a hotel or group of hotels. Occupancy measures the utilization of a hotel's available capacity. We use occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable ADR levels as demand for hotel rooms increases or decreases.
Revenue per Available Room (RevPAR)
RevPAR is the product of the average daily rate and the average daily occupancy percentage. RevPAR does not include non-room revenues, which consist of ancillary revenues generated by a hotel property, such as food and beverage, parking, and other guest service revenues. Our management uses RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate hotel performance on a regional and segment basis. RevPAR is a commonly used performance measure in our industry.
RevPAR changes that are driven predominantly by changes in occupancy have different implications for overall revenue levels and incremental profitability than do changes that are driven predominantly by changes in average room rates. For example, increases in occupancy at a hotel would lead to increases in room revenues and additional variable operating costs, including housekeeping services, utilities, and room amenity costs, and could also result in increased ancillary revenues, including food and beverage. In contrast, changes in average room rates typically have a greater impact on margins and profitability as average room rate changes result in minimal impacts to variable operating costs.
Net Package ADR
Net Package ADR represents net package revenues, divided by the total number of rooms sold in a given period. Net Package ADR measures the average room price attained by a hotel, and Net Package ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. Net Package ADR is a commonly used performance measure in our industry, and we use Net Package ADR to assess the pricing levels that we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described above.
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Net Package RevPAR
Net Package RevPAR is the product of the net package ADR and the average daily occupancy percentage. Net Package RevPAR generally includes revenue derived from the sale of package revenue comprised of rooms revenue, food and beverage, and entertainment, net of compulsory tips paid to employees. Our management uses Net Package RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate hotel performance on a regional and segment basis. Net Package RevPAR is a commonly used performance measure in our industry.
Net Financed Contracts
Net Financed Contracts represent Unlimited Vacation Club contracts signed during the period for which an initial cash down payment has been received and the remaining balance is contractually due in monthly installments over an average term of less than 4 years. The Net Financed Contract balance is calculated as the unpaid portion of membership contracts reduced by expenses related to fulfilling the membership program contracts and further reduced by an allowance for future estimated uncollectible installments. Net Financed Contract balances are not reported on our condensed consolidated balance sheets as our right to collect future installments is conditional on our ability to provide continuous access to member benefits at AMR Collection resorts over the contract term, and the associated expenses to fulfill the membership contracts become liabilities of the Company only after the installments are collected. We believe Net Financed Contracts is useful to investors as it represents an estimate of future cash flows due in accordance with contracts signed in the current period. At March 31, 2022, the Net Financed Contract balance not recorded on our condensed consolidated balance sheet was $140 million.
Net Deferrals
Net Deferrals represent the change in contract liabilities associated with the Unlimited Vacation Club membership contracts less the change in deferred cost assets associated with the contracts. The contract liabilities and deferred cost assets are recognized as revenue and expense, respectively, on our condensed consolidated statements of income (loss) over the customer life, which ranges from 3 to 25 years.
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Q1 2022 Supplemental Presentation 05/10/2022 S E C R E T S ® B A H I A M I T A
D ISC LA IMERS 2 NON-GAAP FINANCIAL MEASURES This presentation includes references to certain financial measures, each identified with the symbol“†”, that are not calculated or presented in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures have important limitations and should not be considered in isolation or as a substitute for measures of Hyatt Hotels Corporation’s (the “Company”) financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures, as presented, may not be comparable to similarly titled measures of other companies due to varying methods of calculations. For how we define the non-GAAP financial measures and a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure, please refer to the Appendix at the end of this presentation. KEY BUSINESS METRICS This presentation includes references to certain key business metrics used by the Company. For how we define these metrics, please refer to the Appendix at the end of this presentation.
