Hyatt Reports First Quarter 2022 Results

System-wide RevPAR Surges in March, Strengthens Further in April

Over 40% of $2.0B Asset Disposition Commitment Closed or Under Contract

Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H) today reported first quarter 2022 financial results. Net loss attributable to Hyatt was $73 million, or $0.67 per diluted share, in the first quarter of 2022, compared to a net loss attributable to Hyatt of $304 million, or $2.99 per diluted share, in the first quarter of 2021. Adjusted net loss attributable to Hyatt was $36 million, or $0.33 per diluted share, in the first quarter of 2022, compared to Adjusted net loss attributable to Hyatt of $363 million, or $3.57 per diluted share, in the first quarter of 2021. Refer to the table on page 14 of the schedules for a summary of special items impacting Adjusted net loss and Adjusted losses per share for the three months ended March 31, 2022 and March 31, 2021.

“We are optimally positioned at this stage in the recovery as demonstrated by the momentum in our results this quarter,” said Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt Hotels Corporation. “Record levels of leisure demand fueled nearly 60% of our rooms revenue in the quarter with continued outperformance at our resorts and all-inclusive properties. We expect the rate of recovery to broaden and strengthen in the months ahead as evidenced by the strong pace of actualized and future bookings for business and group travel. Our outlook remains very optimistic for the remainder of the year with system-wide RevPAR in April accelerating further from March.”

First quarter 2022 financial results as compared to the first quarter 2021 are as follows:

• Net loss decreased to $73 million from a loss of $304 million.
• Adjusted EBITDA increased to $169 million from a loss of $20 million.
  • Apple Leisure Group ("ALG") contributed $56 million of Adjusted EBITDA.
  • Adjusted EBITDA does not include ALG's Net Deferrals of $24 million and Net Financed Contracts of $7 million.
• Comparable system-wide RevPAR increased 107% to $93.98 and comparable U.S. hotel RevPAR increased 126% to $104.45 in the first quarter of 2022.
• Comparable owned and leased hotels RevPAR increased 217% to $143.50 and comparable owned and leased hotels operating margin improved to 26.9% in the first quarter of 2022.
• All-inclusive Net Package RevPAR was $204.66 with an Average Daily Rate of $309.90.
• System-wide Net Rooms Growth was 18.6% in the first quarter of 2022. Excluding the acquisition of ALG, Net Rooms Growth was 5.2%.
• Pipeline of executed management or franchise contracts increased 13% to approximately 113,000 rooms. Excluding the acquisition of ALG, the pipeline increased 5% to approximately 105,000 rooms.

Mr. Hoplamazian continued, “We have made significant progress towards our new $2.0 billion asset disposition commitment we announced last year. In April of this year, we closed on the sale of three owned hotels and expect to close on the sale of a fourth hotel in the second quarter. Combined, the disposition of these four hotels results in $812 million in expected gross disposition proceeds, or over 40% of our $2.0 billion disposition target, at an implied multiple of 15.7x 2019 EBITDA, marking significant progress towards our fee-based earnings transformation.”

OPERATIONAL UPDATE

Comparable system-wide RevPAR progressed meaningfully during the first four months of the year, January was 37% below 2019 and improved to 9% below 2019 in April. The Americas and EAME/SW Asia regions exceeded 2019 RevPAR in April by 3% and 1%, respectively. System-wide average daily rate exceeded 2019 by approximately 10% in April driven by luxury brands in the Americas, which exceeded 2019 by approximately 30%.

Forward booking trends also continue to strengthen. System-wide comparable gross transient revenue booked for future periods was approximately 1% below 2019 in April or approximately 6% above 2019 when excluding Greater China. Gross group room revenue booked for stay dates in 2022 for comparable Americas Full Service Managed properties was 42% above 2019 in April.

Net Package RevPAR for ALG resorts in the Americas, in comparison with the same properties managed by ALG in the first quarter of 2019, was 12% above 2019 in April. Gross package revenue booked for ALG resorts in the Americas for future periods was more than 33% above 2019 in April for the same set of properties.

