Global hospitality company Hyatt Hotels Co. (NYSE: H) shares are surging to all-time highs riding the travel boom, with shares trading up 21% year-to-date (YTD). Hyatt operates over 1,300 hotels and properties in 77 countries. Their hotels and resorts range from all-inclusive vacation resorts to full-service, luxury and upscale brands like Park Hyatt and the Unbound Collection. While not as massive as Marriott International Inc. (NASDAQ: MAR), Hilton Worldwide Holdings Inc. (NYSE: HLT), and InterContinental Hotels Group PLC (NYSE: IHG), Hyatt is an asset-light nimble operator in the consumer discretionary sector.
Big Plans for Growth
While business is strong from the continued travel boom, the growth prospects have investors and analysts salivating. The company announced in January 2024 that 2023 was a record year for deal signings. It's built up the pipeline of new rooms worldwide to 127,000, which is nearly 40% of its existing rooms.
Portfolio of Brands
Grand Hyatt and Hyatt Regency brands are popular with business travelers and cater to a large convention business. These hotels provide extensive amenities and convenient locations with business and meeting amenities. Hyatt House offers extended-stay hotels and apartment-style suites. Park Hyatt is its luxury accommodations found in prime city locations with world-class amenities.
Its Unbound Collection features independent hotels with a strong sense of place that appeal to sophisticated travelers looking for authentic cultural experiences. SLH is an independent collection of boutique hotels characterized by their intimate settings and personalized service, serving high-end leisure travelers.
Strong Close to 2023
Hyatt Hotels reported Q4 2023 EPS of 64 cents, beating analyst expectations of 38 cents by 26 cents. Revenues were $1.66 billion, beating the $1.61 billion consensus analyst estimates. Adjusted EBITDA was $241 million and $1.03 billion for the full year 2023, which exceeded its previous full-year outlook.
Comparable system-wide Revenue Per Available Room (RevPAR) rose 9.1% YoY in Q4 2023 and 17% for the full year 2023. Full-year net room growth was 5.9% YoY. The company ended the year with $3.05 billion in total debt and total liquidity of $2.4 billion with $896 million in cash and cash equivalents. Check out the sector heatmap on MarketBeat.
Revenues Growth by Segment
In Q4 2023, a record number of management, franchise, license and other fees of $256 million was generated. The company bought back 4.1 million Class A common shares for $453 million in the full year 2023. Its Owned and Lease Hotels segment generated $90 million, with growth driven by the return of group demand and increased rate growth, with operating margins growing 240 bps YoY.
The Americas Manage and Franchise segment had the highest revenues driven by improved group and business results with resilient leisure travel demand. Apple Leisure Group, which it acquired in 2022 to expand its all-inclusive resorts portfolio, saw adjusted EBITDA rise 33% YoY.
Property Transactions
Hyatt Hotels saw 29 new hotels, including 9,648 rooms, join the portfolio in the quarter. A total of 101 new hotels with 23,965 rooms joined Hyatt's portfolio in the full year 2023. As of December 31, 2023, Hyatt Hotels had a pipeline of executed management or franchise contracts for nearly 650 hotels with 127,000 rooms. The company sold Hyatt Regency Aruba Report and Casino for $230 million and entered into a long-term management deal. The company plans to sell $2 billion of real estate, net of acquisitions, in 2024. Get AI-powered insights on MarketBeat.
2024 Forecasts
Hyatt Hotels expects full year 2024 RevPAR growth of 3% to 5%. Net room growth is expected to be between 5.5% to 6% YoY. Net income is expected to be around $560 million. Management, Franchise, License and Other Fees are expected between $1.1 billion to $1.13 billion. Capex is expected around $170 million. Free cash flow is expected to be between $625 million and $674 million.
Hyatt Hotels CEO Mark Hoplamazian commented, "The fourth quarter marks the completion of a transformative year and demonstrates the progress towards our strategic vision and earnings evolution. RevPAR growth exceeded the high end of our guidance range, and we had industry-leading net room growth for the seventh consecutive year. This led to a record level of fees and the highest free cash flow in Hyatt's history. We returned $500 million to our shareholders and achieved an asset-light earnings mix of approximately 76% for the full year, a testament to the successful execution of our strategy."
Hyatt Hotels analyst ratings and price targets are at MarketBeat. Hyatt Hotel's peers and competitor stocks can be found with the MarketBeat stock screener.
Daily Ascending Triangle Breakout
The daily candlestick chart for H illustrates an ascending triangle breakout pattern. The ascending trendline comprised of higher lows commencing at $124.28 on January 16, 2024. The flat-top upper trendline resistance was at $133.69. Just when it appeared a breakout was imminent, HLT fell under the ascending trendline on a price gap down on February 13, 2024. However, shares were able to stage a rally into earnings. This resulted in a sharp breakout that has continued to push shares higher 6 consecutive days to new all-time highs of $158.31. Pullback support levels are at $149.22, $136.70, $131.15 and $112.86.
Formed on January 18, 2024, as the daily relative strength index (RSI) surged through the 80-band. The full-year 2023 business update on January 24, 2024, further propelled MAR shares to gap to all-time highs of $243.53 before a pullback set in. Pullback support levels are at $228.94, $223.07, $214.35 and $208.43.