Hyatt Hotels Corp., Chicago, saw its net income increase significantly in the fourth quarter of 2011 to US$52 million from US$6 million during the same period in 2010, although adjusted for special items the increase was from US$12 million in 2010 to US$52 million in 2011.
Analysts pointed out that the fourth quarter earnings were held back by about 400 basis points due to renovations and that the company’s RevPAR, while consistent with peers, was below some estimates.
“Owned RevPAR growth of 6.0% is consistent with earlier peers reports; systemwide RevPAR growth of 5.0% is toward the low end of peers however … comparable owned RevPAR growth of 6% was well shy of our 8.5% estimate. We expected strong momentum in 4Q11 as it was our understanding that the company completed five major renovations toward the end of 3Q11 and would benefit from easy annual comparisons,” said David Loeb, an analyst at Baird Equity Research.
Hyatt president and CEO Mark Hoplamazian said that although transient business travel was up, projecting demand for 2012 was difficult given the cautiousness of many corporations.
“We were pleased to see sustained transient business travel around the world in the fourth quarter. Demand form this segment was the primary drive of our results in 2011,” said Hoplamazian. “Though group demand in the U.S. was stronger than in the fourth quarter of 2010, corporations remain cautious about making longer-term commitments and this continues to limit visibility into forward bookings.”
Hyatt’s select-service hotels are performing particularly well, with 14% RevPAR growth over the last two years.