Hyatt Hotels Corporation (“Hyatt” or the “Company”) (NYSE: H) reported fourth quarter 2017 financial results. Net income attributable to Hyatt was $76 million, or $0.62 per diluted share, in the fourth quarter of 2017, compared to $41 million, or $0.31 per diluted share, in the fourth quarter of 2016. Net income in the fourth quarter of 2017 included a $217 million gain from the sale of Avendra, LLC, an equity method investment, and $110 million of incremental tax attributable to recent U.S. tax reform. Adjusted net income attributable to Hyatt was $29 million, or $0.23 per diluted share, in the fourth quarter of 2017, compared to $39 million, or $0.29 per diluted share, in the fourth quarter of 2016. Refer to the table on page 4 of the schedules for a summary of special items impacting Adjusted net income and Adjusted earnings per share in the three months ended December 31, 2017.
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, “We had a strong finish to the year, delivering full-year comparable RevPAR growth of 3.3% and net hotel rooms growth of 7.0%, fueled by a record-setting 71 new hotels added to our system in 2017. Double-digit growth in management and franchising fees more than offset an earnings decline in our owned and leased segment, which reflected more than $900 million in asset dispositions.”
Fourth quarter of 2017 financial results as compared to the fourth quarter of 2016 are as follows:
- Net income increased 87.4% to $76 million.
- Adjusted EBITDA increased 4.0% to $179 million, up 3.0% in constant currency.
- Comparable systemwide RevPAR increased 3.8%, including an increase of 4.1% at comparable owned and leased hotels. Excluding the benefit from the timing of the Jewish holiday, comparable systemwide RevPAR increased 3.2%, and comparable owned and leased hotels RevPAR increased 3.0%.
- Comparable U.S. hotel RevPAR increased 3.0%; full service and select service hotel RevPAR increased 2.9% and 3.2%, respectively.
- Comparable owned and leased hotels operating margin increased 150 basis points to 23.7%.
- Adjusted EBITDA margin decreased 20 basis points to 26.7%.
Fiscal year of 2017 financial results as compared to the fiscal year of 2016 are as follows:
- Net income increased 22.3% to $249 million.
- Adjusted EBITDA increased 3.9% to $816 million, up 4.0% in constant currency.
- Comparable systemwide RevPAR increased 3.3%, including an increase of 0.9% at comparable owned and leased hotels.
- Comparable U.S. hotel RevPAR increased 2.2%; full service and select service hotel RevPAR increased 2.1% and 2.4%, respectively.
- Comparable owned and leased hotels operating margin decreased 20 basis points to 24.3%.
- Adjusted EBITDA margin decreased 70 basis points to 29.5%.
- The Company opened a record 71 hotels during 2017, compared to 59 hotels in 2016.
- Net hotel and net rooms growth was 9.8% and 7.0% in 2017, respectively, compared to growth of 9.6% and 7.3%, respectively, in 2016.
- As of December 31, 2017, the Company’s pipeline consisted of approximately 330 hotels or approximately 70,000 rooms. This compared to approximately 305 hotels or approximately 66,000 rooms as of December 31, 2016.
- The Company repurchased 12,186,308 shares of common stock for $723 million in 2017, compared to 5,631,557 shares for $272 million in 2016.
Mr. Hoplamazian continued, “We believe we are well-positioned to execute our long-term growth strategy of maximizing our core business focused on high-end travelers, integrating new growth platforms and optimizing capital deployment. Plans to sell roughly $1.5 billion of real estate by the end of 2020 are underway. We remain confident that these actions will support growth in our business and further unlock shareholder value, as evidenced by our initiation of a quarterly cash dividend as well as the increase in our share repurchase authorization.”