Hyatt Reports Third Quarter 2022 Results

Total Fee Revenue Exceeds 2019 by 50%; Raises Full Year Outlook for RevPAR and Net Rooms Growth

Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H) today reported third quarter 2022 financial results. Highlights include:

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• Net income was $28 million in the third quarter of 2022 compared to net income of $120 million in the third quarter of 2021. Adjusted net income was $72 million in the third quarter of 2022 compared to Adjusted net income of $241 million in the third quarter of 2021.
• Diluted EPS was $0.25 in the third quarter of 2022 compared to $1.15 in the third quarter of 2021. Adjusted Diluted EPS was $0.64 in the third quarter of 2022 compared to $2.31 in the third quarter of 2021.
• Adjusted EBITDA was $252 million in the third quarter of 2022 compared to $110 million in the third quarter of 2021. Apple Leisure Group ("ALG") contributed $78 million of Adjusted EBITDA in the third quarter of 2022.
  • Adjusted EBITDA does not include ALG's Net Deferrals of $17 million and Net Financed Contracts of $26 million in the third quarter of 2022.
• Comparable system-wide RevPAR increased 45.9% to $133.31 and comparable U.S. hotel RevPAR increased 35.6% to $147.70 in the third quarter of 2022 compared to the third quarter of 2021.
• Comparable owned and leased hotels RevPAR increased 47.4% to $177.24 in the third quarter of 2022 compared to the third quarter of 2021. Comparable owned and leased hotels operating margin improved to 24.1% in the third quarter of 2022.
• All-inclusive Net Package RevPAR was $176.61 and all-inclusive Average Daily Rate was $243.75 in the third quarter of 2022.
• Net Rooms Growth was 18.7%, or 4.5% when excluding ALG, in the third quarter of 2022.
• Pipeline of executed management or franchise contracts was approximately 114,000 rooms, inclusive of ALG's pipeline contribution of 8,000 rooms.
• Share Repurchase activity in the third quarter of 2022 was approximately 1.87 million shares repurchased for $162 million.

Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt, said, "We had a tremendous quarter that demonstrates our unique positioning and differentiated model. We reported total fee revenue that exceeded 2019 by 50%, raised our full year 2022 Net Rooms Growth outlook to approximately 6.5%, and expanded our pipeline to 114,000 rooms. Our greater mix of fee based earnings is driving record results and significant free cash flow. We continue to see demand accelerating and our outlook remains optimistic based on our latest booking trends."

Operational Update

Comparable system-wide RevPAR increased 2.0% in the third quarter compared to the same period in 2019 driven by an increase in average rate of 13.6%. In the month of September, comparable system-wide RevPAR increased 3.1% compared to 2019 reflecting an improved contribution from group and business transient revenue.

The ALG all-inclusive portfolio continues to experience favorable trends. Net package RevPAR for the same set of properties managed by ALG in the Americas increased 29% in the third quarter compared to the same period in 2019. Total Net Package Revenue for all ALG properties increased 91% in the third quarter compared to 2019 reflecting the impact of net rooms growth fueled by ALG's organic growth in the Americas and significant expansion into Europe.

Segment Results and Highlights

• Owned and leased hotels segment: Comparable operating margins improved to 24.1%, reflecting strong operational execution and growth in average daily rates. Owned and leased hotels Adjusted EBITDA increased $19 million, or 41%, when adjusted for the net impact of transactions, in the third quarter compared to the same period in 2019.
• Americas management and franchising segment: Results were led by the continued strength in leisure demand, strong group recovery, and improved business transient demand. New hotels added to the system since the start of 2019 contributed $16 million in fee revenue.
• ASPAC management and franchising segment: Results reflect lower demand in Greater China while the remainder of the region improved from the easing or elimination of travel restrictions.
• EAME/SW Asia management and franchising segment: Results were led by Western Europe which benefited from strong international inbound demand and India which benefited from strong domestic demand.
• Apple Leisure Group segment: Results were led by the continued strength of leisure travel demand, favorable pricing, and airlift that remains above 2019 levels for key Americas destinations.

Openings and Development

During the third quarter, 22 new hotels (or 4,243 rooms) joined Hyatt's system. Notable openings included Dreams Cozumel, Hyatt Regency Lisbon, Park Hyatt Jakarta, Thompson Madrid, and Unbound Magma Resort Santorini.

As of September 30, 2022, the Company had a pipeline of executed management or franchise contracts for approximately 550 hotels (approximately 114,000 rooms), inclusive of ALG's pipeline contribution of approximately 20 hotels (or approximately 8,000 rooms).

Transactions and Capital Strategy

On October 1, 2022, the Company sold the entity that was the operating lessee of the Hyatt Regency Mainz in Germany for a nominal amount to an unrelated third party and entered into a long-term franchise agreement. On October 5, 2022, the Company sold Hyatt Regency Greenwich in Connecticut for approximately $40 million to an unrelated third party and entered into a long-term management agreement.