A LG SIG N IF IC A N TLY EXC EED S EXPEC TATIO NS FO R TH R EE MO N TH S EN D ED MA R C H 31 , 2022 3 $56M Adjusted EBITDA† Net Package RevPAR was 92% recovered to 2019 for hotels in the Americas; exceeded 2019 in March1 AMR™ Management, Franchise and Other Fees Revenue of $30M Signed 7.8K new membership contracts; 8% above 2019 Membership contribution of 12% of AMR™ room nights + $24M Net Deferrals $7M Net Financed Contracts + F I R S T Q U A R T E R K E Y H I G H L I G H T S 579K Departures; 72% recovered to 2019 levels Strong pricing and transformed business model led to margins above 20% S E C R E T S ® S T . J A M E S M O N T E G O B A Y 1. Information provided is based on properties managed by ALG for both the three months ended March 31, 2019 and the three months ended March 31, 2022.
4 Three Months Ended March 31, 2022 USD in millions Hyatt excluding ALG ALG Combined REVENUES: Owned and leased hotels $ 271 $ - $ 271 Management, franchise, and other fees 124 30 154 Contra revenue (9) - (9) Net management, franchise, and other fees 115 30 145 Distribution and destination management - 246 246 Other revenues 43 34 77 Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties 511 29 540 Total revenues 940 339 1,279 DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES: Owned and leased hotels 208 2 210 Distribution and destination management - 194 194 Depreciation and amortization 64 55 119 Other direct costs 42 25 67 Selling, general, and administrative 74 37 111 Costs incurred on behalf of managed and franchised properties 527 29 556 Direct and selling, general, and administrative expenses 915 342 1,257 Net losses and interest income from marketable securities held to fund rabbi trusts (31) - (31) Equity losses from unconsolidated hospitality ventures (9) - (9) Interest expense (40) - (40) Asset impairments (1) (2) (3) Other loss, net (9) (1) (10) LOSS BEFORE INCOME TAXES (65) (6) (71) BENEFIT (PROVISION) FOR INCOME TAXES1 1 (3) (2) NET LOSS (64) (9) (73) NET LOSS ATTRIBUTATBLE TO NONCONTROLLING INTERESTS - - - NET LOSS ATTRIBUTATBLE TO HYATT HOTELS CORPORATION $ (64) $ (9) $ (73) A LG C O N TR IBU TIO N TO H YATT C O N D ENSED C O N SO LIDATED STATEMENT O F IN C O ME 1. ALG column represents ALG non-US tax expense All information and data is presented and provided solely for informational purposes to enable investors to compare performance on a consistent basis.
5 Three Months Ended March 31, 2022 USD in millions Hyatt excluding ALG ALG Combined Net loss attributable to Hyatt Hotels Corporation $ (64) $ (9) $ (73) Interest expense 40 - 40 (Benefit) provision for income taxes1 (1) 3 2 Depreciation and amortization 64 55 119 EBITDA† 39 49 88 Contra revenue 9 - 9 Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties (511) (29) (540) Costs incurred on behalf of managed and franchised properties 527 29 556 Equity losses from unconsolidated hospitality ventures 9 - 9 Stock-based compensation expense 24 4 28 Asset impairments 1 2 3 Other loss, net 9 1 10 Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA† 6 - 6 Adjusted EBITDA† $ 113 $ 56 $ 169 Net Deferral Activity Increase in Deferred Revenue $ - $ 49 $ 49 Increase in Deferred Costs - (25) (25) Net Deferrals $ - $ 24 $ 24 Increase in Net Financed Contracts $ - $ 7 $ 7 A LG C O N TR IBU TIO N TO H YATT A D JU STED EB ITD A † IN Q 1 2022 1. ALG column represents ALG non-US tax expense All information and data is presented and provided solely for informational purposes to enable investors to compare performance on a consistent basis.
A LG PER FO R MA NCE B Y Q U A R TER IN 2022 6 Q1 Q2 Q3 Q4 Year to Date Net Package RevPAR (Americas) $ 214.32 $ 214.32 Net Package RevPAR (Europe) $ 71.03 $ 71.03 Net Package RevPAR (Total) $ 189.46 $ 189.46 Unlimited Vacation Club Signed Contracts 7,805 7,805 Departures 579,110 579,110 USD in millions Management, franchise, and other fees 30 30 Other revenues 34 34 Distribution and destination management revenue 246 246 ALG Adjusted Revenues† $ 310 $ 310 Distribution and destination management expense 194 194 Adjusted SG&A† 33 33 ALG Adjusted EBITDA† $ 56 $ 56 Increase in Deferred Revenue 49 49 Increase in Deferred Costs (25) (25) Net Deferrals $ 24 $ 24 Increase in Net Financed Contracts $ 7 $ 7 All information and data is presented and provided solely for informational purposes to enable investors to compare performance on a consistent basis.
