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Key takeaways were better group bookings and a much improved asset transactions market.

"In the third quarter, positive demand trends in the U.S., among both transient and group guests, were accompanied by challenges in certain international markets, including China and India. We continue to be focused on growing fees and increasing margins while pursuing additional growth opportunities." 

- Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation


  • Pace of openings has accelerated this year. 
  • Andaz Maui: first new resort on Maui in over a decade. The property also has villas which will be sold to buyers over time. 2 of the 12 villas are already under contract. Expect that the resort will ramp up over the next year or 2.
  • Hyatt Regency Orlando: largest single property acquisition in the company's history. It's adjacent to the convention center, which is the second largest convention center in the country.  Years ago they purchased 40 acres of land adjacent to the convention center but never developed the land because of construction costs rising.  Feel like they can add value by adding smaller corporate groups and transient travel through their system.  They are already doing that.  They feel like they have turned away plenty of Orlando group business to make them confident that they can fill this hotel.
    • $10MM of EBITDA in the 4Q of 2013.  Historically this hotel earns 2/3rd of its EBITDA in the first half of the year
    • Acquired for below replacement cost
  • Made a significant investment in Playa hotels during the 3rd Q. Expect to earn between $18-20MM of EBITDA from this JV in 2014
  • M&A: Over the last 6 months they accelerated their asset disposal activity. Sold for an average of 5% on trailing NOI. They don't have any hotels listed by brokers but do expect to sell additional hotels over then next year and are in discussions with various interested parties.
  • Didn't purchase a lot of stock in 3Q because of transaction activity
  • Benefits from strong RevPAR growth in San Fran and Maui and completed renovation in San Diego 
  • Group revenue benefited from strength in Atlanta and Anaheim
  • China RevPAR declined 3.5%
  • UK had a 15% RevPAR decline, excluding this market RevPAR would have been up 5% in this region EMEA/SW. Asia
  • ME was strong
  • Overall EBITDA was negatively impacted by: 1) transaction activity by a net $5MM and also negatively impacted unconsolidated JV EBITDA by $2MM; 2) Maui ramp up/pre-opening costs were $3MM 3) lower incentive fees
  • Lease termination fee benefited NA owned and leased margins y 50bps but was offset by higher rent/property expenses which negatively impacted NA margins by 80bps
  • Converted 4 hotels in France this year but higher unexpected wage and benefit costs negatively impacted them
  • Margin growth is likely to be modest due to higher property taxes and rent expense costs and will ease in 2Q14
  • Group production increased 9% in the quarter. Group pace for 2014 is now up in the low single digit range. 


  • Really pleased in RevPAR trends in the Q and results were good when you take into account the $10MM impact. Americas performance was positive. SG&A was well managed. Pre-opening at Wailea was much higher than they expected.
  • Incentive management fees for the French hotels was lower than expected
  • Rent expense and property taxes were higher than they expected
  • Had an $8MM gain in relation to the gain from sales of residences in Maui 
  • Disruptive activities in Grand Hyatt HK and 4 French hotels
  • Atlanta: cautioned about challenging prospective results over the coming year. Still believe that due to the calender, 2014 will be challenging in Atlanta.  This quarter was very good though. 
  • Hawaii, Dallas and San Fran were particularly strong in the Q.
  • Don't see a major impact from the government shutdown in 4Q.  It's in the low million range so far.
  • Group business update: 
    • Group pace is up in the low single digit
    • 60% is on the books in 2014 today
    • Production in the Q for the Q was also strong
    • Feel better about group than a Q ago
  • Southern China was quite strong but North and Eastern China were quite challenged due to continuing effects of the austerity program. Feel like the austerity state is the new normal in China.
  • India - the market is quite disrupted. Rupee is under a lot of pressure - but benefited them bc more Indians stayed in the country. Feel like conditions are starting stabilize though.
  • Cash $800MM - excluding $400MM of restricted cash tied to hotels for sale through 1031 exchanges
  • Expect to continue to fund any buybacks with cash 
  • Sold: 6 full service hotels for about 15x TTM EBITDA. transaction activity should be neutral in 4Q, except with the addition of Peabody Orlando.
  • Unconsolidated JV EBITDA. Waikiki will continue to be a drag for the next few Qs
  • Playa Resorts:What kind of EBITDA do they expect? Expect to add 6 hotels from the Playa portfolio (out of 13) or 3,000 rooms to their managed portfolio. $18-20MM of EBITDA for next year. They did not recognize any EBITDA from Playa this Q due to some lag accounting. Expect $4-5MM to come through in the 4Q.  They also have renovations for the properties that have yet to be converted. 3Q is seasonally the weakest.
  • Peabody will not impact RevPAR since its not comparable - not until 2015. They did not draw on the revolver
  • Hyatt Regency New Orleans: No impact from the redemption of their preferred interest in that property. It was not in EBITDA as it was in the Other Income line.
  • Development expenses for new hotels are all included in SG&A
  • Don't see any unusual maintenance capex for 2014. 
  • They had over $800MM of cash plus received another $90MM from the redemption of their preferred interest
  • Guidance? They have been adding to clarity and detail in their disclosures. They have also been working on laying out how the company is expected to grow and evolve for Investor Day 2014.
  • Group business: Total production in the Q was strong - not just for in the Q for the Q production. Production for 2015 and further out association basis was stronger. The quarter was more driven by corporate vs. group business
  • Select service performance has really been superb. Relative to the US segment they are performing well. They look at market share as well within their markets. They are for the first time entering urban markets - big change for them. Up until now they have had no urban hotels. These new Urban openings are doing great.  That will also start to enhance the brand and enhance the absolute RevPAR levels (i.e. they will be a lot higher).
  • Overall M&A outlook:  Activity is up significantly. More capital chasing hotels. There is also a lot of momentum in performance in various markets. It will continue to be an attractive time for PE to be buying assets.
  • Still see plenty of opportunity to expand their presence in gateway cities and recycle repositioned assets as well as legacy assets
  • Park Hyatt is still supposed to open on time and on budget next year
  • Will continue to manage their buyback program in the same fashion that they have in the past. No comment on levels. 


