Analyst Note| Dan Wasiolek |
Hyatt’s 2020 revenue declined 59% versus our estimate for a 58% decline, with negative EBITDA of $177 million, worse than our positive $55 million forecast, driven by higher owned hotel expenses and selling, general, and administration spending and lower collection fees. Hyatt’s fourth-quarter revenue per available room was down 69%, near our estimate for a decline of 70%, and compared with the 59% and 54% drops seen at narrow-moat peers Hilton and Marriott, respectively. The performance marked little improvement from the 72% decline Hyatt experienced in its third quarter, following a larger step up from the 89% drop in the second quarter, as a result of travel restrictions tied to the resurgence in COVID-19 cases. But as vaccines continue to be distributed, we expect travel demand to rebound strongly in the second half of 2021, with Hyatt’s full-year 2021 revPAR returning to the mid-60s of 2019, followed by a full recovery by 2023. This view is buoyed by hotel industry demand in China nearly returning to prepandemic demand levels in December, as well as by Hyatt’s group bookings pacing down over 80% in the first half of 2021 but just over 30% lower for the second half of 2021, implying a desire to travel.