HYATT YOUTUBE

In preparation for HYATT's 4Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.

  • "The Hotel Nikko acquisition in Mexico City which we acquired and rebranded as the Hyatt Regency in Mexico City this past May is performing well.  We're on track to begin renovations to this property next year."
  • "The public space renovations of the Grand Hyatt San Francisco are expected to be completed by the end of this year."
  • "Our international loan-to-lease hotels were relatively weaker in a number of markets with the exception of London, which benefited from the Summer Olympics."
  • "For the full year 2012, we expect to realize approximately $15 million of savings relative to our prior estimate, about half of which is a reduction of run rate expenses driven by savings from personnel and staffing changes and about half is due to other cost savings initiatives that are more one-time in nature."
  • "In terms of adjusted EBITDA impact from these asset sales for the full year of 2013, earnings will be reduced by about $11 million to $12 million relative to 2012, or about $15 million on a full year run-rate basis."
  • "We've approximately $131 million remaining under our authorization. We remained committed to a balanced strategy of investing in growth and also returning cash to shareholders when appropriate."
  • "In the coming quarter and then into early 2013, we're likely to see a carryover of the same type of issues that we saw in the third quarter... We do think that there are some signs of a more modest overall growth trajectory. Longer term, we continue to feel very confident about the strength of our brands and about the prospects for the industry."
  • "The election in the U.S. next week, the party Congress in China that begins next week, and the timing of other holidays are likely to negatively impact the fourth quarter."
  • "Fee growth will be negatively affected in the short-term by ongoing renovations at large managed hotels, notably in the fourth quarter we expect the Grand Hyatt, San Diego, the Grand Hyatt and Hyatt Regency hotels in Washington, D.C., and the Hyatt Regency Dallas to be under renovation."
  • "As we look to next year, several of our large Grand Hyatt hotels in gateway cities in the Asia-Pacific region are planning renovations. These renovations are great for our brand presence and for our guests and for the owners over the long term, but do lead to short-term impact on RevPAR and fees."
  • "Our negotiated corporate volume business is actually increasing year-over-year and I think that that will continue to be the case as we continue to focus on the expansion of our Select Service presence around the country."
  • "We expect the realignment savings to continue into 2013, partially offset by wage and other cost inflation, and the selected increase in resources as we allocate some resources towards growth initiatives. Overall, we expect the net impact to result in sort of a flattish SG&A growth in 2013."
  • "In the third quarter and heading into fourth quarter, definitely a slowdown in the rate of growth in group bookings for corporate customers. And I think a lot of that has to do with uncertainty due to the fiscal cliff, the election and the like. Government business was particularly weak, it was down in the third quarter for us significantly, so if you look at our third quarter results we had a slight decline in room nights for group bookings for the quarter. More than a 100% of that decline was derived from government business. Part of that is demand and part of it was yield-management decisions that we undertook to actually trade away from some of that business, so some unusual short-term impacts from the government side."
  • "The short-term booking pace in the quarter, for the quarter and in the quarter for the year bookings is still dominated by corporations. And when we see the production in the third quarter, our total production in the third quarter was up significantly, up 12% year-over-year, the vast majority of that was associations booking into 2014. And we believe that the reason we're seeing that is because associations are looking out further into the future. They are seeing higher levels of overall occupancy and are now beginning to secure dates for major meetings that they've got planned for 2014. So we have a bit of a barbell going on in the sense of very different dynamics, short term among corporate groups and longer term among associations."
  • "In terms of overall pace, it's still positive for 2012, 2013 and 2014. The pace of growth, or the rate of growth, has actually declined a bit, and rate growth continues to be positive across all the booking periods. So I would say that there is a bit of a mixed picture here, and but the key drivers that we're looking at are this segregation of prebooking in the winter period, but also looking at rate progression that remains positive across all the period."
  • [Margin impact]  "We continue to experience some challenges in some of our international markets, which contributed about 50 basis points. We have overall lighter food and beverage than expected, particularly in the high margin banquet revenues."
  • "RevPAR performance is expected to be weaker in China given the political changes. In addition, Beijing has seen a drop in corporate business which has been postponed until after the elections. We've seen a tightening of government spending, particularly in the south of China. Once the election is over, we anticipate corporate demand will return to more normalized levels."
  • "India RevPAR was also weak due to additional supply and the decrease in demand as a result of slowing economic growth. Most markets are not expected to see a rate increase as a result of the increased supply, near term, such as Mumbai and Delhi."
  • "Two-thirds of the realignment cost is related to severance and personnel expense, and one-third is owing to professional fees. The expectation is that minimal impact in the fourth quarter from the realignment cost perspective, and there are no realignment costs in 2013 as we perceive now... With respect to – and so therefore a lot of the run rate expense which is about half of the $15 million that we
    described this year relates to personnel and staffing issues. With respect to the remainder, there are other thirdparty contractual – we underwent a third-party contractual review around the world. We looked at professional  fees and expenses. We also recognized that under the old organizational structure we had a number of open positions embedded in our SG&A estimate that would no longer apply by virtue of the changes that we made structurally"
  • "In terms of our pipeline, we about 75% of our total pipeline is outside the U.S., and virtually all of that is for managed properties and within the U.S. it's a mix of management and franchise but more franchise than managed and mostly and more of Select Service than full service in North America at least."
  • "Since we do have a large portfolio of Select Service properties, we will continue to look at different ways in which we can utilize that asset base through sales or in some cases JV. So, we contributed I think it was eight hotels to a JV with Noble last year, or possibly the year before"
  • "We will continue to pursue transactions for both full service and Select Service properties, but on the Select Service side, we've been highly focused on trying to find new and different ways to expand our ownership and end up with good owners long-term for our properties."