FIRST QUARTER RESULTS

First quarter of 2022 financial results as compared to the first quarter of 2021 are as follows:

Management, Franchise, and Other Fees

Total management and franchise fee revenues increased to $135 million in the first quarter of 2022 compared to $49 million reported in the first quarter of 2021 and reflected a sequential improvement from $124 million reported in the fourth quarter of 2021. Base management fees increased to $60 million, incentive management fees increased to $40 million, and franchise fees increased to $35 million during the quarter compared to the first quarter of 2021. Other fee revenues increased to $19 million during the quarter compared to the first quarter of 2021.

Americas Management and Franchising Segment

Americas management and franchising segment Adjusted EBITDA increased to $85 million in the first quarter of 2022 compared to $28 million reported in the first quarter of 2021. Results were led by increases in base management and franchise fees, with franchise fees exceeding 2019 levels by 9% on a reported basis.

Americas net rooms increased 4.0% compared to the first quarter of 2021.

Southeast Asia, Greater China, Australia, New Zealand, South Korea, Japan and Micronesia (ASPAC) Management and Franchising Segment

ASPAC management and franchising segment Adjusted EBITDA of $5 million in the first quarter of 2022 was flat compared to $5 million reported in the first quarter of 2021. Results reflect lower demand from Greater China while the remainder of the region experienced improving demand and an increase in management fees.

ASPAC net rooms increased 6.1% compared to the first quarter of 2021.

Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising Segment

EAME/SW Asia management and franchising segment Adjusted EBITDA increased to $6 million in the first quarter of 2022 compared to $0 million reported in the first quarter of 2021. Results across the region were led by increases in base and incentive management fees in the Middle East and Western Europe.

EAME/SW Asia net rooms increased 9.7% compared to the first quarter of 2021.

Apple Leisure Group Segment

ALG segment Adjusted EBITDA was $56 million in the first quarter of 2022. Adjusted EBITDA does not include ALG's Net Deferrals of $24 million and Net Financed Contracts of $7 million. Results reflect strong demand for leisure destinations in Mexico and the Caribbean, a strong level of booking activity, and favorable operating margins within the ALG Vacations business.

During the first quarter of 2022, ALG added 3 resorts (or 1,071 rooms).

Refer to the table on page 3 of the schedules for further details on revenue recognition, deferrals, and financed contracts relating to the Unlimited Vacation Club.

Owned and Leased Hotels Segment

Owned and leased hotels segment Adjusted EBITDA increased to $54 million in the first quarter of 2022 compared to $(29) million reported in the first quarter of 2021 driven by improved demand across the portfolio. Owned and leased hotels segment comparable operating margins improved to 26.9%, up 210bps from the fourth quarter 2021 as reported, reflecting strong operational execution and growth in average daily rates.

Refer to the tables starting on page 11 of the schedules for a detailed list of portfolio changes and the year-over-year net impact to total owned and leased hotels segment Adjusted EBITDA.

Corporate and Other

Corporate and other Adjusted EBITDA decreased to $(38) million in the first quarter of 2022 compared to $(24) million reported in the first quarter of 2021. The decrease to the first quarter of 2021 is driven by increases in certain selling, general, and administrative expenses, including $7 million of integration-related costs associated with the acquisition of ALG, and increases in payroll and related costs due to increased headcount.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased 16.8% inclusive of rabbi trust impacts and stock-based compensation. Adjusted selling, general, and administrative expenses increased $54 million, primarily due to the addition of ALG Adjusted selling, general, and administrative expenses which were $33 million in the first quarter of 2022.

Refer to the table on page 15 of the schedules for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.

OPENINGS AND FUTURE EXPANSION

In the first quarter of 2022, 13 new hotels (or 2,690 rooms) joined Hyatt's system.

As of March 31, 2022, the Company had a pipeline of executed management or franchise contracts for approximately 540 hotels (approximately 113,000 rooms), inclusive of ALG's pipeline contribution of approximately 30 hotels (or approximately 8,000 rooms).

TRANSACTION / CAPITAL STRATEGY

The Company intends to successfully execute plans to sell approximately $2 billion of real estate by the end of 2024 as part of its expanded asset-disposition commitment announced in August 2021.

