Hyatt Hotels (NYSE:H) recently posted fourth-quarter earnings results that paired slowing revenue growth with increased profitability. The hotel chain's initial forecast for 2019 predicted sluggish sales gains along with improving finances thanks to robust management fees and cash brought in by property sales.

More on that outlook in a moment. First, here's how the headline results compared against the prior-year period:


Q4 2018

Q4 2017

Year-Over-Year Change


$1.14 billion

$1.12 billion


Net income

$44 million

$213 million


Adjusted earnings*

$182 million

$173 million






Data source: Hyatt's financial filings. *Adjusted earnings don't include gains or losses from property sales.

What happened this quarter?

Core revenue growth slowed for the third straight quarter on weakness in key markets including the U.S. and China. But the company notched solid gains in adjusted earnings and accelerated its property development plans. 

A couple checks in to a hotel.

Image source: Getty Images.

Key highlights of the quarter include: 

  • Revenue per average room night (RevPAR) rose 1.5%, which was a slowdown from last quarter's 2.8% jump and the 4% rate that Hyatt  enjoyed during the first half of 2018. The increase was a slight disappointment, as it ensured overall 2018 RevPAR of 3.1%, slightly below management's late October forecast of between 3.25% and 3.75% growth.
  • Hyatt's occupancy improvement held steady overall, but the company reported lower pricing and average daily spending in a few key markets, including the full-service hotel niche in the U.S. As a result, growth rates in these figures declined for the wider company.
  • Management and franchise fees jumped 12% to help adjusted earnings rise 7%. The company's 79% drop in reported net income, meanwhile, was driven by a large property sale in the prior-year period.
  • With its asset recycling program, which involves selling some real estate to franchisees while purchasing other properties, generating plenty of excess capital, Hyatt closed out a year in which it spent nearly $1 billion on stock buybacks while initiating -- and then raising -- a quarterly dividend.

What management had to say

Executives stressed the broader business successes that helped the chain continue its growth streak. "We had a very strong 2018," CEO Mark Hoplamazian said in a press release, "driven by another year of double-digit growth in management and franchising fees, nearly offsetting the earnings decline in our owned and leased segment, resulting from over $1 billion of asset sales."

Hoplamazian added, "We believe we are well-positioned to continue to execute our long-term shift to an asset-lighter business model."

Check out the latest Hyattearnings call transcript.

Looking forward

That asset lightening will include roughly $400 million of further property sales between now and 2020, executives said, which should provide additional funds for growth initiatives and continued cash returns to shareholders. To that end, Hyatt said it is on pace to expand more quickly in the next few years, with 445 hotels, accounting for 89,000 rooms, in development today. A year ago, those figures stood at 330 hotels and 70,000 rooms. 

In the meantime, Hyatt issued a conservative forecast for sales growth at existing managed locations, with RevPAR growth set to slow to between 1% and 3%, down from 3.1% last year and 3.3% in 2017. And, given that the bulk of its $1.5 billion of planned asset sales have already happened, the company expects to return $300 million to shareholders this year, down from about $1 billion in 2018.

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