Hyatt Hotels Corp. experienced a pullback in demand for all-inclusive resorts in the second quarter, with CEO Mark Hoplamazian attributing this to a “return to pre-pandemic seasonality” in Mexico and the Caribbean. During Hyatt’s Q2 earnings call, CFO Joan Bottarini noted that the Inclusive Collection portfolio had a strong first quarter with double-digit net package revenue per available room (RevPAR), followed by a more modest 3% increase in the second quarter. In the Americas, the Inclusive Collection’s net package RevPAR growth for Q2 was 2%.
Looking ahead, Bottarini mentioned some temporary disruptions in the third quarter, such as early hurricanes and airline system disruptions. However, she expressed optimism for the fourth quarter, with pacing expected to increase into the festive season in the mid-single digits. Hoplamazian also highlighted the strengthening performance of the Inclusive Collection’s resorts in Europe, which have been building on strong results from the previous year.
Despite the challenges in the all-inclusive segment, Hyatt reported softening domestic leisure travel in the U.S., with leisure revenue decreasing by approximately 2% in the quarter. Hoplamazian pointed to “temporary headwinds” affecting this segment, including significant renovations at key U.S. resorts and lingering effects from last year’s wildfires in Maui. Renovation projects at properties like the Confidante Miami Beach, Hyatt Regency Scottsdale, and Hyatt Regency Indian Wells are expected to enhance the guest experience and drive future growth.
On a positive note, Hyatt saw strong performance in the group and business segments, with group revenue increasing by approximately 8% and business revenue up by 14% in the U.S. The company posted a systemwide RevPAR gain of 4.7% in the second quarter, with an average daily rate (ADR) increase of 1.1% and occupancy up by 2.4 percentage points.
In terms of financials, Hyatt reported second-quarter net income of $359 million, a significant increase from $68 million in the same period last year. Total revenue for the quarter was $1.703 billion, slightly down from $1.705 billion a year earlier.
Overall, while facing challenges in the all-inclusive and domestic leisure travel segments, Hyatt remains optimistic about future growth opportunities, particularly as renovations are completed and demand rebounds in key markets. The company’s strong performance in group and business segments, coupled with positive RevPAR gains, bodes well for its continued success in the hospitality industry.
