Hyatt Union Square in New York is owned by Hersha Hospitality Trust and operated by Hyatt . |
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8 % in the quarter compared to the same time last year and was up 18 % in the first half of 2023 , which also saw World of Hyatt members account for approximately 22 % of room nights at ALG resorts . Hoplamazian was confident that this percentage had room to grow based on other all-inclusive resorts Hyatt ' s operated for a longer period of time , including group business .
Two important metrics in Q2 for Hyatt included global RevPAR growing 15 % in the quarter compared to the same time a year ago , and up 8 % on the 2019 Q2 level , and net rooms growth increasing to 6.9 %. Hyatt ' s pipeline of executed management or franchise contracts was approximately 119,000 rooms .
Average rates increased 5 % compared to the second quarter
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of 2022 and are 50 % higher compared to the second quarter of 2019 for the same set of comparable hotels . Occupancy increased 6.6 % compared to the same period last year . Still , occupancy has not matched 2019 levels : At 72 % in Q2 , it is 450 basis points below 2019 levels .
Hyatt said that a record level of total management , franchise , license and other fees of $ 248 million were generated in the second quarter , up 21 % compared to the second quarter of 2022 .
According to Hyatt President and CEO Mark Hoplamazian , along with concentrating on franchising and management fees , the company is refashioning itself to be more bottom-line driven and flowthrough focused . “ We expect to significantly reduce our capital
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expenditures to a run rate of approximately $ 100 million by 2025 ,” he said . “ The journey to transform our earnings profile is well underway and we are confident in our ability to execute the strategy .”
One of the other key initiatives undertaken in the second quarter was the announcement of a new brand in the upper-midscale space , a segment Hyatt previously did not operate within . Hyatt Studios , which Hoplamazian said will begin to have openings by the end of 2024 , with the fist breaking ground within the next two months , is Hyatt ' s 27th brand and an extended-stay offering conceived , Hyatt noted , through collaboration with hotel developers and “ listening closely to the needs ” of target guests . Hoplamazian said that letters of interest for more
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than 100 hotels have begun converting to sign contracts .
The brand will be all newconstruction , which in a tighter lending environment could make it dicier to grow . “ For starts in the U . S . select-service space , virtually all of that capital is coming from local banks .” Hoplamazian said . “ Pricing is relatively high ... it ' s affecting new starts . Gone are the days of free money .”
Hoplamazian went on to say that borrowing rates in Europe were more reasonable there than in the U . S ., as much as 500 basis points lower .
CONVERSION WORK As new construction gets squeezed , Hyatt and its competitors are entering a conversion growth phase — picking up assets and flipping them to their own flags . For
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September June 2023 hotelsmag . com 23 |