[UPDATE] Hotels' performance results for the first quarter of 2024

13 min reading time

Published on 15/05/24 - Updated on 15/05/24

Finance

In the hospitality sector, Hilton, Wyndham Hotels & Resorts, Marriott International, IHG Hotels & Resorts, Choice Hotels International, Hyatt Hotels Corporation, Meliá Hotels International and Minor Hotels have recently unveiled their first-quarter results for 2024, showcasing noteworthy growth and strategic advancements.

Hilton Worldwide Holdings Inc.: Achievements and Milestones

Hilton's first-quarter results for 2024 underscore strong performance across various metrics.

Key highlights include:

  • Earnings Per Share (EPS): Hilton reported a diluted EPS of $1.04 for the first quarter. Adjusted for special items, diluted EPS stood at $1.53, reflecting solid operational performance.

  • Net Income and Adjusted EBITDA: The company recorded a net income of $268 million for the first quarter, with adjusted EBITDA reaching $750 million.

  • Room Development: Hilton approved nearly 30,000 new rooms for development during the quarter, marking an important stride in its growth strategy. The company's development pipeline now stands at a record 472,300 rooms, showcasing a 10% growth compared to the previous year.
     
  • In the first quarter, Hilton incorporated 16,800 rooms into its system, leading to a net increase of 14,200 rooms for the quarter, which contributed to a net unit growth of 5.6 percent compared to March 31, 2023.
     
  • Additionally, Hilton repurchased 3.4 million shares of its common stock during the same period. The total capital return, inclusive of dividends, amounted to $701 million for the quarter and $908 million year-to-date through April.
     
  • Strategic Acquisitions: Hilton announced plans to acquire the Graduate Hotels brand and a controlling financial interest in the Sydell Group, signaling its foray into the luxury lifestyle segment.

Financial Outlook:

Despite prevailing economic uncertainties, Hilton maintains an optimistic outlook for the full year. In March 2024, Hilton issued senior notes totaling $1.0 billion, comprising $550 million in 5.875% Senior Notes due 2029 and $450 million in 6.125% Senior Notes due 2032. The company projects system-wide RevPAR to increase between 2.0% and 4.0% compared to 2023, with net income estimated to be between $1,586 million and $1,621 million. Moreover, the projected Adjusted EBITDA for the full year falls within the range of $3,375 million to $3,425 million. The projected capital return for the full year 2024 is approximately $3.0 billion.

Wyndham Hotels & Resorts: Stable Growth and Expansion

Wyndham Hotels & Resorts also reported its first-quarter results for 2024, reflecting steady growth and strategic initiatives.

“We’re thrilled to announce another strong quarter of progress in our executions, openings, franchisee retention and net room growth around the world,” “Increased interest from hotel owners in our brands has propelled our development pipeline to a record 243,000 rooms, marking an impressive 8% increase. Our strong balance sheet and cash flow generation capabilities provide significant opportunity to continue to enhance returns to our shareholders over both the short and long-term, as evidenced by our Board of Directors’ approval of a $400 million increase in our share repurchase authorization.”- Geoff Ballotti, president and chief executive officer. 

Key highlights include:

Strong Performance Metrics:

  • Global Revenue per Available Room (RevPAR) witnessed a 1% growth in constant currency compared to the first quarter of 2023.
  • Ancillary revenues surged by 8% year-over-year, demonstrating the company's diversified revenue streams.
  • The company experienced a notable 4% increase in system-wide rooms compared to the previous year.
  • A significant milestone was achieved with the opening of over 13,000 rooms, marking a remarkable 27% year-over-year increase.
  • Awarded 171 development contracts, showcasing an 8% increase compared to the same period last year.
  • The development pipeline expanded by 8% year-over-year, reaching a record-high of 243,000 rooms, with approximately 69% of projects falling within the midscale and above segments.

Strategic Ventures and Expansion:

  • Wyndham Hotels & Resorts entered the upscale extended stay segment through a strategic partnership with WaterWalk Extended Stay by Wyndham.
  • The company continues to focus on international expansion, with 58% of its pipeline located outside the United States.
  • Notably, approximately 79% of the pipeline consists of new construction projects, emphasizing the company's commitment to growth and innovation.

