Dive Brief:
- Hyatt Hotels posted 3% year-on-year system-wide hotel RevPAR growth in the third quarter of this year, according to a Thursday earnings report. The hotel company also reported net rooms growth of 4.3% year on year.
- Hyatt opened 16 hotels in Q3, and the hotel company’s pipeline also reached a new record of approximately 135,000 rooms, up 10% year over year, according to CEO Mark Hoplamazian.
- During Q3, Hyatt also added rooms to its portfolio and pipeline through its brand acquisition of lifestyle hotel operator Standard International, a deal that aligns with the company’s asset-light business strategy, according to Hoplamazian.
Dive Insight:
Hyatt acquired Standard International in August, assuming its 100% asset-light portfolio of management, franchise and license contracts for 22 open hotels with approximately 2,000 rooms. The deal also added more than 30 projects to Hyatt’s pipeline, which currently encompasses 690 hotels.
According to Hoplamazian, the Standard International acquisition further enhances Hyatt’s position in the lifestyle segment, which the company has recently targeted for growth.
Hyatt also expanded organically in the luxury lifestyle segment in Q3, opening three hotels in California in September: Grand Hyatt Indian Wells Resort & Villas, Hyatt Centric Delfina Santa Monica and Thompson Palm Springs.
Additionally in the third quarter, the company sold the Hyatt Regency Orlando for $1 billion, exceeding its $2 billion asset-disposition commitment announced in August 2021.
The property sale was part of Hyatt’s strategy to sell its owned hotels and reinvest the proceeds in “asset-light platforms that accelerate growth,” according to the company. Those asset-light platforms include existing brands, like Standard International, which can be easier to scale, experts told Hotel Dive in August.
“Seven years ago, we committed to permanently reducing our earnings from owned hotels, while investing in asset-light growth. The results of our transformation into an asset-light business have been highly accretive to shareholder value,” Hoplamazian said on the call.
Hyatt has returned more than $1.2 billion to shareholders through share repurchases and dividends so far this year, according to the report.
Hoplamazian attributed other “solid” results in the third quarter, including “double-digit growth in gross fees, record number of rooms in our pipeline and a record number of World of Hyatt members,” to “the strength of our asset-light business model.”
World of Hyatt membership expanded to a record 51 million members in Q3, growing 22% year over year, according to Hoplamazian.
