Hyatt Hotels Corporation · NYSE:H
Hyatt Hotels — Investor Day (May 2023)
34 slides from Hyatt Hotels's investor day presentation, May 11, 2023
Slide 1: 2023 Investor Day
2023 Investor Day S E C R E TS M O XC H É A N D S E C R E TS I M P R E S S I O N M O XC H É , M E XI C O H Y A T T A N D R ELAT E D M AR K S A R E T R AD EM AR KS O F H Y AT T C OR POR AT I ON O R I T S A F F I LI AT E S. © 2 0 23 H Y AT T C OR POR AT I O N . A LL R I GH T S R ES ER VED .
Slide 2: Welcome & Opening
WELCOME & OPENING NOAH HOPPE | SVP, INVESTOR RELATIONS AND FP&A S E C R E TS M O XC H É A N D S E C R E TS I M P R E S S I O N M O XC H É , M E XI C O H Y A T T A N D R ELAT E D M AR K S A R E T R AD EM AR KS O F H Y AT T C OR POR AT I ON O R I T S A F F I LI AT E S. © 2 0 23 H Y AT T C OR POR AT I
Slide 3: Disclaimers
DISCLAIMERS Forward-Looking Statements Forward-Looking Statements in this presentation, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about our plans, strategies, outlook
Slide 4: Agenda
AGENDA OPENING | No ah Ho p p e , SVP Inve sto r Re latio ns and FP&A THE NEW HYATT | Mark Ho p lamazian, Pre sid e nt & CEO Mark Ho p lamazian, Pre sid e nt & CEO | Ro d rig o Llag uno , Gro up Pre sid e nt, POWER OF THE ALG PLATFORM | Unlimite d Vacatio n Club | Ray Snisky, Gro up Pre sid e nt, AL
Slide 5: Speakers
SPEAKERS Thomas Mark Joan Pritzker Hoplamazian Bottarini EXECUTIVE PRESIDENT & CHIEF EVP & CHIEF CHAIRMAN EXECUTIVE OFFICER F I N AN C I AL OF F I CER Margaret Mark Ray Rodrigo Egan Vondrasek Snisky Llaguno EVP GENERAL EVP & CHIEF GROUP PRESIDENT, GROUP PRESIDENT , COUNSEL & COMMERCIAL OFFICER ALG V
Slide 6: Hyatt Yesterday
HYATT YESTERDAY 2009 H o t e ls a s o f 2 0 0 9 Hotels 399 Hotel Rooms 120K Sub- Markets ~270 Pipeline Rooms 27K 2009 2009 2009 2009 F i gures are as of f i s c al y ear end 2009. S ub -Ma r k e t s def i ned by S mi t h T rav el Res earc h as T rac t s bas ed on Dec embe r 2022 S T R c ons en s us
Slide 7: Hyatt Today
HYATT TODAY 2022 + PIPELINE H o t e ls a s o f 2 0 2 2 P i p e line H o t el s a s o f 2 0 2 2 T R I P L E D N U M B E R O F H O T E L S , N E A R LY T R I P L E D N U M B E R O F R O O M S & SUB- M ARKET S & QUADRUPL ED NUM BER OF PI PEL I NE ROOM S SINCE 2 0 0 9 Hotels 1,263 Hotel 304K Sub- ~700 P
Slide 8: The New Hyatt: Fee Based, Resilient, & Asset Light
THE NEW HYATT: FEE BASED, RESILIENT, & ASSET LIGHT MARK HOPLAMAZI AN | PRESI DENT & CHIEF EXECUTI VE OFFICER TH E D I WA C LU B B Y A LI LA , I N D I A 8
Slide 9: Hyatt: We care for people so they can be their best
HYATT We (“\~ for people so they can be their best.
