Doorman Antonio Williams outside the Park Hyatt hotel
in downtown Chicago. (E. Jason
Wambsgans/Chicago Tribune)
By Julie Wernau | Hyatt Hotels Corp. will be concentrating on long-term growth and
expansion in light of near-term declines in occupancy, room rates and
lucrative group bookings that have hurt the hotel sector, the company
said in its first earnings call this morning since the company’s public
offering in November.
Mark Hoplamazian, president and chief executive officer for Hyatt, said
while the company stresses the importance of owning a portion of its
portfolio – 102 hotels versus 424 managed or franchised — they have
been concentrating efforts on increasing franchising and management
agreements that require little to no capital, particularly in Southeast
Asia, India and China, where revenue per available room has fared
better than in the U.S.
He said the “vast majority” of properties that are added to the Hyatt portfolio in the future will be third-party owned.
The company executed contracts for more than 120 hotels in 2009, he said, approximately 55 percent of those hotels were located outside of the United States. The company is more dependent than its competitors on its North America properties, which make up approximately 75 percent of its portfolio.
In 2010, the company said it has asked hotels to concentrate on increasing the engagement of its associates, improving guest satisfaction and increasing each hotel’s presence in the market to make Hyatt the preferred brand.
The company also plans to concentrate on “renovating and supporting existing hotels” within the U.S. market, Hoplamazian said, and has plans to undergo large-scale renovations at five hotels in the U.S. in 2010, starting with Grand Hyatts in New York and San Francisco, a decision they said will effect near-term results but they expect to pay off in the long run.
The company said it expects to spend between $270 million and $290 million on capital expenditures in 2010, as compared to about $216 million spent in 2009.
Full year revenues were $3.33 billion, down from 2008 revenues of $3.8 billion.
