The multinational hospitality company Hyatt Hotels Corporation has just released its financial results for the first quarter of 2020. With the closure of most of its network of hotels, the leader in the hospitality industry – with a portfolio of more than 900 hotels – is experiencing a severe drop in business. Now more than ever, the group is seeking to join forces to prepare for the post-COVID-19 era.
By April 30, 2020, operations were suspended in 82% of the hotels owned and leased by Hyatt Hotels Corporation. System-wide occupancy rates at that time were only about 15 per cent for those hotels that remained operational.
The pandemic of COVID-19 and its disastrous economic consequences inevitably had an impact: the net loss attributable to Hyatt was $103 million in the first quarter of 2020 or $1.02 per diluted share, compared to net income attributable to Hyatt of $63 million in the first quarter of 2019 or $0.59 per diluted share.
Adjusted net loss attributable to Hyatt was $35 million in the first quarter of 2020, or $0.35 per diluted share, compared with adjusted net income attributable to Hyatt of $48 million in the first quarter of 2019, or $0.45 per diluted share.
These poor first quarter 2020 financial results are all the more notable when juxtaposed with first quarter 2019 results: net income declined 262.8% to a net loss of $103 million.
Adjusted EBITDA decreased by 54.3% to $86 million, a decrease of 53.9% on a constant currency basis.
Revenues per available room (RevPAR) decreased by 28.1% on a system-wide basis.
In view of these results, Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, expressed his confidence in the company’s ability to manage the crisis : “As COVID-19 became a global pandemic, we took prompt and meaningful actions to manage the first phase of the impact of the virus. We obtained substantial additional cash, reduced investment and corporate spending to preserve cash, and we reduced third party hotel owners’ direct costs through this period. While we continue to operate in an environment of suppressed demand and great uncertainty, we believe our existing liquidity provides sufficient capacity to cover at least 30 months of operations under current conditions.”
In addition, Hyatt announced on May 4th the new care and cleanliness commitments it will be undertaking: “The world as we know it has been turned upside down by COVID-19 and when we will all be ready to travel again, we want to make sure that every Hyatt employee and customer is confident that all our commitments are in support of their safety and well-being.” continued Hyatt CEO. “To do this, we must critically examine and re-imagine every aspect of every hotel experience, from our guest rooms and lobbies to our spas and restaurants, incorporating the latest research, technology and innovation. Hyatt’s Global Care & Cleanliness Commitment is an important expression of our goal of caring for people to be the best they can be – today and tomorrow.”
In May 2020, the hotel group plans to introduce GBAC STARTMTM accreditation through a performance-based cleaning, disinfection and infectious disease prevention program that will focus on establishing sanitary, safe and healthy hotel environments.
The results are quite favourable: in China, the occupancy rate has gradually improved over the last few weeks, with an occupancy rate approaching 25% at the end of April.
But at a time when most parts of the world remain subject to “quarantines” and travel restrictions, uncertainties – mainly about a short-term improvement – persist for the international company Hyatt.
Featured Photo : © HYATT Hotels
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