The Company intends to successfully execute plans to sell $2.0 billion of real estate, net of acquisitions, by the end of 2024 as part of its expanded asset-disposition commitment announced in August 2021. As of November 3, 2022, the Company has realized $721 million of proceeds from the net disposition of owned assets as part of this commitment.

Balance Sheet and Liquidity

As of September 30, 2022, the Company reported the following:

• Total debt of $3,804 million.
• Pro rata share of unconsolidated hospitality venture debt of $582 million, substantially all of which is non-recourse to Hyatt and a portion of which Hyatt guarantees pursuant to separate agreements.
• Total liquidity of approximately $2.9 billion with $1,374 million of cash and cash equivalents and short-term investments, and borrowing availability of $1,496 million under Hyatt's revolving credit facility, net of letters of credit outstanding.
  • Total liquidity excludes approximately $300 million of restricted cash to redeem floating rate senior notes.

On October 1, 2022, the Company redeemed its floating rate senior notes due 2023 for approximately $302 million, inclusive of $300 million aggregate principal and $2 million of accrued interest, using restricted cash. On October 28, 2022, the Company redeemed its 3.375% senior notes due 2023 for approximately $353 million, inclusive of $350 million aggregate principal and $3 million of accrued interest, using available cash and cash equivalents. As a result of these transactions, the total outstanding principal on the Company's senior notes was $3,135 million as of October 31, 2022.

During the third quarter, the Company repurchased a total of 1,865,489 Class A common shares for approximately $162 million. The Company ended the third quarter with 48,412,428 Class A and 59,017,749 Class B shares issued and outstanding. From October 1 through October 31, 2022, the Company repurchased 327,556 shares of Class A common stock for an aggregate purchase price of approximately $27 million. Through the first ten months of the year, the Company has repurchased approximately $290 million of Class A common shares. As of October 31, 2022, the Company had approximately $638 million remaining under its share repurchase authorization.

2022 Outlook

The Company is providing the following guidance for full year 2022:

Conference Call Information

The Company will hold an investor conference call this morning, November 3, 2022, at 8:00 a.m. CT.

Participants are encouraged to listen to a simultaneous webcast of the conference call, which may be accessed through the Company’s website at investors.hyatt.com. Alternatively, participants may access the live call by dialing: 888-412-4131 (U.S. Toll-Free) or 646-960-0134 (International Toll Number) using conference ID# 9019679 approximately 15 minutes prior to the scheduled start time.

A replay of the call will be available for one week beginning on Thursday, November 3, 2022 at 11:00 a.m. CT by dialing: 800-770-2030 (U.S. Toll-Free) or 647-362-9199 (International Toll Number) using conference ID# 9019679. An archive of the webcast will be available on the Company’s website for 90 days.

Forward-Looking Statements

Forward-Looking Statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about our plans, strategies, outlook, occupancy, the impact of the COVID-19 pandemic and pace of recovery, the amount by which the Company intends to reduce its real estate asset base and the anticipated timeframe for such asset dispositions, the number of properties we expect to open in the future, booking trends, RevPAR trends, our expected Adjusted SG&A expense, our expected capital expenditures, our expected net rooms growth, financial performance, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: risks associated with the acquisition of Apple Leisure Group, including successful integration of the Apple Leisure Group business; the duration and severity of the COVID-19 pandemic or any additional resurgence and the pace of recovery following the pandemic or any additional resurgence; the short and long-term effects of the COVID-19 pandemic, including on the demand for travel, transient and group business, and levels of consumer confidence; the impact of actions taken by governments, businesses, or individuals in response to the COVID-19 pandemic or any additional resurgence on global and regional economies, travel limitations or bans, and economic activity; the ability of third-party owners, franchisees, or hospitality venture partners to successfully navigate the impacts of the COVID-19 pandemic or any additional resurgence; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and the pace of economic recovery following economic downturns; global supply chain constraints and interruptions, rising costs of construction-related labor and materials, and increases in costs due to inflation or other factors that may not be fully offset by increases in revenues in our business; risks affecting the luxury, resort, and all-inclusive lodging segments; levels of spending in business, leisure, and group segments as well as consumer confidence; declines in occupancy and average daily rate; limited visibility with respect to future bookings; loss of key personnel; domestic and international political and geo-political conditions, including political or civil unrest or changes in trade policy; hostilities, or fear of hostilities, including future terrorist attacks, that affect travel; travel-related accidents; natural or man-made disasters such as earthquakes, tsunamis, tornadoes, hurricanes, floods, wildfires, oil spills, nuclear incidents, and global outbreaks of pandemics or contagious diseases, or fear of such outbreaks; our ability to successfully achieve certain levels of operating profits at hotels that have performance tests or guarantees in favor of our third-party owners; the impact of hotel renovations and redevelopments; risks associated with our capital allocation plans, share repurchase program, and dividend payments, including a reduction in, or elimination or suspension of, repurchase activity or dividend payments; the seasonal and cyclical nature of the real estate and hospitality businesses; changes in distribution arrangements, such as through internet travel intermediaries; changes in the tastes and preferences of our customers; relationships with colleagues and labor unions and changes in labor laws; the financial condition of, and our relationships with, third-party property owners, franchisees, and hospitality venture partners; the possible inability of third-party owners, franchisees, or development partners to access capital necessary to fund current operations or implement our plans for growth; risks associated with potential acquisitions and dispositions and the introduction of new brand concepts; the timing of acquisitions and dispositions and our ability to successfully integrate completed acquisitions with existing operations; failure to successfully complete proposed transactions (including the failure to satisfy closing conditions or obtain required approvals); our ability to successfully execute on our strategy to expand our management and franchising business while at the same time reducing our real estate asset base within targeted timeframes and at expected values; declines in the value of our real estate assets; unforeseen terminations of our management or franchise agreements; changes in federal, state, local, or foreign tax law; increases in interest rates, wages, and other operating costs; foreign exchange rate fluctuations or currency restructurings; lack of acceptance of new brands or innovation; general volatility of the capital markets and our ability to access such markets; changes in the competitive environment in our industry, including as a result of the COVID-19 pandemic, industry consolidation, and the markets where we operate; our ability to successfully grow the World of Hyatt loyalty program and Unlimited Vacation Club paid membership program; cyber incidents and information technology failures; outcomes of legal or administrative proceedings; violations of regulations or laws related to our franchising business; and other risks discussed in the Company's filings with the SEC, including our annual report on Form 10-K, which filings are available from the SEC. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Non-GAAP Financial Measures

