As Hyatt Hotels looks to close out its more than $2-billion deal for Playa Hotels & Resorts, it’s having to also deal with another reality: waning room bookings.
The Chicago-based lodging company reported that its comparable system-wide hotels RevPAR increased 5.7% in the first quarter compared with the same time a year ago, but what CFO Joan Bottarini warned of “signs of slowing customer booking behavior” that led the company to project its full-year 2025 RevPAR growth to between 1% to 3%, which implies RevPAR growth for the balance of the year of between flat to up 2% for the U.S.
“We are seeing mixed indicators as it relates to future booking activity based on what is currently on the books and recent booking trends,” said Mark Hoplamazian, president and CEO of Hyatt Hotels. “We are seeing softer booking trends for near-term leisure and business transient bookings in the U.S., which have been down in the high single digits versus last year.”
Hoplamazian added that expectations are for RevPAR growth in international markets to outperform the U.S.
Like many CEOs, Hoplamazian is looking for more clarity on things like tariffs, which have clouded the economic picture. “We believe that if visibility to macroeconomic policy improves, bookings could accelerate from what we have seen over the past few weeks,” he said.
Right now, however, it’s a choppy environment, Hoplamazian said. “The pace as we get into May is coming off a bit in terms of leisure,” he said, all except Hyatt’s all-inclusive business, which “remains very solid.”
Hoplamazian referred to business as tale of three segments, stating that luxury is trending strong, but that the place where it’s negative is in upscale and select service, where business travel is falling off. “Overall,” he said, “our negotiated accounts, our biggest accounts, are actually positive in select service, but the overall business transient pace is off on the select-service side.”
Most encouraging, he said, is that about 50% of business on the books for 2026 is on an over 10% pace increase, including healthy rate increases. He added that while the near term is “definitely disrupted,” he is confident in Hyatt since, he said 70% of its portfolio is in the luxury and upper-upscale segments.
But he did offer a rather alarmist note. “The GDP figures that came out are not encouraging. It doesn’t necessarily feel like we’re on the precipice of some massive contraction, but I’m not an economist.” U.S. GDP contracted at an annualized rate of 0.3% in the first quarter of 2025, marking the first decline since the first quarter of 2022.
Prior to providing more color on Hyatt’s Q1 performance, Hoplamazian offered an update on the Playa Hotels & Resorts transaction. In February, Hyatt ntered into an agreement to acquire all outstanding shares of Playa for $13.50 per share, or approximately $2.6 billion, including approximately $900 million of debt, net of cash. On April 28, Hyatt extended the tender offer period until May 23, 2025, at which time it will evaluate if all closing conditions are met. “We continue to advance discussions for the sale of Playa’s real estate and expect to be in a position to enter into an agreement to sell the real estate in the near future,” Hoplamazian said.
Selling real estate has been a recurring theme for Hyatt as it pushes forward its asset-light agenda. Hoplamazian said it has signed one purchase-and-sale agreement for one property, two that are under a letter of intent and three hotels in a formal marketing process. It remains under contract for the sales of Hyatt Grand Central New York and Andaz London, Liverpool Street, but does not expect either of those transactions to close this year. “We will continue to reduce our ownership of hotels,” Hoplamazian said.
At the end of the first quarter, Hyatt’s pipeline stood at approximately 138,000 rooms, a 7% increase over last year. Hoplamazian highlighted three signings in the quarter: Park Hyatt Taormina in Italy, Grand Hyatt Shiwalik Hills in India and a height centric in downtown Cincinnati,
New signings replaced the rooms that opened during the quarter, and development interest in our brands remained very strong. We signed several exciting projects during the quarter, including the Park Hyatt Taormina in Italy, the Grand Hyatt Chihuahua hills in India and Hyatt Centric Cincinnati.
Net-rooms growth was 10.5% in the quarter compared to the same time a year ago. Net-rooms growth is projected between 6% to 7% for the full year compared to full-year 2024. In February, Hyatt opened the first of its Hyatt Studios brand in Mobile, Ala. Hoplamazian said expectations are to ramp up further in the upper-midscale segment with the introduction of its newest brand, Hyatt Select, a transient conversion brand it unveiled in Q1.
Building costs are rising, with Hoplamazian sharing that conversations with developers noted that cost estimations currently are in a range as high as 20% in terms of cost to build. He said that case good manufacturers in the U.S. are now working on an accelerated basis to limit any impact of tariffs with respect to imported case goods.
Hyatt’s World of Hyatt loyalty program stood at approximately 56 million members at the end of the quarter, a 22% increase over the past year.