Appendix D R E A M S ® V I S T A C A N C U N G O L F & S P A R E S O R T 7
8 D EFIN IT IO N S Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (Adjusted EBITDA) and EBITDA We use the terms Adjusted EBITDA and EBITDA throughout this presentation. Adjusted EBITDA and EBITDA, as we define them, are non-GAAP measures. We define consolidated Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus our pro rata share of unconsolidated owned and leased hospitality ventures Adjusted EBITDA based on our ownership percentage of each owned and leased venture, adjusted to exclude the following items: • interest expense; • benefit (provision) for income taxes; • depreciation and amortization; • amortization of management and franchise agreement assets and performance cure payments, which constitute payments to customers (Contra revenue); • revenues for the reimbursement of costs incurred on behalf of managed and franchised properties; • costs incurred on behalf of managed and franchised properties that we intend to recover over the long term; • equity earnings (losses) from unconsolidated hospitality ventures; • stock-based compensation expense; • gains (losses) on sales of real estate and other; • asset impairments; and • other income (loss), net We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA of each of our reportable segments and eliminations to corporate and other Adjusted EBITDA. Our board of directors and executive management team focus on Adjusted EBITDA as one of the key performance and compensation measures both on a segment and on a consolidated basis. Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations both on a segment and on a consolidated basis. Our president and chief executive officer, who is our chief operating decision maker, also evaluates the performance of each of our reportable segments and determines how to allocate resources to those segments, in part, by assessing the Adjusted EBITDA of each segment. In addition, the compensation committee of our board of directors determines the annual variable compensation for certain members of our management based in part on consolidated Adjusted EBITDA, segment Adjusted EBITDA, or some combination of both. We believe Adjusted EBITDA is useful to investors because it provides investors with the same information that we use internally for purposes of assessing our operating performance and making compensation decisions and facilitates our comparison of results with results from other companies within our industry. Adjusted EBITDA excludes certain items that can vary widely across different industries and among companies within the same industry including interest expense and benefit (provision) for income taxes, which are dependent on company specifics, including capital structure, credit ratings, tax policies, and jurisdictions in which they operate; depreciation and amortization which are dependent on company policies including how the assets are utilized as well as the lives assigned to the assets; Contra revenue which is dependent on company policies and strategic decisions regarding payments to hotel owners; and stock-based compensation expense which varies among companies as a result of different compensation plans companies have adopted. We exclude revenues for the reimbursement of costs and costs incurred on behalf of managed and franchised properties which relate to the reimbursement of payroll costs and for system-wide services and programs that we operate for the benefit of our hotel owners as contractually we do not provide services or operate the related programs to generate a profit over the terms of the respective contracts. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Therefore, we exclude the net impact when evaluating period-over-period changes in our operating results. Adjusted EBITDA includes costs incurred on behalf of our managed and franchised properties related to system-wide services and programs that we do not intend to recover from hotel owners. Finally, we exclude other items that are not core to our operations, such as asset impairments and unrealized and realized gains and losses on marketable securities. Adjusted EBITDA and EBITDA are not substitutes for net income (loss) attributable to Hyatt Hotels Corporation, net income (loss), or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA and EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income (loss) generated by our business. Our management compensates for these limitations by referencing our GAAP results and using Adjusted EBITDA supplementally.
