CHICAGO Hyatt Hotels Corp. turned a profit in the second quarter, a marked improvement over its performance a year ago, driven by increased demand among transient guests.
Hyatt posted second-quarter net income of US$25 million, or 14 cents per share, compared to a net loss US$50 million, or 34 cents per share, a year ago. Earnings excluding one-time items were 18 cents a share, which beat consensus analyst expectations of about 8 cents.
RevPAR increased 9.6% compared to the second quarter of 2009 globally, although international properties dramatically outperformed hotels in Hyatt’s North America home base. International hotels boosted RevPAR by 21.4%, while the increase was much more modest in North America, at 6.8%.
Transient demand ticked up noticeably in the quarter, Hyatt says, offering reason for optimism over the rest of the year. “The group booking cycle continues to be short, but we saw increased levels of booking activity for future periods during the second quarter,” says President and CEO Mark Hoplamazian. “We experienced strong margin performance in our owned hotels despite the fact that the revenue increase was driven primarily by occupancy gains.”
Hyatt opened 12 properties during the second quarter, including six Hyatt Place properties, three Hyatt Summerfield Suites properties, as well as full-service hotels in California, Miami and Curacao.
Additionally, in early July, Hyatt opened the Andaz 5th Avenue in New York City and announced the redevelopment of Hyatt Regency New Orleans, which is expected to re-open in late 2011. “We continue to enjoy strong developer and third-party owner interest in all of our brands and are excited about our future expansion prospects,” Hoplamazian says.
Hyatt’s debt totals US$853 million, and it has undrawn borrowing availability of approximately US$1.1 billion under its revolving credit facility.