Hyatt Hotels Corporation

04/30/2026 | Press release | Distributed by Public on 04/30/2026 11:41

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
This Quarterly Report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about the Company's plans, strategies, and financial performance, and prospective or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance, or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would," and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and pace of economic recovery following economic downturns; global supply chain constraints and interruptions, rising costs of construction-related labor and materials, and increases in costs due to inflation or other factors that may not be fully offset by increases in revenues in our business; risks affecting the luxury, resort, and all-inclusive lodging segments; levels of spending in business, leisure, and group segments, as well as consumer confidence; declines in occupancy and average daily rate ("ADR"); limited visibility with respect to future bookings; loss of key personnel; domestic and international political and geopolitical conditions, including political or civil unrest or changes in trade policy; the impact of global tariff policies or regulations; economic sanctions or other government restrictions that may limit our ability to conduct business or receive payments; hostilities, or fear of hostilities, including the ongoing military conflict in the Middle East and security-related disruptions in Mexico, as well as terrorist attacks or other acts of violence, that affect travel; travel-related accidents; natural or man-made disasters, weather and climate-related events, such as hurricanes, earthquakes, tsunamis, tornadoes, droughts, floods, wildfires, oil spills, nuclear incidents, and global outbreaks of pandemics or contagious diseases, or fear of such outbreaks; the impact of government-issued travel advisories, airspace closures, or flight suspensions on international arrivals and hotel bookings in affected regions; our ability to successfully achieve specified levels of operating profits at hotels that have performance tests or guarantees in favor of our third-party owners; the impact of hotel renovations and redevelopments; risks associated with our capital allocation plans, share repurchase program, and dividend payments, including a reduction in, or elimination or suspension of, repurchase activity or dividend payments; the seasonal and cyclical nature of the real estate and hospitality businesses; changes in distribution arrangements, such as through internet travel intermediaries; changes in the tastes and preferences of our customers; relationships with colleagues and labor unions and changes in labor laws; the financial condition of, and our relationships with, third-party owners, franchisees, and hospitality venture partners; the possible inability of third-party owners, franchisees, or development partners to access the capital necessary to fund current operations or implement our plans for growth; risks associated with potential acquisitions and dispositions and our ability to successfully integrate completed acquisitions with existing operations or realize anticipated synergies; failure to successfully complete proposed transactions, including the failure to satisfy closing conditions or obtain required approvals; our ability to maintain effective internal control over financial reporting and disclosure controls and procedures; declines in the value of our real estate assets; unforeseen terminations of our management and hotel services agreements or franchise agreements; changes in federal, state, local, or foreign tax law; increases in interest rates, wages, and other operating costs; foreign exchange rate fluctuations or currency restructurings; risks associated with the introduction of new brand concepts, including lack of acceptance of new brands or innovation; general volatility of the capital markets and our ability to access such markets; changes in the competitive environment in our industry, industry consolidation, and the markets where we operate; our ability to successfully grow the World of Hyatt loyalty program and manage the Unlimited Vacation Club paid membership program; cyber incidents and information technology failures; outcomes of legal or administrative proceedings; and violations of regulations or laws related to our franchising business and licensing businesses and our international operations.
These factors are not necessarily all of the important factors that could cause our actual results, performance, or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors could also harm our business, financial condition, results of operations, or cash flows. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and we do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
The following discussion should be read in conjunction with the Company's condensed consolidated financial statements and accompanying Notes, which appear elsewhere in this Quarterly Report.
