Hyatt Hotels Corporation has started off 2020 in negative territory, as the company continues to operate in an environment of “suppressed demand and great uncertainty”, according to its CEO.
In the three months to 31 March 2020, Hyatt posted a net loss of US$103 million ($160 million) compared to the US$63 million ($98 million) profit it achieved in the first quarter of 2019.
Taking into account significant items such as unrealised losses, fund deficits and asset impairments, Hyatt’s adjusted loss for the quarter was US$35 ($54 million) compared to the US$48 million profit during the previous corresponding period.
Hyatt’s adjusted quarterly earnings decreased fell 54.3 per cent to US$86 million ($133.5 million), while system-wide RevPAR dropped 28.1 per cent, including a 25.8 per cent decline at comparable owned and leased hotels.
Adjusted earnings for Hyatt’s management and franchising segment across Australia, Southeast Asia, Greater China, South Korea, Japan, and Micronesia (ASPAC) decreased by 58.5 per cent.
Hyatt noted that occupancy in Greater China, where the impacts of the COVID-19 pandemic were first reported, have shown gradual improvement over the past few weeks, with occupancy approaching 25 per cent at the end of April.
The company’s system-wide occupancy rates as of 30 April 2020 are averaging approximately 15 per cent for hotels that remain operational.
Hyatt opened 12 hotels (or 1,820 rooms) in the first quarter of 2020, contributing to 6.3 per cent growth in net rooms compared to the first quarter of 2019.
As of 31 March, the company had executed management or franchise contracts for approximately 500 hotels (101,000 rooms), compared to 455 hotels (91,000
rooms) in the first quarter of 2019.
Mark Hoplamazian, president and CEO of Hyatt, said: “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.”
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