During the three months ended March 31, 2022, the Company made progress on its asset disposition commitment by signing purchase and sale agreements for the following owned hotels which subsequently closed in April: Hyatt Regency Indian Wells Resort & Spa, Grand Hyatt San Antonio River Walk, and The Driskill. The Company sold these three assets to unrelated third parties and entered into long-term management agreements for each property. The Company also signed a purchase and sale agreement in May for The Confidante Miami Beach, which is expected to close in the second quarter.

The aggregate proceeds for these four transactions is expected to be $812 million, representing over 40% of the Company's asset disposition commitment.

SHARE REPURCHASE / DIVIDEND

There were no Class A or Class B shares repurchases or quarterly dividend payments during the first quarter of 2022. The Company ended the first quarter with 51,273,148 Class A and 59,017,749 Class B shares issued and outstanding.

2022 OUTLOOK

The Company is revising the following information for the 2022 fiscal year:

• Capital expenditures are expected to be approximately $210 million.
  • Hyatt capital expenditures, excluding ALG, are expected to be approximately $185 million reflecting a reduction from $190 million as a result of owned hotel dispositions.
  • ALG capital expenditures are expected to remain at approximately $25 million.

The Company is reaffirming the following information for the 2022 fiscal year:

• Adjusted selling, general, and administrative expenses are expected to be approximately $460 million to $465 million. This includes selling, general, and administrative expenses associated with the acquisition of ALG, of which $25 million to $30 million is related to one-time integration costs in 2022. Refer to the table on page 16 of the schedules for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.
  • Excluding ALG, Adjusted selling, general, and administrative expenses are expected to be approximately $300 million to $305 million, and include $25 million to $30 million related to one-time integration costs in 2022.
  • ALG Adjusted selling, general, and administrative expenses are expected to be approximately $160 million.
• The Company expects to grow net rooms by approximately 6.0%.

No disposition or acquisition activity beyond what has been completed as of the date of this release has been included in the 2022 Outlook. The Company's 2022 Outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that Hyatt will achieve these results.

BALANCE SHEET / LIQUIDITY

As of March 31, 2022, the Company reported the following:

• Total debt of $3,821 million.
• Pro rata share of unconsolidated hospitality venture debt of $593 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 $2.8 billion with $1,305 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.

CONFERENCE CALL INFORMATION

The Company will hold an investor conference call this morning, May 10, 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 Tuesday, May 10, 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 ALG, including the related incurrence of additional material indebtedness; our ability to realize the anticipated benefits of the acquisition of ALG as rapidly or to the extent anticipated, including successful integration of the ALG business; the duration and severity of the COVID-19 pandemic and the pace of recovery following the pandemic, any additional resurgence, or COVID-19 variants; 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 the COVID-19 pandemic, any additional resurgence, or COVID-19 variants, and the impact of actions that governments, businesses, and individuals take in response, on global and regional economies, travel limitations or bans, and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; the broad distribution and efficacy of COVID-19 vaccines and treatments, wide acceptance by the general population of such vaccines, and the availability, use, and effectiveness of COVID-19 testing, including at-home testing kits; the ability of third-party owners, franchisees, or hospitality venture partners to successfully navigate the impacts of the COVID-19 pandemic, any additional resurgence, or COVID-19 variants; 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: net income (loss), adjusted for special items; diluted earnings (losses) per share, adjusted for special items; Adjusted EBITDA; Adjusted EBITDA margin; and Adjusted SG&A. 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.

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 March 31, 2022, the Company’s portfolio included more than 1,150 hotels and all-inclusive properties in 71 countries across six continents. The Company's offering includes the Park Hyatt®, Miraval®, Grand Hyatt®, Alila®, Andaz®, The Unbound Collection by Hyatt®, Destination by Hyatt™, Hyatt Regency®, Hyatt®, Hyatt Ziva™, Hyatt Zilara™, Thompson Hotels®, Hyatt Centric®, Caption by Hyatt, JdV by Hyatt™, Hyatt House®, Hyatt Place®, UrCove, and Hyatt Residence Club® brands, as well as resort and hotel brands under the AMR™ Collection, including Secrets® Resorts & Spas, Dreams® Resorts & Spas, Breathless Resorts & Spas®, Zoëtry® Wellness & Spa Resorts, 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.

The financial section of this release, including a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures, is provided on the Company's website at investors.hyatt.com.

Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 12.

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