Given the company's focus on group and corporate business in urban settings, few hotel brands were hurt as deeply and for as long by the pandemic downturn as Hyatt Hotels Corp.
But now with early signs that those segments are coming back in a meaningful way, and riding the crest of their investment in leisure travel-focused Apple Leisure Group, Hyatt executives are heading into 2023 with renewed optimism as others worry about a potential recession.
Speaking during his company's third-quarter earnings call Thursday, President and CEO Mark Hoplamazian said performance is now exceeding pre-pandemic levels.
"We finished October ahead of 2019 by a point, five points if you exclude Greater China," he said. "In group, we were up sequentially from September to October 18% in actualized business. The near-term booking and stay momentum is just palpable. It's very, very clear to us."
He noted just six months ago the company was roughly 7% below the booking pace set in 2019 but were up 6% by the end of October.
He said corporate demand was enough to push up total transient business by 4% from September to October, when the typical leisure travel season winds down.
"We go into the quarter not holding on by our fingertips but actually walking firmly with confidence into the fourth quarter," he said.
The company revised its guidance for the fourth quarter and full-year 2022 upwards.
The company now expects full-year revenue per available room to be up 60% to 65% compared to 2021 and down 4% to 7% versus 2019.
"We're building confidence here in the forward-looking bookings that we're seeing and are experiencing both on the group side ... and the festive period extending between November and December," Chief Financial Officer Joan Bottarini said.
In addition to the signs of life from group and corporate travel, the company is also optimistic about a "fundamental change" in the seasonality of leisure travel, which has led to more resiliency for demand across Apple Leisure Group's all-inclusive resorts, Hoplamazian said.
"Some of the volumes that we saw were a welcome surprise from ALG Vacations and filled in some gaps they typically would've have seen in years past in late September into October because that leisure sustained," he said.
He said a rebound in group demand and corporate travel also defied typical seasonality patterns for the business.
"If you went back to 2017 — and even '18 and '19 — and said, 'What are the seasonal patterns here?' I think the third quarter is going to end up evening out a little bit relative to those historical trends," Hoplamazian said.
He said the Apple Leisure Group acquisition, which was completed almost exactly a year ago, continues to pay dividends for the company with a faster-than-expected ramp up in performance.
The company reported all-inclusive net package revenue per available room hit $176.61 in the quarter with average daily rate of $243.75.
He said the company also expects to continue to grow that resort portfolio, with 20 properties and 8,000 rooms in the pipeline.
"Our confidence that we'll be able to maintain our momentum is relatively strong," Hoplamazian said.
He said booking pace for ALG's resorts is up 30% compared to 2019, and 2023 is expected to be higher than 2022 with growth "up in the mid-teens." He noted the vast majority of that is coming via rate growth with very little guest pushback on higher prices.
He said as more people worry about economic uncertainty, it seems like the cost structure of all-inclusive resorts "is a wonderful antidote to that."
"Because it's a one-stop shop," he said. "You pay an amount you are certain of. You don't walk into a vacation and have no idea of how much it's going to end up costing you."