Overview
Our portfolio of properties consists of full service hotels and resorts, select service hotels, all-inclusive resorts, and other properties, including timeshare, fractional, and other forms of residential and vacation units. We also offer distribution and destination management services through ALG Vacations and distribution services through Mr & Mrs Smith, a boutique and luxury global travel platform. Additionally, we provide certain reservation and/or loyalty program services to hotels that are unaffiliated with our hotel portfolio and operate under other trade names or marks owned by such hotels or licensed by third parties. The following table summarizes our portfolio of properties:
Properties at March 31, Rooms at March 31,
2026 2025 Change 2026 2025 Change
System-wide hotels
Managed (1) 580 551 29 5.3 % 167,119 161,725 5,394 3.3 %
Franchised 792 739 53 7.2 % 142,371 132,262 10,109 7.6 %
Owned and leased (2) 22 22 - - % 7,928 7,927 1 0.0 %
Total (3) 1,394 1,312 82 6.3 % 317,418 301,914 15,504 5.1 %
System-wide all-inclusive resorts
Managed (1) 148 131 17 13.0 % 56,580 50,012 6,568 13.1 %
Franchised - 8 (8) (100.0) % - 3,153 (3,153) (100.0) %
Owned and leased (2) 6 9 (3) (33.3) % 1,262 2,257 (995) (44.1) %
Total 154 148 6 4.1 % 57,842 55,422 2,420 4.4 %
Total system-wide (4) 1,548 1,460 88 6.0 % 375,260 357,336 17,924 5.0 %
Mr & Mrs Smith (5) 1,272 1,127 145 12.9 % 42,843 37,089 5,754 15.5 %
Hyatt Vacation Club 22 22 - - % 1,997 1,997 - - %
Residential 44 40 4 10.0 % 4,903 4,306 597 13.9 %
(1) Includes properties that we manage or provide services to.
(2) Figures do not include unconsolidated hospitality ventures.
(3) Figures do not include all-inclusive properties.
(4) Figures do not include Hyatt Vacation Club, Mr & Mrs Smith, and certain residential units.
(5) Represents unaffiliated Mr & Mrs Smith properties available through hyatt.com, which are not reflected in the system-wide figures above.
We report our consolidated operations in U.S. dollars. Amounts are reported in millions, unless otherwise noted. Percentages may not recompute due to rounding, and percentage changes that are not meaningful are presented as "NM." Constant dollar disclosures used throughout Management's Discussion and Analysis of Financial Condition and Results of Operations are non-GAAP measures. See "-Key Business Metrics Evaluated by Management" for further discussion.
During the three months ended March 31, 2026, we revised our definition of Adjusted EBITDA to no longer include our pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA, and we recast prior-period results to provide comparability. The revised definition is consistent with information provided to our CODM. See "-Key Business Metrics Evaluated by Management" for an explanation of how we utilize Adjusted EBITDA, why we present it, and material limitations on its usefulness, as well as a reconciliation of our net income attributable to Hyatt Hotels Corporation to Adjusted EBITDA.
Additionally, during the fourth quarter of 2025, we amended our co-branded credit card agreement with a third party, and as of the effective date of the amendment, the co-branded credit card programs were integrated into our loyalty program. Prior to the integration, certain amounts related to our co-branded credit card programs were recognized in other revenues, other direct costs, and general and administrative expenses on our condensed consolidated statements of income. Following the integration into the loyalty program, these amounts are recognized in revenues for reimbursed costs and reimbursed costs on our condensed consolidated statements of income. License fee revenues continue to be recognized within franchise and other fees.
Overview of Financial Results
Consolidated revenues increased $30 million, or 1.8%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Gross fee revenues and revenues for reimbursed costs increased $26 million and $59 million, respectively, primarily driven by higher revenues and improved operating performance at our existing properties as well as growth of our hotel portfolio compared to the three months ended March 31, 2025. Distribution revenues decreased by $41 million, compared to the three months ended March 31, 2025, driven by lower booking volumes, in part due to reduced travel demand to certain destinations following security-related incidents in Mexico and Hurricane Melissa in Jamaica.
Comparable system-wide hotels Revenue per Available Room ("RevPAR") for the three months ended March 31, 2026 was $143.04, which represented a 5.4% improvement compared to the three months ended March 31, 2025 in constant dollars. Comparable system-wide all-inclusive resorts Net Package RevPAR for the three months ended March 31, 2026 was $284.36, which represented a 7.4% increase compared to the three months ended March 31, 2025 in reported dollars. See "-RevPAR and Net Package RevPAR Statistics" for further discussion.