Financial Performance:

  • Net cash provided by operating activities amounted to $76 million, with adjusted free cash flow reaching $102 million.
  • Shareholders received significant returns, with $89 million returned through share repurchases and quarterly cash dividends.
  • Despite challenges, the company maintained a strong financial position, ending the quarter with a cash balance of $50 million and over $580 million in total liquidity.

Strategic Outlook:

  • Financial Projections: The company has raised its full-year 2024 earnings per share (EPS) outlook, reflecting confidence in its operational resilience and strategic initiatives.
  • Share Repurchase Authorization: Wyndham's Board of Directors has increased the share repurchase authorization by $400 million.
  • Continued Expansion: With a strong development pipeline and a focus on market diversification, Wyndham Hotels & Resorts remains poised for sustained growth, both in domestic and international markets.

Marriott International, Inc.: A positive trajectory across various key metrics

Financial Highlights:

- Revenue Per Available Room (RevPAR) Growth: The first quarter saw a noteworthy 4.2 percent increase in comparable systemwide constant dollar RevPAR worldwide. Specifically, RevPAR grew by 1.5 percent in the U.S. & Canada and surged by 11.1 percent in international markets, compared to the same period in 2023.
- Earnings Per Share (EPS): Reported diluted EPS for the quarter stood at $1.93, with adjusted diluted EPS at $2.13. This compared to reported diluted EPS of $2.43 and adjusted diluted EPS of $2.09 in the first quarter of 2023.
- Net Income: Reported net income totaled $564 million for the quarter, with adjusted net income at $620 million. In the first quarter of 2024, Adjusted EBITDA amounted to $1,142 million, marking an increase from the $1,098 million in Adjusted EBITDA reported in the first quarter of 2023.
- Room Additions: Marriott added approximately 46,000 net rooms during the quarter, including around 37,000 rooms through its collaboration with MGM Resorts International.
- Development Pipeline: The company’s global development pipeline remains robust, with over 3,400 properties and nearly 547,000 rooms, including properties under construction and those approved for development but not yet under contract.
Share Repurchases: Marriott repurchased 4.8 million shares of common stock for $1.2 billion during the quarter, contributing to a year-to-date total of 6.2 million shares repurchased for $1.5 billion as of April 26.

“We were pleased with our results in the quarter, which included both excellent net rooms growth and cash generation. Worldwide RevPAR[1] grew over 4 percent, with gains in both occupancy and ADR. Our international markets were particularly strong, posting RevPAR gains of 11 percent, led by nearly 17 percent year-over-year growth in Asia Pacific excluding China. “In the U.S. & Canada, demand has normalized, with RevPAR increasing 1.5 percent. The group segment was the stand-out in the quarter. Group RevPAR in the region rose nearly 5 percent year-over-year, with growth in both rate and occupancy. “In February we celebrated the fifth anniversary of Marriott Bonvoy, our powerful, award-winning travel and loyalty program. With our steadfast focus on growing our membership base and enhancing engagement with our members both on and off property, the program now boasts around 203 million global members and remains a key competitive advantage. “We are excited about the launch of MGM Collection with Marriott Bonvoy during the quarter, which added nearly 37,000 rooms to our system from our strategic agreement with MGM Resorts International. We have seen outstanding initial booking pace and loyalty point redemptions across the collection. “Our results in the first quarter highlight the resiliency of our asset-light business model and the strength of our brands. We are raising our full year earnings guidance and now expect to return between $4.2 billion to $4.4 billion to shareholders in 2024.”- Anthony Capuano, President and Chief Executive Officer
 

Operational Insights:

- Management and Franchise Fees: Base management and franchise fees saw a 7 percent increase to $1,001 million, primarily driven by RevPAR growth and unit expansion. Non-RevPAR-related franchise fees also saw growth, particularly in co-brand credit card fees.
- Incentive Management Fees: Incentive management fees rose by 4 percent to $209 million, with international markets accounting for a significant portion of the fees.
- Operating Income: Reported operating income totaled $876 million, while adjusted operating income reached $952 million for the quarter. 
Global Portfolio: Marriott’s global system now comprises nearly 8,900 properties with over 1,643,000 rooms, reflecting a continued expansion.

