Hyatt said it has realised $721 million of proceeds from the net disposition of real estate as part of its plan to sell $2bn of assets by the end of 2024.
This forms part of the company’s extended asset-disposition commitment announced in August 2021. In the third quarter of 2023, the hospitality company sold its interests in the entities which own the Destination Residential Management business for $2 million of base consideration and up to an additional $48 million of contingent consideration to be earned within two years following the sale, upon the achievement of performance-based metrics and contract extensions.
Hyatt also signed a definitive purchase and sale agreement in October for one asset, expected to close in the fourth quarter of 2023, and has signed a letter of intent for an asset previously marketed for sale which is expected to close in the first half of 2024.
The company has also signed a letter of intent for one additional asset and expects the transaction to close in the first half of 2024 and additionally has launched the marketing process for another asset.
Hyatt says it has also been advancing discussions for off-market transactions related to other properties in its portfolio.
This comes as the company posted net income of $68 million in the third quarter of 2023, more than doubled from the prior year’s $28 million. Meanwhile, adjusted net income was $75 million in the third quarter of 2023 compared to $72 million in the third quarter of last year.
Comparable system-wide revenue per available room (revpar) increased 8.9 per cent in the third quarter of 2023 compared to 2022, driven by occupancy up 420 basis points and average daily rate up 2.6 per cent. Hyatt said overall demand remained resilient, particularly among leisure guests and group customers.
Net rooms growth was around 6.2 per cent.
Looking ahead to the full year, Hyatt forecast system-wide revpar up between 15 per cent to 16 per cent compared to 2022, net rooms growth of around 6 per cent, and net income of around $210 million.
What they said
Mark Hoplamazian, president & CEO of Hyatt said: "We had a tremendous quarter, largely driven by the strength in our core business. Our third quarter performance contributed to a 25% improvement in total fees for the first nine months of the year compared to 2022. We expect strong fee growth to continue, fueled by our record pipeline of 123,000 rooms and higher levels of conversion opportunities combined with robust demand for travel around the globe.
We continue to successfully execute our asset-light transformation and growth strategy while returning meaningful capital to shareholders."