Slide 10: Hyatt's Intentional Evolution
HYATT’S INTENTIONAL EVOLUTION YESTERDAY TODAY TOMORROW 2009 2022 2025 $60M ~$750M $473M F ree C as h F low † Free Cash Flow † Free C ash Flow † >1,500 1,263 399 H otels Hotels Hotels 37% 75% >80% As s et-Light Earnings M ix 1 A sset-Lig h t E arnings M ix Asset- Lig h t Ear nings Mix 1 A s s et
Slide 11: Decisive, Thoughtful Actions Since 2007 Position Hyatt as a High-Growth, Asset Light Company
DECISIVE, THOUGHTFUL ACTIONS SINCE 2007 POSITION HYATT AS A HIGH-GROWTH, ASSET LIGHT COMPANY PHASE 1: LAY THE GROUNDWORK PHASE 2: ACCELERATE GROWTH & ASSET-LIGHT EARNINGS MIX 2007 – 2016 2017-2022 Built Development Team Lead Industr y in Growth | Sell Owned Assets| Acquire Asset-Light Platfor ms Lau
Slide 12: Strategic Investments & Expansion of Brands Have Driven Loyalty & Preference
T H E B E E K MAN , N E W YO R K STRATEGIC INVESTMENTS & EXPANSION OF BRANDS HAVE DRIVEN LOYALTY & PREFERENCE ORGANI C BRANDS Select Luxury PLATFORM S LAUNCHED Service Wellbeing ACQUI RED Luxury / Lifestyle Lifestyle All-Inclusive All-Inclusive LOYALTY PROGRAM RELAUNCH + DATA & DIGITAL INVESTM ENT S
Slide 13: Driving a Culture of Agility & Speed
WE’RE TRANSFORM ING HOW WE WORK Outcome-Centricity DRIVING A CULTURE OF Experimentation: Create, Test, Learn, and Adjust Rapidly AGILITY & Push Decision Making Down SPEED Cross-Functional Collaboration and Decision-Making 13
Slide 14: A Fundamentally Different Company Today
AN D AZ B AL I , I N D O N E S I A Re su lting in ... A FUNDAMENTALLY DIFFERENT COMPANY TODAY Industry Leading Growth Strategic Investments in Driving a Culture of Transformation, Differentiation, & & Acquisitions Data, Digital, & Loyalty Agility & Speed Cash Flow Generation 14
Slide 15: Our Transformation Is Driving Value for Shareholders
OUR TRANSFORMATION IS DRIVING VALUE FOR SHAREHOLDERS… WE ARE MORE FEE BASED, ASSET LIGHT, CASH FLOW GENERATI VE, & RESILIENT >40% increase $473M in Adjusted EBITDA † + Net Deferrals + Net Free Cash Flow † generation in 2022, Financed Contracts in 2022, over 2019 1 new record by nearly 50% $2B ~$
Slide 16: And We're Outpacing the Industry
… AND WE’RE OUTPACING THE INDUSTRY SYSTEM-WIDE ROOMS VS 2017 FEE REVENUE VS 2017 PIPELINE VS 2017 LOYALTY MEMBERS VS 2017 +64 % +62 % +67 % +260 % +37% +31% +114% +22% +23% +21% +14% +15% +61% +8% +5% +15% S ourc e: P ubl i c f i l i ngs f or Hy at t Hot el s Corpor a t i o n , Hi l t on W orl dw i
Slide 17: Global Macro Trends & Strategic Investments Provide Continued Tailwinds
H Ô T E L D U P AL AI S B I AR R I T Z — T H E U N B O U N D C O L L E CT I O N B Y H YAT T , F R AN C E GLOBAL MACRO TRENDS & STRATEGIC INVESTMENTS PROVIDE CONTINUED TAILWINDS Strong Industry Strength and Resilience Resurgenc e of Group Explosive Growth & Conversion Opportunities Fundamentals Coinc
