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The Park Hyatt Paris- Vendôme is located in the city ’ s 1st arrondissement .
quotidian swings in travel demand . The farther removed from COVID the more things have become normalized . “ Last year was extraordinarily strong for leisure in particular ,” Hoplamazian noted , bristling at the notion that leisure on whole is now slacking . To put that in context , he said that the levels Hyatt achieved last year were 20 % above pre-pandemic levels , adding that the company is still maintaining that . “ We ’ re not down from last year ,” he said . “ We ’ ll have roughly the same leisure demand and leisure revenue base for the company globally this year as we did last year .”
Some leisure travel is just manifesting itself differently . The pandemic resulted in many people traveling and vacationing stateside and closer
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to home first , then shifting farther outside the borders once given the all-clear . “ A lot more Americans — and I mean a lot more — traveled to Europe this year ,” Hoplamazian said . “ Part of it was rotation — people had done the Caribbean Mexico for the last several years and said , ‘ Okay , time to branch out .’”
It ’ s partly why Hyatt ’ s performance in Europe was up 12 % in the second quarter . “ I do think that over time , you ’ ll see a more natural balancing out of where people are traveling and then you ’ ll see a resurgence of Caribbean and Mexico next year ,” he said .
Mainland China , broadly , has been a drag for Hyatt and its competitors , with Hoplamazian calling it a tale of two different dynamics . On the one hand , inbound travel there has been
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flat-out weaker , more so than anyone expected , he mentioned . Driven by a host of issues , but none higher than air lift . On the other hand , outbound travel has been very strong , he said , “ which has driven really good results for us in Japan , Korea , Vietnam and Thailand .”
Some 50 % of Hyatt ’ s total revenue in China is food and beverage , which were down close to 7 % for the first half of the year , Hoplamazian said , against rooms revenue that was up around 4 %. “ That ’ s where you might start to see a little bit of a dichotomy , because RevPAR is actually up and our fees are down ,” the result of half of Hyatt ’ s revenue being non- RevPAR driven .
DRIVING TRAFFIC One of the major takeaways
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from lodging C-corp secondquarter earnings calls was that tumult in the broader U . S . economy has had a proportional effect on travel at the lower-edges of the hotel industry , while higher-end travel is still holding up if not booming . Here , Hyatt has a bit of an edge over other hotel companies since its brands have historically skewed to the higher end — Park Hyatt , Grand Hyatt , Hyatt Regency , Andaz , to name several .
Hyatt has somewhat joined the pack with recent additions in the more affordable , valuedrive space that includes Hyatt Studios , along with its legacy Hyatt Place . Hyatt ’ s hotels in the luxury segment are up 4 %, said Bottarini , while upscale , select-service are up around 2.5 %.
“ Leisure demand is relatively assured to be vibrant through economic cycles ,” Hoplamazian said , adding that the highest correlation to leisure travel demand is the employment rate . As of August 2024 , the U . S . unemployment rate stood at 4.2 %, unchanged much from July , and 142,000 jobs were added in the month . “ When you look at the category that is coming to our luxury brands — let ’ s just say the employment levels are extremely high .”
Any torpor in leisure travel is countered by the continued comeback and growth in corporate transient and group business . For the latter segment , Hyatt ’ s RevPAR is around plus-4 % for the
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22 hotelsmag . com Oct / Nov 2024 |