Hyatt Hotels Corp (H) Reports Q3 2023 Earnings: Net Income Rises to $68 Million
Hyatt Hotels Corp (NYSE:H) reported a net income of $68 million in Q3 2023, a significant increase from $28 million in Q3 2022.
The company achieved a record total fee revenue of $250 million.
Hyatt's pipeline expanded to a new high of 123,000 rooms.
Share repurchases were approximately 1.25 million Class A shares for $144 million in Q3 2023.
On November 2, 2023, Hyatt Hotels Corp (NYSE:H) released its third quarter 2023 financial results. The company reported a net income of $68 million, a significant increase from $28 million in the same period last year. Adjusted net income was $75 million, compared to $72 million in Q3 2022. Diluted EPS was $0.63, up from $0.25 in Q3 2022, while adjusted diluted EPS was $0.70, compared to $0.64 in the same period last year.
Financial Highlights
Hyatt's total fee revenue reached a new record of $250 million, driven by strong global top-line performance and net rooms growth. The company's pipeline expanded to a new high of 123,000 rooms. Comparable system-wide RevPAR increased 8.9% in Q3 2023, compared to the same period in 2022, driven by occupancy up 420 basis points and Average Daily Rate up 2.6%. Net Rooms Growth was approximately 6.2% in Q3 2023.
Commentary from the CEO
Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt, said, "We had a tremendous quarter, largely driven by the strength in our core business. Our third quarter performance contributed to a 25% improvement in total fees for the first nine months of the year compared to 2022. We expect strong fee growth to continue, fueled by our record pipeline of 123,000 rooms and higher levels of conversion opportunities combined with robust demand for travel around the globe. We continue to successfully execute our asset-light transformation and growth strategy while returning meaningful capital to shareholders."
Transactions and Capital Strategy
On September 28, 2023, the company sold its interests in the entities which own the Destination Residential Management business to an unrelated third party for $2 million of base consideration and up to an additional $48 million of contingent consideration to be earned within two years following the sale upon the achievement of certain performance-based metrics and contract extensions.
Balance Sheet and Liquidity
As of September 30, 2023, the company reported total debt of $3,055 million and total liquidity of approximately $2.2 billion with $727 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.
2023 Outlook
The company expects a system-wide RevPAR increase of 15% to 16% and a net rooms growth of approximately 6.0% for the full year 2023. The estimated net income is approximately $210 million, with adjusted EBITDA expected to be between $1,005 million and $1,025 million.
Explore the complete 8-K earnings release (here) from Hyatt Hotels Corp for further details.
This article first appeared on GuruFocus.
