Hyatt Hotels Corp. Q1 FY2025 earnings call

• Achievements in Q1: Strong RevPAR and adjusted EBITDA growth, introduction of Hyatt Select brand, selected to 100 Best Companies to Work For and Great Places to Work list. • Playa transaction: Extended tender offer period until May 23, 2025; advancing sales of Playa's real estate and owned properties. • Development: Pipeline of ~138,000 rooms, 7% increase year-over-year; signed several projects including Park Hyatt Taormina, Grand Hyatt Shiwalik Hills, and Hyatt Centric in Downtown Cincinnati. • Operating results: RevPAR growth driven by business transient, group travel, and luxury brands; World of Hyatt loyalty program added over 2 million members, ending with ~56 million members. • Asset-light model benefits: Over 80% of asset-light earnings now, compared to ~40% at IPO in 2009; sensitivity of RevPAR to adjusted EBITDA improved.

System-wide RevPAR grew 5.7% for the quarter. Gross fees in the quarter were $307 million, up 16.9%. Owned and leased segment adjusted EBITDA increased by 18% when adjusted for the net impact of asset sales. Distribution segment adjusted EBITDA improved by 9.6% when excluding the impact of the UVC Transaction. In the Americas, Net Package RevPAR for all-inclusive properties was up over 4% compared to Q1 2024. In the United States, RevPAR increased 5.4%, with group and business transient segments each delivering double-digit growth. Greater China RevPAR was flat to last year but market share increased by ~1%. Asia Pacific, excluding Greater China, had RevPAR up 11.2%. Europe RevPAR grew by 8.5%.

• Adjusted full-year RevPAR outlook to 1%-3% for the balance of the year. • Net rooms growth outlook range 6%-7%. • Gross fees expected in range of $1.185 billion to $1.215 billion, a 9% increase at midpoint. • Adjusted EBITDA expected in range of $1.08 billion to $1.135 billion, a 9% increase at midpoint. • Adjusted free cash flow expected in range of $450 million to $500 million.

• Macro uncertainty affecting booking activity. • Conditions for Playa transaction completion include reaching 80% tendered percentage, antitrust clearances, and handling remaining shares if not 100% tendered. • Disruptions in fixed income markets affecting property dispositions.

Q: Give update on business units in choppy macro environment, specifically distribution, owned and leased, incentive management fees.

A: Mark discussed macro environment impacts, with luxury and upper upscale segments strong, select service BT off; Joan talked about owned segment strength and distribution discipline with slowdown in lower chain scales but FX boost.

Q: Seeing cancellations or less bookings, and group hesitancy markets/customer types.

A: Mark said association pullback vs corporate lean-forward; Joan added international markets stronger than U.S.

Q: Progress on Playa transaction, timeline.

A: Mark said expect to sign asset disposition deal, key conditions include 80% tendered, antitrust clearances.

Q: Construction cost inflation, impact on U.S. construction, pipeline under construction.

A: Mark said developers seeing up to 20% cost inflation, but ingenuity in sourcing materials; pipeline under construction ~30% in 2025.

Q: What would stop Playa deal?

A: Mark said key conditions include 80% tendered, antitrust clearances, handling remaining shares if not 100% tendered.

Q: Co-branded credit card renegotiation, terms.

A: Joan said no update today, but confident in competitive new deal due to brand portfolio, distribution, growth.

Q: All-inclusive pacing, point-of-sale change.

A: Mark said Canadian travelers boosting all-inclusive, U.S. still dominant feeder market.

Q: Dispositions this year, excluding Playa.

A: Mark said timing less predictable due to fixed income market disruptions.

Q: Real estate dispositions, seller financing, institutional interest.

A: Joan said evaluating seller financing, quality of assets matters for valuation.

Q: Short-term business transient and leisure demand, stabilization in April, upside/muted outcomes.

A: Joan said April positive, watching May/June; luxury/upper upscale outperforming select service.

Q: Ground signing momentum in China, hesitation from local developers.

A: Mark said UrCove by Hyatt pipeline strong, joint ventures with state-owned enterprises, no hesitation seen in business.

Q: RevPAR rest of year, all-inclusive Q2 Net Package RevPAR.

A: Joan said rest of year RevPAR range 0%-2%, all-inclusive Q2 Net Package RevPAR expected mid-single-digit similar to Q1.