Hyatt made a Covid-19 related trading update today due to debt issuance at it doesn’t look good (nothing unexpected though).
The average occupancy at hotels still operating is hovering at 15%, and more than one-third of Hyatt’s affiliated properties have suspended operations (300+).
You can access Hyatt here.
Here’s the update from Hyatt:
We are in the process of finalizing our first quarter operating results and expect to report comparable system-wide RevPAR declines of 28% for the three months ended March 31, 2020, compared with the same period in the prior year. These results are computed on a constant dollar comparable basis with all hotels where operations are currently suspended due to the COVID-19 pandemic included as comparable hotels. System-wide results have worsened in the first half of April, and we expect a material decrease in RevPAR for the second quarter of 2020.
We started 2020 with RevPAR growth in the low single-digits in both comparable system-wide and owned and leased hotels, excluding our ASPAC region. February year-to-date system-wide results decreased approximately 4.8% entirely due to the impact of COVID-19 in Greater China and other areas of Asia. Excluding the results of our ASPAC region, February year-to-date system-wide results increased 1.6%. With the global spread of the COVID-19 pandemic in March, we began to experience significant decreases in demand, with a system-wide RevPAR decrease of approximately 67% in March. This system-wide RevPAR decrease reflects declines of 64% in the Americas, 78% in ASPAC, 69% in EAME/SW Asia and 72% in our owned and leased portfolio in March.
The following table sets forth our preliminary estimated RevPAR performance by month for the three months ended March 31, 2020, when compared to the same period in 2019:
System-wide occupancy rates as of April 15, 2020 are averaging approximately 15% for hotels that remain operational. As of April 15, 2020, operations were suspended at approximately 35% of our hotels around the world. Excluding our owned and leased hotels, operations were suspended at 33% of our hotels in the Americas, operations were suspended at 15% of our hotels in our ASPAC region and operations were suspended at 51% of our hotels in EAME/SW Asia. Operations were suspended at 84% of our owned and leased hotels. Occupancy levels in Greater China, where the effects of COVID-19 were first felt, have shown gradual improvement over the past few weeks, with occupancy approaching 20% in April on a month-to-date basis through April 15, recovering from a low of mid-single digits in mid-February, as quarantines and travel restrictions have lifted. There are currently four hotels where operations are suspended in Greater China, compared to 26 hotels at the peak of the crisis during February. The increase in demand is driven by leisure travel. Other parts of the world largely remain under strict quarantines and travel restrictions, which have resulted in recent significant declines in occupancy with uncertainty surrounding near-term improvement.
Hyatt’s group business trends reflect significant near-term cancellations so far this year, with limited cancellations for dates in the second half of 2020 and virtually no cancellations in 2021 and beyond. Some near-term group business has been deferred and rebooked into the later part of 2020 or early 2021. We currently continue to see long-term group bookings production; however, booking volumes have decreased in the last several weeks.
It is interesting while 35% of all Hyatt affiliated hotels are closed, the number is 85% at owned and leased ones.
Only four hotels in Greater China are still closed, and the occupancy rate is getting closer to 20% driven by leisure travel.
Hyatt has plenty of cash available and not much outstanding debt. As long as the hotel company can adjust its expenses to the new normal, it should be in relatively good shape after the pandemic is over.