During the three months ended March 31, 2026, leisure transient RevPAR improved driven by strong leisure transient travel across Asia Pacific and the United States compared to the three months ended March 31, 2025. Group RevPAR improved driven by strong resort performance in the Americas (excluding United States) as well as the impact of the Winter Olympics in Europe. Business transient RevPAR improved driven by strong performance from United States full service and select service properties as well as ASPAC (excluding Greater China). At March 31, 2026, group booking pace for April through December 2026 at our comparable full service managed hotels in the United States is up 4.7% compared to the same period in 2025.
During the three months ended March 31, 2026, we reported $38 million of net income attributable to Hyatt Hotels Corporation, representing a $18 million increase, compared to the three months ended March 31, 2025, primarily driven by an increase in fee revenues and decreases in distribution expenses and provision for income taxes, partially offset by a decrease in distribution revenues. During the three months ended March 31, 2026, Adjusted EBITDA was $266 million, a $5 million increase compared to the three months ended March 31, 2025. See "-Results of Operations" and "-Segment Results" for further discussion.
RevPAR and Net Package RevPAR Statistics
Three Months Ended March 31,
Number of comparable hotels (2) RevPAR Occupancy ADR
vs. 2025 vs. 2025
2026 (in constant $) 2026 vs. 2025 2026 (in constant $)
Comparable system-wide hotels (1) 1,218 $ 143.04 5.4 % 67.7 % 1.5 % pts $ 211.39 3.2 %
United States 696 $ 143.41 3.3 % 66.2 % 0.2 % pts $ 216.76 3.1 %
Americas (excluding United States) 75 $ 206.48 6.4 % 69.7 % 2.5 % pts $ 296.36 2.6 %
Greater China 174 $ 91.01 12.4 % 70.2 % 4.9 % pts $ 129.63 4.6 %
Asia Pacific (excluding Greater China) 129 $ 172.21 11.3 % 76.1 % 3.8 % pts $ 226.35 5.8 %
Europe 102 $ 152.87 7.5 % 62.1 % 3.0 % pts $ 246.07 2.2 %
Middle East & Africa 42 $ 148.05 (3.9) % 62.0 % (5.3) % pts $ 238.91 4.4 %
(1) Consists of hotels that we manage, franchise, own, lease, or provide services to, excluding all-inclusive properties.
(2) During the three months ended March 31, 2026, we removed the following properties from comparable hotels: seven properties that left the hotel portfolio, three properties that were closed during the period, and one property that underwent a large-scale capital project.
RevPAR at our comparable system-wide hotels increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by strong leisure transient travel across Asia Pacific and the United States. During the three months ended March 31, 2026, Middle East & Africa was negatively impacted by geopolitical conflict in the Middle East.
Three Months Ended March 31,
Number of comparable resorts (3) Net Package RevPAR Occupancy Net Package ADR
vs. 2025 vs. 2025
2026 (in reported $) 2026 vs. 2025 2026 (in reported $)
Comparable system-wide all-inclusive resorts (1) 113 $ 284.36 7.4 % 83.3 % 0.7 % pts $ 341.43 6.5 %
Americas (excluding United States) 70 $ 308.32 7.5 % 84.0 % 1.3 % pts $ 367.15 5.9 %
Europe (2) 43 $ 170.83 6.0 % 80.0 % (2.0) % pts $ 213.53 8.7 %
(1) Consists of all-inclusive properties that we manage, lease, or provide services to.
(2) Certain resorts operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
(3) During the three months ended March 31, 2026, we removed two properties that were closed during the period from comparable resorts.
Net Package RevPAR at our comparable all-inclusive resorts increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, driven by higher Net Package ADR, despite reduced demand for travel to certain destinations following security-related incidents in Mexico.
Three Months Ended March 31,
RevPAR Occupancy ADR
Number of comparable hotels (2) vs. 2025 vs. 2025
2026 (in constant $) 2026 vs. 2025 2026 (in constant $)
Comparable owned and leased hotels (1) 22 $ 204.91 4.5 % 68.3 % 1.0 % pts $ 300.24 3.0 %
(1) Excludes unconsolidated hospitality ventures and all-inclusive leased properties.