Financial Position:

Debt and Cash Holdings: Marriott’s total debt stood at $12.7 billion at the end of the quarter, with cash and equivalents totaling $0.4 billion.

IHG Reports Positive Q1 Trading Update for 2024

InterContinental Hotels Group (IHG) has released its trading update for the first quarter of 2024.

Global Performance:
- Q1 global Revenue per Available Room (RevPAR) increased by 2.6% year-over-year (YOY).
- Americas region experienced a slight decrease in RevPAR by -0.3%, while EMEAA (Europe, Middle East, Asia & Africa) saw a substantial increase of 8.9%, and Greater China recorded a 2.5% rise.
- Average daily rate (ADR) grew by 2.3%, with occupancy up by 0.2 percentage points.

Expansion and Growth:
- IHG's gross system size expanded by 5.0% YOY, with 6,368 hotels and 946,000 rooms globally.
- In Q1, IHG opened 46 hotels, adding 6,300 rooms to its portfolio, marking an 11.1% increase YOY after adjusting for Iberostar.
- Net system size growth reached 3.4% YOY, totaling 3.2% after adjustments for Iberostar.
- The company signed agreements for 129 hotels, contributing 17,700 rooms to its pipeline, reflecting a 7.1% increase YOY.
- IHG's global pipeline now stands at 305,000 rooms across 2,079 hotels, marking a 6.6% increase YOY.

Financial Updates:
- IHG completed $239 million of its $800 million share buyback program for 2024, reducing the share count by 1.4%.
- An agreement with NOVUM Hospitality in Germany, signed in April, is set to add up to 17,700 rooms (119 hotels) to IHG's global system growth, reflecting a 1.9% increase.

Strategic Changes:
IHG implemented changes to its System Fund arrangements, aiming to enhance owner economics and boost ancillary fee streams.
 

“Global RevPAR in the first quarter of 2024 continued to grow, up +2.6%, reflecting the strength of our globally diverse footprint. There was an impressive performance in EMEAA which was up nearly +9%. The Americas, having already recovered very strongly, was broadly flat due to some adverse calendar timing, and Greater China grew by +2.5% and will continue to benefit from returning international inbound travel this year. Global occupancy moved up to 62% and average daily rate increased by a further +2% as pricing remained robust, reflecting the complete return of leisure, business, and group travel.- Elie Maalouf, Chief Executive Officer, IHG Hotels & Resorts

Choice Hotels International starts 2024 on a strong note

  • Net income was $31.0 million for the first quarter of 2024 while adjusted net profit increased 9% to $63.7 million compared to the same period in 2023.
  • EBITDA increased significantly to $124.3 million, a record for the first quarter and an increase of 17% compared to the same period in 2023.
  • In March 2024, the company's Board of Directors approved an increase of 5 million authorised shares under its share buyback programme.
  • The Group opened on average more than four hotels per week for a total of 55 hotel openings in the first quarter of 2024, an increase of 20% compared to the same period in 2023.
  • The international portfolio at 31 March 2024 was up 1.3% in number of hotels and 2.3% in number of rooms compared with 31 March 2023.
  • The global pipeline at 31 March 2024 increased by 10% to a company record of over 115,000 rooms compared to 31 December 2023, including a 36% increase in the global pipeline for conversion rooms.
  • The domestic room pipeline at 31 March 2024 has increased by 11% since 31 December 2023, highlighted by a 59% increase for conversion rooms.

Building on our record 2023 financial results, we have taken first quarter performance to new levels, with Adjusted EBITDA and EPS increasing by 17% and 14% respectively, year-on-year. These impressive results demonstrate that we are unlocking the revenue synergies of the Radisson Americas acquisition, which has significantly improved our growth profile and opened up new sources of additional revenue. Looking ahead, we are confident that our versatile business model, with multiple drivers, positions us well to deliver continued earnings growth and create shareholder value.