The Company refers to certain financial measures that are not recognized under U.S. generally accepted accounting principles (GAAP) in this press release, including: Adjusted Net Income (Loss); Adjusted Diluted EPS; Adjusted EBITDA; Adjusted EBITDA Margin; and Adjusted SG&A Expenses. See the schedules to this earnings release, including the "Definitions" section, for additional information and reconciliations of such non-GAAP financial measures.

Availability of Information on Hyatt's Website and Social Media Channels

Investors and others should note that Hyatt routinely announces material information to investors and the marketplace using U.S. Securities and Exchange Commission (SEC) filings, press releases, public conference calls, webcasts and the Hyatt Investor Relations website. The Company uses these channels as well as social media channels (e.g., the Hyatt Facebook account (facebook.com/hyatt); the Hyatt Instagram account (instagram.com/hyatt/); the Hyatt Twitter account (twitter.com/hyatt); the Hyatt LinkedIn account (linkedin.com/company/hyatt/); and the Hyatt YouTube account (youtube.com/user/hyatt)) as a means of disclosing information about the Company's business to our guests, customers, colleagues, investors, and the public. While not all of the information that the Company posts to the Hyatt Investor Relations website or on the Company's social media channels is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Hyatt to review the information that it shares at the Investor Relations link located at the bottom of the page on hyatt.com and on the Company's social media channels. Users may automatically receive email alerts and other information about the Company when enrolling an email address by visiting "Sign up for Email Alerts" in the "Investor Resources" section of Hyatt's website at investors.hyatt.com. The contents of these websites are not incorporated by reference into this press release or any report or document Hyatt files with the SEC, and any references to the websites are intended to be inactive textual references only.

About Hyatt Hotels Corporation

Hyatt Hotels Corporation, headquartered in Chicago, is a leading global hospitality company guided by its purpose – to care for people so they can be their best. As of September 30, 2022, the Company’s portfolio included more than 1,200 hotels and all-inclusive properties in 72 countries across six continents. The Company's offering includes brands in the Timeless Collection, including Park Hyatt®, Grand Hyatt®, Hyatt Regency®, Hyatt®, Hyatt Residence Club®, Hyatt Place®, Hyatt House®, and UrCove; the Boundless Collection, including Miraval®, Alila®, Andaz®, Thompson Hotels®, Hyatt Centric®, and Caption by Hyatt; the Independent Collection, including The Unbound Collection by Hyatt®, Destination by Hyatt™, and JdV by Hyatt™; and the Inclusive Collection, including Hyatt Ziva®, Hyatt Zilara®, Zoëtry® Wellness & Spa Resorts, Secrets® Resorts & Spas, Breathless Resorts & Spas®, Dreams® Resorts & Spas, Vivid Hotels & Resorts®, Alua Hotels & Resorts®, and Sunscape® Resorts & Spas. Subsidiaries of the Company operate the World of Hyatt® loyalty program, ALG Vacations®, Unlimited Vacation Club®, Amstar DMC destination management services, and Trisept Solutions® technology services. For more information, please visit www.hyatt.com.

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