(2) During the three months ended March 31, 2026, no properties were removed from comparable hotels.
RevPAR at our comparable owned and leased hotels increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by strong leisure transient demand.
Results of Operations
Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025
Consolidated Results
For additional information regarding our consolidated results, refer to our condensed consolidated statements of income included in this Quarterly Report.
The impact from our marketable securities held to fund our deferred compensation plans through rabbi trusts was recognized on the following financial statement line items and had no impact on net income:
Three Months Ended March 31,
2026 2025
Revenues for reimbursed costs $ (6) $ (6)
General and administrative expenses 12 12
Owned and leased expenses - -
Reimbursed costs 6 6
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts (12) (12)
Impact to net income $ - $ -
Fee revenues.
Three Months Ended March 31,
2026 2025 Better / (Worse)
Base management fees $ 127 $ 114 $ 13 10.9 %
Incentive management fees 86 76 10 13.8 %
Franchise and other fees 120 117 3 3.1 %
Gross fees 333 307 26 8.6 %
Contra revenue (23) (20) (3) (14.9) %
Net fees $ 310 $ 287 $ 23 8.2 %
Base and incentive management fees increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by new long-term management agreements with the third-party buyer of the Playa Hotels Portfolio and strong leisure transient demand. Incentive management fees also benefited from improved hotel performance in Asia Pacific, partially offset by the Americas (excluding United States) and Middle East & Africa in part due to reduced demand for travel following security-related incidents in Mexico, Hurricane Melissa in Jamaica, and the geopolitical conflict in the Middle East.
Franchise and other fees increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by franchise fees due to hotel performance in the United States and license fees, which benefited in part from our co-branded credit card programs, partially offset by franchise fees recognized in 2025 related to properties that are now subject to long-term management agreements with the third-party buyer of the Playa Hotels Portfolio.
Contra revenue increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, due to accelerated amortization of key money assets, partially offset by a payment made to a third-party owner and accrued performance cure payments in 2025.
Owned and leased revenues.
Three Months Ended March 31,
2026 2025 Better / (Worse) Currency Impact
Comparable owned and leased revenues $ 219 $ 207 $ 12 5.8 % $ 6
Non-comparable owned and leased revenues - 12 (12) (100.0) % 1
Owned and leased revenues $ 219 $ 219 $ - (0.1) % $ 7
Comparable owned and leased revenues increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by strong leisure transient travel.
Non-comparable owned and leased revenues decreased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by the sale of the shares of the entities that own three Alua properties in the fourth quarter of 2025.
Distribution revenues. During the three months ended March 31, 2026, distribution revenues decreased $41 million, compared to the three months ended March 31, 2025, driven by lower booking volumes, in part due to reduced travel demand to certain destinations following security-related incidents in Mexico and Hurricane Melissa in Jamaica.
Other revenues. During the three months ended March 31, 2026, other revenues decreased $11 million, compared to the three months ended March 31, 2025, driven by the integration of our co-branded credit card programs into the loyalty program in the fourth quarter of 2025.
Revenues for reimbursed costs.
Three Months Ended March 31,
2026 2025 Change
Revenues for reimbursed costs $ 945 $ 886 $ 59 6.7 %
Less: rabbi trust impact (1) 6 6 - 1.2 %
Revenues for reimbursed costs, excluding rabbi trust impact $ 951 $ 892 $ 59 6.6 %
(1) Amounts offset with the rabbi trust impact in reimbursed costs.
Revenues for reimbursed costs increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by higher reimbursements for payroll and related expenses at managed properties where we are the employer and an increase in reimbursed costs related to system-wide services provided to managed and franchised properties. The higher reimbursements for expenses were due to increased demand at our existing properties and portfolio growth.
General and administrative expenses.
Three Months Ended March 31,
2026 2025 Change
General and administrative expenses $ 130 $ 126 $ 4 3.7 %
Less: rabbi trust impact (1) 12 12 - 5.2 %
Less: stock-based compensation expense (25) (29) 4 10.4 %
Adjusted general and administrative expenses (2) $ 117 $ 109 $ 8 7.6 %
(1) Amounts offset with the rabbi trust impact in net gains (losses) and interest income from marketable securities held to fund rabbi trusts.
