In this note we've provided some forward looking commentary from Hyatt's Q4 earnings release and conference call in preparation for their Q1 earnings release on Thursday.
TRENDS & GUIDANCE:
- "At present, there are mixed economic signals in the U.S. As to international operations, we are seeing some relative improvements in selected markets, especially in emerging markets such as China where economic stimulus from the government has created support for commercial activity. In general, occupancies on the transient side have shown some signs of improvement over the last few months, but rates are still under pressure."
- "On a year-over-year comparative basis, cancellations in group business have slowed and we saw a sequential reduction in the rate of decline in group bookings during the final months of 2009. These trends continued into 2010."
- "Since any recovery in our industry is widely expected to be occupancy driven at first, and because we do expect to see some cost increases in 2010, including increased wages, we expect that margins will be under pressure in 2010 even as we focus on additional productivity gains."
- "More recently the rate of decline in RevPAR for select-service properties has narrowed significantly compared to prior periods."
- "We expect compensation expense to increase as we face some wage inflation in 2010."
- "We plan to spend 270 to 290 million on CapEx in 2010, which is about 30% more than last year. This includes, roughly, four to 5% of owned hotel revenues on maintenance CapEx. We are starting major renovations projects at the Grand Hyatt New York and the Grand Hyatt San Francisco. Both of these projects will begin over the summer and continue into the third quarter of 2011. We anticipate that there will be disruption to business and estimate we’ll have about 400 rooms, on average, out of service per day in the second half of the year. We’ve got three other hotels, in essence largely the Park hotel in Chicago, the Hyatt Regency in Atlanta, and the Hyatt Regency in San Antonio, where we’re undertaking projects in 2010."
- "We expect the tax rate on our U.S. income to be approximately 38% and the blended tax rate on our international income to be approximately 20%. In addition, we have certain fixed tax charges each year which we believe will approximate 2,911."
- "One point of global RevPAR change equates to between 10 to 20 million of adjusted EBITDA for the company."
- Potential acquisitions: "business transient hotels or hotels that principally serve business transients guests."
- "The transaction volume for what I would say typical whole asset sales has not really been significant and not been growing significantly."
- "While overall group revenue on the books for 2010 is below 2009, the decline has been lessening since about October of 2009. In the last four months we have booked something in the range of a third more group revenue for 2010 than the same period in the prior year."