9 D EFIN IT IO N S Adjusted Selling, General, and Administrative (SG&A) Expenses Adjusted SG&A expenses, as we define it, is a non-GAAP measure. Adjusted SG&A expenses exclude the impact of deferred compensation plans funded through rabbi trusts and stock-based compensation expense. Adjusted SG&A expenses assist us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations, both on a segment and consolidated basis. Comparable Hotels "Comparable system-wide hotels" represents all properties we manage or franchise, including owned and leased properties, that are operated for the entirety of the periods being compared and that have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Hotels that suspended operations due to the COVID-19 pandemic and have not yet re-opened are no longer included in our definition of comparable system-wide hotels. We may use variations of comparable system-wide hotels to specifically refer to comparable system-wide Americas full service hotels, including our wellness resorts, our select service hotels, or our all-inclusive resorts, for those properties that we manage or franchise within the Americas management and franchising segment, comparable system-wide ASPAC full service or select service hotels for those properties we manage or franchise within the ASPAC management and franchising segment, or comparable system-wide EAME/SW Asia full service or select service hotels for those properties that we manage or franchise within the EAME/SW Asia management and franchising segment. "Comparable owned and leased hotels" represents all properties we own or lease that are operated and consolidated for the entirety of the periods being compared and have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Comparable system-wide hotels and comparable owned and leased hotels are commonly used as a basis of measurement in our industry. "Non-comparable system-wide hotels" or "non-comparable owned and leased hotels" represent all hotels that do not meet the respective definition of "comparable" as defined above. Occupancy represents the total number of rooms sold divided by the total number of rooms available at a hotel or group of hotels. Occupancy measures the utilization of a hotel's available capacity. We use occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable ADR levels as demand for hotel rooms increases or decreases. Revenue per Available Room (RevPAR) is the product of the average daily rate and the average daily occupancy percentage. RevPAR does not include non-room revenues, which consist of ancillary revenues generated by a hotel property, such as food and beverage, parking, and other guest service revenues. Our management uses RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate hotel performance on a regional and segment basis. RevPAR is a commonly used performance measure in our industry. RevPAR changes that are driven predominantly by changes in occupancy have different implications for overall revenue levels and incremental profitability than do changes that are driven predominantly by changes in average room rates. For example, increases in occupancy at a hotel would lead to increases in room revenues and additional variable operating costs, including housekeeping services, utilities, and room amenity costs, and could also result in increased ancillary revenues, including food and beverage. In contrast, changes in average room rates typically have a greater impact on margins and profitability as average room rate changes result in minimal impacts to variable operating costs. Net Package RevPAR is the product of the net package ADR and the average daily occupancy percentage. Net Package RevPAR generally includes revenue derived from the sale of package revenue comprised of rooms revenue, food and beverage, and entertainment, net of compulsory tips paid to employees. Our management uses Net Package RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate hotel performance on a regional and segment basis. Net Package RevPAR is a commonly used performance measure in our industry. Net Financed Contracts represent Unlimited Vacation Club contracts signed during the period for which an initial cash down payment has been received and the remaining balance is contractually due in monthly installments over an average term of less than 4 years. The Net Financed Contract balance is calculated as the unpaid portion of membership contracts reduced by expenses related to fulfilling the membership program contracts and further reduced by an allowance for future estimated uncollectible installments. Net Financed Contract balances are not reported on our condensed consolidated balance sheets as our right to collect future installments is conditional on our ability to provide continuous access to member benefits at AMR Collection resorts over the contract term, and the associated expenses to fulfill the membership contracts become liabilities of the Company only after the installments are collected. We believe Net Financed Contracts is useful to investors as it represents an estimate of future cash flows due in accordance with contracts signed in the current period. At March 31, 2022, the Net Financed Contract balance not recorded on our condensed consolidated balance sheet was $140 million. Net Deferrals represent the change in contract liabilities associated with the Unlimited Vacation Club membership contracts less the change in deferred cost assets associated with the contracts. The contract liabilities and deferred cost assets are recognized as revenue and expense, respectively, on our condensed consolidated statements of income (loss) over the customer life, which ranges from 3 to 25 years.