  • Eleven hotels were opened. As of September 30, 2013, the Company's executed contract base consisted of approximately 215 hotels or approximately 50,000 rooms. . Our current base of executed contracts for new hotels is the largest it has ever been and represents approximately 40% of our current system size.
  • The Company repurchased 702,502 shares of common stock at a weighted average price of $41.28 per share, for an aggregate purchase price of approximately $29 million.  On October 29, 2013, the Company's Board of Directors authorized the repurchase of up to an additional $200 million of common stock.
  • "We have made significant investments in 2013 to position the Company for growth, including an investment in Playa Hotels & Resorts which will enable us to enter the rapidly growing all-inclusive resort segment and to debut two newly created brands, Hyatt Ziva and Hyatt Zilara. We expect to open the first two franchised resorts by year-end and anticipate that our investment in Playa and our entry into this segment will provide us with a compelling platform for growth."
  • Adjusted selling, general, and administrative expenses decreased 2.9% in the third quarter of 2013
  • M&A in 3Q:

    • Sold Andaz Napa (141 rooms) and Andaz Savannah (151 rooms) for an aggregate amount of approximately $115 million.
    • Sold Hyatt Regency Santa Clara (501 rooms) for approximately $93 million. The total sale price may increase to $100 million if certain performance thresholds are met.
    • Sold Hyatt Regency Denver Tech Center (451 rooms) for approximately $60 million.
    • Entered the all-inclusive resort segment by investing $325 million in a joint venture.
    • An unconsolidated hospitality venture sold the Hyatt Regency Waikiki. The Company received approximately $6 million for its equity interest and received a full repayment of a $277 million note receivable which matured in July 2013. The Company continues to manage the hotel under a long-term agreement.
  • Subsequent M&A
    • Completed the acquisition of The Peabody Orlando for approximately $717 million in cash and rebranded the hotel as Hyatt Regency Orlando.
    • Received approximately $89 million in cash related to its investment in Hyatt Regency New Orleans, of which approximately $63 million reflects a return of capital and approximately $26 million reflects a preferred return. The Company continues to manage, and also retains a residual interest in, the hotel.
  • 2013 Guidance update:
    • Adjusted SG&A: $310MM
    • Capex: $250MM (including $80MM of investment in new properties)
    • Investment spending: $1.2BN
    • D&A: $340MM
    • Interest expense: $70MM
    • Hotel openings: 45


  • Owned and leased Adjusted EBITDA increased 1.0% in the third quarter of 2013 compared to the same period in 2012 and was negatively impacted by approximately $5 million of portfolio changes related to dispositions, acquisitions and openings.
  • Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA decreased 27.8% in the third quarter of 2013 compared to the same period in 2012. The decrease was primarily due to portfolio changes related to openings and dispositions, including approximately $2 million related to the net impact of portfolio changes since the third quarter of 2012 and approximately $3 million related to pre-opening expenses and operating ramp-up at Andaz Maui at Wailea.
  • Comparable hotel revenue increased 5.8% in the third quarter of 2013 compared to the same period in 2012. Comparable hotel expenses increased 5.5% in the third quarter of 2013
  • Comparable owned and leased hotel operating margins in the Americas were negatively impacted by higher benefit costs, rent increases at two hotels and higher property taxes partially offset by a non-recurring lease termination fee.  Comparable owned and leased hotel operating margins in ASPAC and EAME/SW Asia were negatively impacted by weaker market conditions in Seoul and a difficult comparison in London due to the Summer Olympics last year.


  • Base management fees increased 10.8%.... primarily due to strong RevPAR performance in the Americas and newly converted hotels in EAME/SW Asia. 
  • Incentive management fees increased 11.1%... primarily driven by the contribution of newly converted hotels in EAME/SW Asia. Incentive management fees from newly converted hotels in EAME/SW Asia were approximately $3 million in the third quarter of 2013, which was below the Company's expectations. 
  • Franchise fees and other revenue increased 23.1%.... primarily due to new hotels and hotels recently converted from managed to franchised.
  • Group rooms revenue at comparable U.S. full service hotels increased 6.9%. Group room nights increased 3.8% and group ADR increased 3.0% in the third quarter of 2013
  • Transient rooms revenue at comparable U.S. full service hotels increased 8.7%. Transient room nights increased 4.4% and transient ADR increased 4.2%
  • ASPAC RevPAR was negatively impacted by weaker demand coupled with increased supply in China and revenue from management and franchise fees decreased 10.5%, while EBITDA for the segment remained flat
  • EMEA/SW Asia RevPAR was negatively impacted by lower demand levels in London.  Revenue from management and franchise fees increased 35.7%... primarily due to newly converted hotels. Adjusted EBITDA increased 120%