Slide 18: Hyatt's Portfolio Is Optimally Positioned
HYATT’S PORTFOLIO IS OPTIMALLY POSITIONED… 2022 ROOM S REVENUE M IX 1 2022 ADJUSTED EBITDA † M IX 2 BY SEGM ENT BY HOTEL TYPE ~20% ~25% ~8% ~60% ~60% ~15% ~12% Lux ur y , Lifes ty l e, Resor t Select Ser v ice Leisur e T r ansient Busines s T r ansient Gr oup Busines s / O ther Gr oup/Conv e n ti on
Slide 19: We Have the Right Strategy to Capitalize
OUR VISION: A WORLD OF UNDERSTAN D ING AND CARE OUR M ISSION: WE DELIVER DISTIN CT IVE EXPERIEN CES FOR OUR GUESTS OUR VALUES: EM PATHY, EXPERIM ENT AT IO N, INCLUSION , INTEGRIT Y, RESPECT, WELLBEING …WE HAVE THE RIGHT OUR STRATEGY M AXIMIZE OUR CORE BUSINESS I NTEGRATE NEW GROWTH PLATFORMS OPTIMIZ
Slide 20: Accelerating Our Transformation
ACCELERATING OUR TRANSFORMATION UNLOCKI NG VALUE AND DRIVING FREE CASH FLOW † A LILA FORT BISH ANGARH , IN DIA 20
Slide 21: Earnings from Acquisitions Have Doubled Earnings Lost from Dispositions Since 2017
EARNINGS FROM ACQUISITIONS HAVE DOUBLED EARNINGS LOST FROM DISPOSITIONS SINCE 2017… SOLD $3.8B NET ACQUIRED $3.6B REAL ESTATE ASSET-LIGHT PLATFORMS AT ~8X MULTIPLE AT >16X MULTIPLE ~$60M N et Finance d C ontrac t s ~$95M N et Deferr a ls A djuste d E B I TDA † ~$225M ~ $ 225M ~ $ 300M Ad juste d
Slide 22: Asset-Light Trajectory Decreases Capital Expenditures
H Y A TT R E G E N C Y TH E SSA LON IKI , G R E EC E … ASSET-LIGHT TRAJECTORY DECREASES CAPITAL EXPENDITURES ~$ 321M $ 201M 2017-2 01 9 Cap ital 2022 Cap ital Exp e nd iture s Ave rag e Exp e nd iture s A v erage Capi t al E x pendi t ur es c al c ul at e d f rom f i g u re s a s o f e a c h re s p
Slide 23: Resulting in Record Free Cash Flow
A LI LA K O TH A I F A R U M A LDI V E S , I N DO N E S IA …RESULTING IN RECORD FREE CASH FLOW † 473 Free Cash Flow † (In Millions, USD) Covid-19 Impacted 289 269 251 224 220 198 140 60 62 29 44 27 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 F i gures c al c ul at ed f
Slide 24: Fee Based, Asset Light, Cash Flow Generative, Resilient
ALILA U BU D, IN DON ESIA WE A RE MORE FEE BASED ASSET LIGHT CASH FLOW GENERATIVE RESILIENT … AND OUR JOURNEY IS NOT COMPLETE 24
Slide 25: Free Cash Flow Expected to Increase ~60% from 2022 to 2025
S C H L O S S R O XB U R G H E, U N I T E D K I N G D O M FREE CASH FLOW † EXPECTED TO INCREASE ~60% FROM 2022 TO 2025 DRIVEN BY OVER $1.2 BILLION IN FEE REVENUE Free Cash Flow † (In Millions, USD) 750 550 >80% Covid-19 473 Impacted 2025 Asset-Light 269 251 289 Earnings Mix Drives 198 224 220 stron
Slide 26: Capacity to Expand Sell-Down Commitment Beyond 2024
