In preparation for HYATT’s Q1 earnings release tomorrow, we’ve put together the pertinent forward looking commentary from HYATT’s Q4 earnings call.




  • “During the quarter, we saw continuation of the operating trends we began to see earlier in the year, as business continued to strengthen across the system. Almost 70% of our full service hotels worldwide showed improvements in average daily rate.”
  • “In terms of future asset sales, relative to the exploration that we started last year on a group of 11 assets, we may sell one more asset, which would conclude that process”
  • [In 4Q owned hotels] “RevPAR results were negatively impacted by approximately 400 basis points due to renovation at five owned properties.”
  • “Operating margins at comparable owned and leased hotels increased by 210 basis points in the fourth quarter. Approximately half of the reported margin improvement was a result of improved operating performance. The other half was due to items such as property tax refunds at a few hotel and other non-recurring items.”
  • “The group revenue pace for 2011 is positive. Group revenue booked during the fourth quarter of 2010 for 2011 was up over 20% as compared to group revenue booked during the fourth quarter of 2009 for 2010.”
  • “As for transient revenue, slightly higher rates resulted in higher revenues compared to the fourth quarter of 2009.”
  • “Corporate negotiated business segments represents approximately 10% of our business in North America. With the majority of the negotiations complete, we expect a mid-to-high single-digit increase in corporate rates in 2011.”
  • “Approximately 30% of full-service hotels in North America paid incentive fees in 2010… The number of international hotels paying incentive fees in 2010 was about the same as that in 2009, at about 80%.”
  • 2011 Guidance:
    • Capex: $380-400MM
      • “Our maintenance CapEx that we’re looking at is between 5% and 6% of owned hotel revenue”
      • “While we do not anticipate these renovations to significantly disrupt revenues, given that we’re scheduling most of the work to be done during the slower months, the capital expenditures for these renovations are above and beyond what we would consider a normal maintenance plan.”
    • D&A: $280-290MM
    • Interest expense: $50MM
    • “This year we plan to open about 15 hotels”
    • [SG&A]: “As we think about ‘11, we believe we will have inflation in terms of merit increases. We believe that we will be adding some incremental resources relative to supporting the development activities, largely in the areas of real estate, finance and legal. And we look at our head count on a very thoughtful basis. And the head count that we add incrementally is truly driven by growth in other related activities.”
  • “We estimate that during the first three quarters of 2011, the cumulative negative impact of the renovations at our five owned hotels will be approximately 300 to 350 basis points to owned and leased RevPAR, and approximately $20 million to $25 million of EBITDA. This impact will be front-loaded, with the biggest impact in the first quarter... So if you’re going to split it between quarter one, quarter two, quarter three, I would say the mix will be more like 40% in quarter one, 30% in quarter two, and 30% in quarter three. The fact of the matter is, the number of rooms that we are taking out of inventory for renovation purposes, relative – in quarter one for example, relative to quarter four is up by about 20%.”
  • “The hotels that we sold during the fourth quarter, the 2010 full year pro forma EBITDA would have been approximately $7 million. Second, we had some one-time factors in 2010 such as a timeshare settlement, which increased EBITDA in the first quarter, and non-recurring items, which helped margin growth during the fourth quarter”
  • Q: “Business momentum …. in January and early February”         
    • A: “Like the others, the weather has hurt us. We’ve also had renovation. And I said earlier, the impact of renovation in the first quarter is going to be a little higher relative to the rest of the year just because we are taking advantage of, A, the momentum on renovation and, B, the slower top line growth. Internationally, the trends that we are seeing in the quarter continue. And overall, relative to our performance, North America looks slightly hurt relative to the weather, but international continues to chug along.”
  • [Group business] “The business that is in our books as we step into 2011 is a little over 70%. And that’s in line with our expectations. That we have now – if you look forward, traditionally the business in 2012 and 2013, it’s a little difficult to predict because the visibility continues to be lower. The windows haven’t lengthened from that perspective. But traditionally at this time of the year, one would see about 40% of the business for 2012 booked and about 25% of the business for 2013.”
  • “If you define peak as ‘07, we had 59% of the hotels in North America paying incentive fees at that point of time...So international peak, again, defined as ‘07 is a little north of 90%.”

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