Patrick Pacious, CEO, Choice Hotels International

Hyatt Hotels Corporation turns in a fine performance

  • Group net profit was $522 million and adjusted net profit was $75 million.
  • Hyatt achieved EBITDA of $252 million in the first quarter.
  • Systemwide comparable hotel RevPAR increased by 5.5% compared to the same period in 2023.
  • Net room growth was approximately 5.5%, bringing the number of management or franchise agreements executed to approximately 129,000 rooms.
  • Full year net profit is expected to be between $1,135 million and $1,195 million while full year adjusted EBITDA is expected to be between $1,150 million and $1,190 million, in line with the previously communicated outlook for 2024.

The year is off to a very good start, with gross commission income reaching a record $262 million in the quarter. Our pipeline also reached a new record, increasing 10% year-on-year to 129,000 rooms, and we achieved net room growth of 5.5%. World of Hyatt membership grew by 22% to a new record of 46 million members.

Mark Hoplamazian, CEO of Hyatt Hotels Corporation

Meliá Hotels International maintains solid performance

  • The Spanish group's consolidated revenues came to €440 million in the first quarter of 2024, up 11.1% on the same period in 2023.
  • Adjusted EBITDA came to €95.3 million, up 22.3% on the first quarter of the previous year.
  • This robust performance was driven in part by strong growth in RevPAR, up 17.3% on 2023.
  • The Group's portfolio expanded rapidly during the quarter, with 26 new hotels signed and 12 new hotels opened, targeting new markets such as Albania, Malta and Saudi Arabia.
  • The Group has also announced plans to double its portfolio of hotels in Mexico by 2025.
  •  For the rest of 2024, the Group plans to sign a minimum of 30 hotels and open a minimum of 20.

The first quarter of the year confirms the positive trend in tourist demand, both urban and holiday, as well as the dynamic Group and Business activity (MICE segment). The outlook for the period as a whole has been respected in the various markets, with the excellent performance of the Canary Islands and the rest of the Spanish coast, which has enabled an earlier start to the season in holiday hotels, as well as in America, where the first quarter is a high-season period, the performance of Mexico, which consolidated its rates and increased its volume, and the Dominican Republic, with a record season in terms of tourist arrivals which translated into excellent data in terms of occupancy and rates, with a balanced mix of groups and individual customers.

Gabriel Escarrer Jaume, CEO of Meliá Hotels International

Minor Hotels Europe & Americas Sees Strong Revenue Growth in 1Q24

Minor Hotels Europe & Americas reported a notable uptick in financial performance during the first quarter of 2024, with total revenue reaching €460 million, marking a significant 13% increase compared to the same period last year.

  • Operational Growth: First-quarter EBITDA surged by 17% to €69 million, showcasing robust operational performance and effective cost management strategies.
  • Positive Trends: Increased business momentum was observed in both leisure and business travel segments across Europe and the Americas, with notable improvements in occupancy rates in Benelux and Central Europe.
  • Revenue Growth: Average daily rate (ADR) saw a notable increase to €121, resulting in a robust 9.2% growth in revenue per available room (RevPAR) to €75 in 1Q24.
  • Contribution from Refurbishments: Like-for-like revenue increased significantly, with hotels undergoing refurbishment contributing €10 million and newly-opened hotels adding another €10 million to the revenue growth during the quarter.
  • Regional Performance: Spain, Italy, Benelux, Central Europe, and Latin America all experienced positive revenue growth, with Spain and Italy leading the pack with 14% and 8% growth respectively.
  • Liquidity and Investment: Minor Hotels Europe & Americas maintains a strong liquidity position of €494 million and plans to gradually increase capital expenditure over the coming quarters to strengthen operational capabilities.

The recent credit rating upgrade by Fitch reflects the company's healthy performance in 2023, further solidifying its position in the hospitality industry.

Wyndham Hotels & Resorts

Wyndham Hotels & Resorts

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