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“During the first quarter, transient demand increased at many of our hotels around the world. While room rates continue to be under pressure, particularly in North America, we are encouraged by year-over-year increases in occupancy in most markets. On the group side, we have begun to see greater booking activity, but we continue to have limited visibility on future business due to short-lead times and smaller-sized bookings."

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


  • "Our owned and leased hotels demonstrated margin growth during the quarter, as a result of strong operating performance, expense management, and because two properties experienced significant gains due to renovations in prior periods."
  • Expect to open more than 25 properties, across all brands in 2010
  • Owned Hotels commentary:
    • RevPAR +9.8% (8.1% ex. FX).
      • Occupancy +760 bps, -2.8% ADR (-4.4% ex. FX).
    • "Strong performance at the Company’s international owned and leased hotels contributed significantly to the revenue growth"
    • Hotel Mar Monte (197 rooms) was added to the portfolio this Q and Hyatt Regency Boston was sold for $113 million (H also retained a mgmt contract on the sale)
  • North American Management & Franchising commentary:
    • Revenue flat y-o-y, while EBITDA was up 3.3% y-o-y
    • Full Service RevPAR -2.2%
      • Occupancy +370bps, ADR -7.9%
    • Select Service RevPAR + 2.6%
      • Occupancy +870bps, -10.7% ADR
  • International Management & Franchising commentary:
    • Revenue +23.1% (16.7% ex. fx benefit) and Adjusted EBITDA +16.7% (9.1% ex. fx benefit)
    • RevPAR +18.7% (9.6% ex. fx benefits)
      • Occupancy +800 bps, ADR +3.6% (-4.3% ex. FX benefits)
  • SG&A increased by 30%, and 12% adjusting for the rabbi trust, as a result of increased bad debt expense and higher professional fees
  • 2010 Guidance:
    • Capital expenditures: $270 to $290MM, "inclusive of broad-scope renovation projects at five owned properties. The Company anticipates that renovations at these properties will cause displacement beginning in July 2010, resulting from a reduction in daily room inventory of approximately 400 rooms on average per day during the second half of 2010."
    • Depreciation and amortization: $285 to $295MM
    • Interest expense: $55 to $60MM


  • Expanding into markets that they are under penetrated is a high priority for them
  • As construction loans are difficult to come by, they are selectively helping owners by providing them with some capital in the form of key money and sliver equity
    • Will be allocating more effort to helping grow their franchise and management pipeline - through a combination of debt and equity investing
  • Increased number of new openings by 5 in 2010 (from 20 to 25) due to some conversions and accelerated time line of openings
  • Over the next 5 years they expect to enter 15 new markets, and are particularly keen on India
  • The $8MM settlement was related to a development dispute
  • Transient demand has continued to strengthen across all their segments
    • Transient revenues were up across all 3 sectors
  • Group nights sold increased 3% y-o-y
  • Over 1/3 of the owned hotel increase were due to ramp in International hotels. In particular there were 2 hotels that were ramping up in 1Q09
    • 50% of the 220 bps margin improvement was due to easy comps at 3 new hotels that were still ramping at 3 of their hotels in 1Q09
  • Expect that their costs will continue to increase in the balance of the 2010, driven by inflation
  • Management & Franchise - NA segment:
    • Transient room nights increased 9% but rates were down 7%
    • Volume of group room night sold increased, but revenues were down mid single digit due to lower rates
    • In the quarter for the quarter bookings were much higher and cancellations back to normal
  • International Mgmt & franchise
    • Asia is benefiting from ramping hotels that have opened over the last 12 months
    • Lift in business in Shanghai also helped them
  • Income taxes: expecting 38%. International blended 20%
    • Their income tax rate increased in the quarter due to timing of payments


  • Owned hotels color
    • 3 ramping assets include: Hyatt West Hollywood converted to Andaz, Grand Cypus and Vancouver asset
    • Only so much they can do to mitigate costs going forward due to occupancy driven RevPAR growth and inflation
    • 2 regions that performed very well were EMEA and Asia/ Pacific (not just for owned)
  • Internationally transient is the primarily driver of revenue growth
  • Seeing more investment opportunity then before - although they aren't the traditional buy/sell arrangements. Have various forms of ownership in assets. In terms of timing and pace, there just isn't much that has gotten done to date
  • $8MM settlement gain was included in the cost line because they treated it as a recovery in the cost of sales.
    •  Don't care how you classify it - its not recurring and its a catch up payment
  • Would consider buying bank debt. Most of the deals that they are looking at are structured deals
  • Key issue for them in growing their pipeline is the lack of financing and figuring out how to deploy capital and provide key money most efficiently to do so
  • Construction dislocation last year? 
    • Grand Cyprus and conversion of West Hollywood to Andaz.  Andaz opening in Jan 09. Grand Cyprus ran mostly in the 1H2009 - and there weren't an enormous amount of rooms in the 2Q
    • Bottom line the comp was much easier in the 1Q vs. 2Q and in the 2H they will have a drag due to renovation disruption
  • Amortization of deferred gains are $2-3MM annually for them
    • Compared to over $80MM for HOT
  • 12% increase in SG&A - 50% of which was bad debt charge driven. Balance was increased compensation and cost of being a public company. See the upward trend being maintained
  • JV Debt $517-$520MM of debt - will be in the Q they file later today
  • Group color:
    • In the year, for the year bookings have gone up dramatically.  Partly driven by people being hesitant in making longer term decisions
    • Need a real economic recover to lengthen the booking cycle
    • Transient demand has really increased and if that trends continues and available rooms contract as a result, groups may be more willing to book further out