Hyatt Hotels Corp. Q2 FY2025 earnings call

• Acquired Playa Hotels & Resorts on June 17, with plans to sell the Playa Real Estate portfolio for $2 billion, entering into 50-year management agreements for 13 of 15 resorts and expecting accretive results for shareholders in the first full year.
• Reported system-wide RevPAR growth of 1.6%, with luxury brands performing strongly. Leisure transient RevPAR up 2.6%, all-inclusive net package RevPAR up 6% in Americas.
• Achieved net rooms growth of 11.8% during the quarter, including ~2,600 rooms from the Playa acquisition, raising full-year net rooms growth outlook to 6.7%-7.7%.
• Ended the quarter with a pipeline of ~140,000 rooms, an 8% increase over last year, with signings up over 30% compared to Q2 2024.
• Introduced new brand Unscripted by Hyatt to fill a white space in the portfolio, expected to scale rapidly through conversions.

System-wide RevPAR grew 1.6% for the quarter, or 2.2% when adjusting for the shift of Easter from the first quarter in 2024 to the second quarter in 2025. RevPAR growth was strongest among luxury brands. Leisure transient RevPAR was up 2.6% year-over-year, with luxury brands up approximately 6%. All-inclusive net package RevPAR increased 6% in the Americas. Business transient RevPAR was flat, with the U.S. declining by 1.5% due to select service hotels. Gross fees in the quarter were $301 million, up 9.5%. Owned and leased segment adjusted EBITDA increased by 1% when adjusting for the net impact of asset sales and the Playa Hotel acquisition. Distribution segment adjusted EBITDA was flat to last year, with higher pricing, effective cost management, and favorable foreign currency exchange offsetting lower booking volumes in the 4-star and below segments served by ALG Vacations.

• Full year 2025 RevPAR range 1%-3%, with balance of year growth flat to up 2%, third quarter towards lower end, fourth quarter at or above high end.
• Net rooms growth outlook 6%-7% (excluding Playa acquisition).
• Gross fees expected $1.195B-$1.215B, a 10% increase at midpoint compared to last year.
• Adjusted EBITDA expected $1.085B-$1.13B, a 9% increase at midpoint compared to last year when adjusting for asset sales.
• Adjusted free cash flow expected $450M-$500M.
• Expect to return ~$300M in 2025 in capital returns to shareholders.

• Macro-economic environment could impact results.
• Timing and success of hotel sales transactions could affect financial outcomes.
• Competition in the hospitality industry could impact market share and RevPAR.

Q: Conor Cunningham asked about the improvement expected through the remainder of the year and co-branded credit card negotiations.

A: Joan Bottarini and Mark Hoplamazian discussed third quarter headwinds like tough comps and slower group Pace, with fourth quarter expecting easier comps and better pickup on business transient side. On credit card, they stated they'll update when they have specifics.

Q: Stephen Grambling asked about hotel dispositions and The Big Beautiful Bill's impact.

A: Mark Hoplamazian said proceeds from Playa real estate sale go to pay down debt, and The Big Beautiful Bill has some impact on cash taxes via accelerated depreciation.

Q: Shaun Kelley asked about building blocks for next year.

A: Joan Bottarini and Mark Hoplamazian discussed incremental fees from Playa, credit card deal updates, organic net unit growth, and owned and leased pieces, clarifying fee and EBITDA numbers related to Playa.

Q: Michael Bellisario asked about brand acquisition integration and Playa integration.

A: Mark Hoplamazian talked about Standard Hotels integration progress, strong early results, and Playa integration timeline and distribution earnings expectations.

Q: Smedes Rose asked about Playa preferred interest and Hyatt Studio rollout.

A: Mark Hoplamazian explained preferred interest returns aren't fees, and Hyatt Studio rollout is ongoing with strong early results in Mobile.

Q: Ben Chaiken asked about additional assets and China market.

A: Mark Hoplamazian said specifics on asset disposals will be provided when closed, and in China, there's caution and conservatism due to current policies and tariffs.

Q: Patrick Scholes asked about public hotel REITs and Caribbean expectations.

A: Mark Hoplamazian was unsure on REITs, and Joan Bottarini said they're encouraged by Caribbean booking side with strong bookings.

Q: Richard Clarke asked about distribution division and Playa impact.

A: Joan Bottarini said there's opportunity to better utilize distribution from Playa hotels for 2026, but distribution declined this year due to lower chain scale performance.

Q: Duane Pfennigwerth asked about SG&A and remaining asset sale target.

A: Joan Bottarini said SG&A is managed with discipline, and Mark Hoplamazian said they'll be disciplined in asset sales with a steady stream of dispositions but no specific total target.