(2) See "-Key Business Metrics Evaluated by Management" for further discussion.
General and administrative expenses increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to credit loss reserves on certain receivables as well as payroll and related costs, which increased in part due to the Playa Hotels Acquisition.
Owned and leased expenses.
Three Months Ended March 31,
2026 2025 Better / (Worse)
Comparable owned and leased expenses $ 199 $ 183 $ (16) (7.9) %
Non-comparable owned and leased expenses 1 11 10 93.8 %
Rabbi trust impact (1) - - - (30.2) %
Owned and leased expenses $ 200 $ 194 $ (6) (2.3) %
(1) Amounts offset with the rabbi trust impact in net gains (losses) and interest income from marketable securities held to fund rabbi trusts.
Comparable owned and leased expenses increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to increased variable expenses at certain hotels, most notably payroll and related costs.
Non-comparable owned and leased expenses decreased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by the sale of the shares of the entities that own three Alua properties in the fourth quarter of 2025.
Distribution expenses. During the three months ended March 31, 2026, distribution expenses decreased $21 million, compared to the three months ended March 31, 2025, driven by lower booking volumes, in part due to reduced travel demand to certain destinations following security-related incidents in Mexico and Hurricane Melissa in Jamaica, as well as cost management strategies.
Other direct costs. During the three months ended March 31, 2026, other direct costs decreased $24 million, compared to the three months ended March 31, 2025, driven by the integration of our co-branded credit card programs into the loyalty program in the fourth quarter of 2025.
Transaction and integration costs. During the three months ended March 31, 2026, transaction and integration costs decreased $7 million, compared to the three months ended March 31, 2025, primarily due to transaction costs in 2025 related to the Playa Hotels Acquisition, partially offset by integration costs in 2026 related to the Playa Hotels Acquisition.
Depreciation and amortization expenses. During the three months ended March 31, 2026, depreciation and amortization expenses decreased $4 million compared to the three months ended March 31, 2025.
Reimbursed costs.
Three Months Ended March 31,
2026 2025 Change
Reimbursed costs $ 963 $ 902 $ 61 6.7 %
Less: rabbi trust impact (1) 6 6 - 1.2 %
Reimbursed costs, excluding rabbi trust impact $ 969 $ 908 $ 61 6.7 %
(1) Amounts offset with the rabbi trust impact in revenues for reimbursed costs.
Reimbursed costs increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by increased payroll and related expenses at managed properties where we are the employer and expenses related to system-wide services provided to managed and franchised properties. The higher expenses were due to increased demand at our existing properties and portfolio growth.
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts.
Three Months Ended March 31,
2026 2025 Better / (Worse)
Rabbi trust gains (losses) allocated to general and administrative expenses $ (12) $ (12) $ - (5.2) %
Rabbi trust gains (losses) allocated to owned and leased expenses - - - 30.2 %
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts $ (12) $ (12) $ - (4.0) %
Equity earnings (losses) from unconsolidated hospitality ventures.
Three Months Ended March 31,
2026 2025 Better /
(Worse)
Hyatt's share of unconsolidated hospitality ventures' net gains (losses) excluding foreign currency $ (12) $ (6) $ (6)
Other (1) (1) (6) 5
Equity earnings (losses) from unconsolidated hospitality ventures $ (13) $ (12) $ (1)
(1) Includes equity losses in both periods related to certain debt repayment guarantees.
Interest expense. During the three months ended March 31, 2026, interest expense decreased $1 million compared to the three months ended March 31, 2025.
Asset impairments. During the three months ended March 31, 2026 and March 31, 2025, we recognized $21 million and $4 million, respectively, of impairment charges related to intangible assets. See Part I, Item 1, "Financial Statements-Note 7 to our Condensed Consolidated Financial Statements" for additional information.
Other income (loss), net. During the three months ended March 31, 2026, other income (loss), net increased $7 million compared to the three months ended March 31, 2025. See Part I, Item 1, "Financial Statements-Note 18 to our Condensed Consolidated Financial Statements" for additional information.