10 R EC O N CIL IAT ION O F N O N -G AAP F IN A N CIA L MEA SU R E Hyatt Hotels Corporation Reconciliation of Non-GAAP Financial Measure: SG&A Expenses to Adjusted SG&A Expenses Results of operations as presented on the condensed consolidated statements of income (loss) include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in SG&A expenses and are completely offset by the corresponding net gains (losses) and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings (losses). SG&A expenses also include expenses related to stock-based compensation. Below is a reconciliation of this measure excluding the impact of our rabbi trust investments and stock-based compensation expense. (USD in millions) Three Months Ended March 31, 2022 2021 SG&A expenses $ 111 $ 95 Less: rabbi trust impact 28 (10) Less: stock-based compensation expense (28) (28) Adjusted SG&A† expenses $ 111 $ 57 Three Months Ended March 31, 2022 2021 Americas management and franchising $ 15 $ 11 ASPAC management and franchising 10 10 EAME/SW Asia management and franchising 9 7 Owned and leased hotels 2 2 Apple Leisure Group 33 - Corporate and other 42 27 Adjusted SG&A† expenses $ 111 $ 57
11 R EC O N CIL IAT ION O F N O N -G AAP F IN A N CIA L MEA SU R E (C O N T. ) Hyatt Hotels Corporation Reconciliation of Non-GAAP Measure: Reconciliation of Apple Leisure Group Segment SG&A Expenses to Segment Adjusted SG&A Expenses Results of operations as presented on the condensed consolidated statements of income (loss) include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in SG&A expenses and are completely offset by the corresponding net gains (losses) and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings (losses). SG&A expenses also include expenses related to stock-based compensation. Below is a reconciliation of this measure excluding the impact of our rabbi trust investments and stock-based compensation expense. (USD in millions) Q1 2022 FY 2022 ALG Segment SG&A expenses $ 37 $ 37 Less: rabbi trust impact - - Less: stock-based compensation expense (4) (4) ALG Segment Adjusted SG&A† expenses $ 33 $ 33
12 R EC O N CIL IAT ION O F N O N -G AAP F IN A N CIA L MEA SU R E (C O N T. ) Hyatt Hotels Corporation Reconciliation of Non-GAAP Measure: Reconciliation of Net Loss Attributable to Hyatt Hotels Corporation to EBITDA and EBITDA to Adjusted EBITDA (USD in millions) Q1 2022 FY 2022 Net loss attributable to Hyatt Hotels Corporation $ (73) $ (73) Interest expense 40 40 Provision for income taxes 2 2 Depreciation and amortization 119 119 EBITDA† 88 88 Contra revenue 9 9 Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties (540) (540) Costs incurred on behalf of managed and franchised properties 556 556 Equity losses from unconsolidated hospitality ventures 9 9 Stock-based compensation expense 28 28 Asset impairments 3 3 Other loss, net 10 10 Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA 6 6 Adjusted EBITDA† $ 169 $ 169
13 R EC O N CIL IAT ION O F N O N -G AAP F IN A N CIA L MEA SU R E (C O N T. ) Hyatt Hotels Corporation Reconciliation of Non-GAAP Measure: Reconciliation of Net Loss Attributable to Apple Leisure Group Segment to Segment EBITDA and Segment EBITDA to Segment Adjusted EBITDA (USD in millions) Q1 2022 FY 2022 Net loss attributable to ALG Segment $ (9) $ (9) Interest expense - - Provision for income taxes1 3 3 Depreciation and amortization 55 55 ALG Segment EBITDA† 49 49 Contra revenue - - Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties (29) (29) Costs incurred on behalf of managed and franchised properties 29 29 Equity losses from unconsolidated hospitality ventures - - Stock-based compensation expense 4 4 Asset impairments 2 2 Other loss, net 1 1 Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA - - ALG Segment Adjusted EBITDA† $ 56 $ 56 1. Represents ALG non-US tax expense
14 R EC O N CIL IAT ION O F N O N -G AAP F IN A N CIA L MEA SU R E (C O N T. ) Hyatt Hotels Corporation Reconciliation of Non-GAAP Measure: Reconciliation of Apple Leisure Group Segment Total Revenues to Segment Adjusted Revenues (USD in millions) Q1 2022 FY 2022 ALG Segment Total Revenues $ 339 $ 339 Add: Contra revenue - - Less: Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties (29) (29) ALG Segment Adjusted Revenues† $ 310 $ 310
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