Hyatt 1Q net income rises on better demand

AP News
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Posted: May 03, 2011 10:27 AM

Hyatt Hotels Corp.'s net income rose in the first quarter as demand rose in North America and abroad, along with occupancies and room rates in many markets.

The results are a sign the lodging sector is recovering after a recession that led both business and leisure travelers to cut spending. The improving economy now has both groups traveling more.

President and CEO Mark Hoplamazian said in a statement that the Chicago company is confident the recovery will continue in part because of strong North American group bookings.

Hyatt, whose brands include Hyatt Regency, Andaz and others, reported net income of $10 million, or 6 cents per share, compared with $5 million, or 3 cents per share, in the same period last year.

Adjusted earnings climbed to 7 cents per share, compared with break-even last year.

Analysts surveyed by FactSet expected earnings of 4 cents per share.

Management and franchise fees earned increased about 23 percent, but the company reported that hotel operating margins declined.

Hyatt's stock fell 75 cents to $43.39 in morning trading.

Revenue for the three months ended March 31 rose 4 percent to $875 million. The performance bested Wall Street's estimate of $860.5 million.

Revenue per available room for owned and leased hotels open at least a year climbed 2 percent. That figure, known as revpar, is a key gauge of a hotel operator's performance.

In North America, full-service revpar for hotels open at least a year increased 8.1 percent. The figure rose 11 percent internationally.

Hoplamazian said demand for short stays was strong and that its Hyatt Place and Hyatt Summerfield Suites did well.

Hoplamazian said results were strong in China and Brazil. He indicated that there was more volatility in the company's first-quarter results because of Japan's earthquake and tsunami and unrest in the Middle East and North Africa.

Hyatt anticipates opening about 15 hotels in 2011. The company had 451 properties in 43 countries as of March 31.