Provision for income taxes.
Three Months Ended March 31,
2026 2025 Change
Income before income taxes $ 57 $ 52 $ 5 9.7 %
Provision for income taxes (16) (28) 12 46.2 %
Effective tax rate 27.0 % 55.1 % (28.1) %
Provision for income taxes and the effective tax rate decreased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to a tax benefit recognized in 2026 related to the settlement of an assumed tax liability that was triggered by the Playa Hotels Acquisition. Additionally, the decrease was driven by tax expense recognized in 2025 related to a foreign tax audit. See Part I, Item 1, "Financial Statements-Note 11 to our Condensed Consolidated Financial Statements" for additional information.
Segment Results
We manage our business within the following reportable segments: management and franchising, owned and leased, and distribution. We evaluate segment operating performance using segment revenues and Adjusted EBITDA. See Part I, Item 1, "Financial Statements-Note 16 to our Condensed Consolidated Financial Statements" for additional information, including a reconciliation of segment Adjusted EBITDA to income before income taxes.
Management and franchising segment.
Three Months Ended March 31,
2026 2025 Better / (Worse)
Gross fees (1) $ 342 $ 316 $ 26 8.4 %
Other revenues (1) - 11 (11) (100.0) %
Segment revenues (2) $ 342 $ 327 $ 15 4.8 %
(1) See "-Results of Operations" for further discussion regarding the increase in gross fee revenues and decrease in other revenues.
(2) Includes $9 million of intersegment revenues for both the three months ended March 31, 2026 and March 31, 2025.
Three Months Ended March 31,
2026 2025 Better / (Worse)
Segment Adjusted EBITDA $ 264 $ 236 $ 28 11.8 %
Adjusted EBITDA increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by increases in gross fee revenues, partially offset by increased general and administrative expenses, primarily due to credit loss reserves on certain receivables as well as payroll and related costs, which increased in part due to the Playa Hotels Acquisition. Additionally, the results of our co-branded credit card programs recognized in other revenues and other direct costs prior to the integration into the loyalty program in the fourth quarter of 2025 negatively impacted Adjusted EBITDA during the three months ended March 31, 2025.
Owned and leased segment.
Three Months Ended March 31,
2026 2025 Better / (Worse) Currency Impact
Segment revenues (1), (2) $ 223 $ 223 $ - (0.0) % $ 7
(1) See "-Results of Operations" for further discussion regarding the decrease in owned and leased revenues.
(2) Includes $4 million of intersegment revenues for both the three months ended March 31, 2026 and March 31, 2025.
Three Months Ended March 31,
2026 2025 Better / (Worse)
Segment Adjusted EBITDA (1) $ 10 $ 15 $ (5) (27.1) %
(1) See "-Results of Operations" for further discussion regarding the decrease in owned and leased revenues and increase in owned and leased expenses.
Distribution segment.
Three Months Ended March 31,
2026 2025 Better / (Worse)
Segment revenues (1) $ 274 $ 315 $ (41) (12.9) %
(1) See "-Results of Operations" for further discussion regarding the decrease in distribution revenues.
Three Months Ended March 31,
2026 2025 Better / (Worse)
Segment Adjusted EBITDA (1) $ 29 $ 49 $ (20) (41.9) %
(1) See "-Results of Operations" for further discussion regarding the decreases in distribution revenues and distribution expenses.
Key Business Metrics Evaluated by Management
Adjusted Earnings Before Interest Expense, Taxes, Depreciation, and Amortization ("Adjusted EBITDA")
We use the term Adjusted EBITDA throughout this Quarterly Report. Adjusted EBITDA, as we define it, is a non-GAAP measure. We define Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus net income (loss) attributable to noncontrolling interests, adjusted to exclude the following items:
•payments to customers (contra revenue), including performance cure payments and amortization of management and hotel services agreement and franchise agreement assets (key money assets);
•revenues for reimbursed costs;
•reimbursed costs that we intend to recover over the long term;
•stock-based compensation expense;
•transaction and integration costs;
•depreciation and amortization;
•equity earnings (losses) from unconsolidated hospitality ventures;
•interest expense;
•gains (losses) on sales of real estate and other;
•asset impairments;
•other income (loss), net; and
•benefit (provision) for income taxes.
