UPDATE 2-Hyatt expects strong occupancy as business travel increases

Wed Apr 30, 2014 2:09pm EDT

* First-quarter revenue $1.07 bln vs est. $1.06 bln

* Adj. earnings $0.13/share vs est. $0.11/share

* Comparable systemwide revPAR increases 7.7 pct

* Shares rise as much as 4 percent (Adds analyst comments, updates share price)

By Mridhula Raghavan

April 30 (Reuters) - Hyatt Hotels Corp reported a better-than-expected profit and said occupancy rates were likely to grow for the rest of the year as U.S. business travel increases.

Shares of Hyatt, controlled by the billionaire Pritzker family of Chicago, rose nearly 4 percent to $56.04 on Wednesday.

The company, owner of the Park Hyatt, Grand Hyatt and Hyatt Regency brands, said group bookings rose 13 percent in the first quarter ended March 31, boding well for the rest of the year.

Hyatt gets about 45 percent of its revenue from group bookings, under which rooms are reserved in bulk for events and meetings.

Group bookings bring in more revenue because it often includes services such as catering.

"Looking ahead, we expect healthy occupancy and (room) rate growth, particularly in the Americas, as (Hyatt's) group business continues to recover and transient business remains strong," Chief Executive Mark Hoplamazian said in a statement.

Hyatt's comparable revenue per available room (revPAR) across all its properties increased 7.7 percent in the quarter.

RevPAR is calculated by multiplying a hotel's average daily room rate by its occupancy rate.

"The results we have seen thus far from the lodging companies really tell a story of a very healthy North American market and an improving global market," Macquarie Research analyst Chad Beynon told Reuters.

Marriott International Inc and Starwood Hotels & Resorts Worldwide Inc have also reported strong profits for the January-March quarter.

However, both Hyatt and Marriott said revenue in the current quarter could be affected by Easter holidays, which were in April this year after falling in March last year.

Group bookings normally fall in holidays as businesses close or postpone their events.

Hyatt's attributable net income rose seven-fold to $56 million, or 36 cents per share.

Excluding items, Hyatt earned 13 cents per share, above the 11 cents expected by analysts on average, according to Thomson Reuters I/B/E/S. Revenue rose 10 percent to $1.07 billion, edging past the average estimate of $1.06 billion.

Hyatt's shares were up 3.5 percent at $55.93 in early afternoon trading on the New York Stock Exchange on Wednesday. Shares of Marriott and Starwood were up 1 percent. (Reporting by Mridhula Raghavan in Bangalore; Editing by Maju Samuel)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.