CAPACITY TO EXPAND SELL -DOWN COMMITMENT BEYOND 2024: ESTIMATED $2.6B-$3.2B IN OWNED ASSET VALUE REMAINING AFTER COMPLETION OF CURRENT SELL -DOWN COMMITMENT ~$300M 13x to 15x $3.9B to $4.5B Owned Hotel Adjusted EBITDA 1 Assum ed M ultiple Subtracti ng $ 1.3B Rem aining Dispositi on Com m itm en t by
Slide 27: Disciplined Approach to Acquisitions
DISCIPLINED APPROACH TO ACQUISITIONS WE WILL CONTINUE FOCUSING ON VALUE ACCRETIVE PLATFORMS WHILE RETURNING EXCESS CAPITAL TO SHAREHOLDERS Asset-Light Earnings Complementary or Adjacent Customer Base Significant Embedded & Prospective Growth Expands Geographic Footprint C AR ME L VAL L E Y R AN C H
Slide 28: Strategic Acquisitions
STRATEGIC ACQUISITIONS A DEEPER DIVE INTO HYATT’S TRANSFORMATI ON M I RA V A L A RI ZO N A RE S O RT A N D S P A , A R I ZO N A 28
Slide 29: Acquisitions Transform Hyatt Portfolio, Increase Guest Choice, Enhance Loyalty
Acq uire d Acq uire d Acq uire d Acq uire d 2017 2018 2021 2023 ACQUISITIONS TRANSFORM HYATT PORTFOLIO, INCREASE GUEST CHOICE, ENHANCE LOYALTY, AND DRIVE STRONG RESULTS 29
Slide 30: Leading in Luxury: Miraval
LEADING IN LUXURY M ir aval ex t end s our r eac h int o wellbeing & is d eeply valued by our m os t loyal To tal Re ve nue PAR $915 g ues t s (TRe vPAR) $487 ~$400M Acq uisitio n Price + De ve lo p me nt Cap Ex ~$35M $186 EBITDA PAR 2023E Ad juste d EBITDA † $110 45 % Wo rld o f Hyatt Ro o m Nig ht
Slide 31: Accelerating Growth: Two Roads Hospitality
ACCELERATING GROWTH 18 Two Road s Hos pit alit y is a hig h- g r owt h plat f or m em br ac ed by our m em ber s 12 ~$467M 10 Acq uisitio n Price ~$50M 2023E Fe e s 5 + ~$30M 43 % Wo rld o f Hyatt Estimate d Stab ilize d Pip e line Fe e s Ro o m Nig ht At time o f Acq uisitio n As o f Q1 2023 AL I L
Slide 32: Leading in All-Inclusive: ALG
LEADING IN ALL-INCLUSIVE A LG has been our ALG Re so rts (Ro o ms) 34 m os t t r ans f or m at ive ac q uis it ion $231M $2.7B 2022 Ad juste d EBITDA † Acq uisitio n Price + $94M 31 2022 Net Defer r als + 21 % $63M Wo rld o f Hyatt Ro o m Nig ht S E C R E T S C AP C AN A R E S O R T & S P A, 2022
Slide 33: Expanding Lifestyle Reach: Dream Hotel Group
EXPANDING LIFESTYLE REACH Dr eam Hot el G r oup ac q uis it ion br oad ens DHG Ho te ls our lif es t yle r eac h & 24 pr ovid es d if f er ent iated ex per ienc e f or our loyal m em ber s 12 ~$125M ~$12M Ac quisition Pric e Expec ted M anagem ent Fees 1 of Open Hotels Op e n Ho te ls Sig ne d Ag re
Slide 34: Our Acquisitions Drive Differentiation & Serve as a Platform for Long-Term Growth
S E C R E T S L AN Z AR O T E R E S O R T & S P A, S P AI N OUR ACQUISITIONS DRIVE DIFFERENTIATION & SERVE AS A PLATFORM FOR LONG -TERM GROWTH >50K ~20K Luxury, Life style , o r Re so rt Pip e line Ho te l Ro o ms >$500M ~8X Stab ilize d Earning s Ag g re g ate Earning s Multip le Co ntrib utio n Es