We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA of each of our reportable segments and eliminations to unallocated overhead expenses.
Our board of directors and executive management team focus on Adjusted EBITDA as one of the key performance and compensation measures both on a segment and on a consolidated basis. Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations both on a segment and on a consolidated basis. Our Chairman, President and Chief Executive Officer, who is our CODM, also evaluates the performance of each of our reportable segments and determines how to allocate resources to those segments, in part, by assessing the Adjusted EBITDA of each segment. In addition, the talent and compensation committee of our board of directors determines the annual variable compensation and long-term incentive compensation for certain members of our management based in part on financial measures including and/or derived from consolidated Adjusted EBITDA, segment Adjusted EBITDA, or some combination of both.
We believe Adjusted EBITDA is useful to investors because it provides investors with the same information that we use internally for purposes of assessing our operating performance and making compensation decisions and facilitates our comparison of results with our prior-period and forecasted results as well as our industry and competitors.
Adjusted EBITDA excludes certain items that can vary widely across different industries and among companies within the same industry, including interest expense and benefit or provision for income taxes, which are dependent on company specifics, including capital structure, credit ratings, tax policies, and jurisdictions in which they operate; depreciation and amortization, which are dependent on company policies including how the assets are utilized as well as the lives assigned to the assets; contra revenue, which is dependent on company policies and strategic decisions regarding payments to hotel owners; and stock-based compensation expense, which varies among companies as a result of different compensation plans companies have adopted.
We exclude revenues for reimbursed costs and reimbursed costs which relate to the reimbursement of payroll costs and system-wide services and programs that we operate for the benefit of our hotel owners as contractually we do not provide services or operate the related programs to generate a profit or bear a loss over the long term. If we collect amounts in excess of amounts spent, we have a commitment to our hotel owners to spend these amounts on the related system-wide services and programs. Additionally, if we spend in excess of amounts collected, we have a contractual right to adjust future collections or expenditures to recover prior-period costs. These timing differences are due to our discretion to spend in excess of revenues earned or less than revenues earned in a single period to ensure that the system-wide services and programs are operated in the best long-term interests of our hotel owners. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively, and instead are designed to result in a cumulative break-even balance. Therefore, we exclude the net impact when evaluating period-over-period changes in our operating results. Adjusted EBITDA includes reimbursed costs related to system-wide services and programs that we do not intend to recover from hotel owners.
Finally, we exclude other items that are not core to our operations and may vary in frequency or magnitude, such as transaction and integration costs, asset impairments, unrealized and realized gains and losses on marketable securities, and gains and losses on sales of real estate and other.
Adjusted EBITDA is not a substitute for net income (loss) attributable to Hyatt Hotels Corporation, net income (loss), or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income or loss generated by our business. Our management compensates for these limitations by referencing our GAAP results and using Adjusted EBITDA supplementally. See our condensed consolidated statements of income in our condensed consolidated financial statements included elsewhere in this Quarterly Report.
See below for a reconciliation of net income attributable to Hyatt Hotels Corporation to Adjusted EBITDA.
Adjusted General and Administrative Expenses
Adjusted general and administrative expenses, as we define it, is a non-GAAP measure. Adjusted general and administrative expenses excludes the impact of deferred compensation plans funded through rabbi trusts and stock-based compensation expense. Adjusted general and administrative expenses assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations, both on a segment and consolidated basis. See "-Results of Operations" for a reconciliation of general and administrative expenses to Adjusted general and administrative expenses.
ADR
ADR represents hotel room revenues divided by the total number of rooms sold in a given period. ADR measures the average room price attained by a property, and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a property or group of properties. ADR is a commonly used performance measure in our industry, and we use ADR to assess the pricing levels that we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described below.
Comparable system-wide and Comparable owned and leased
"Comparable system-wide" represents all properties we manage, franchise, or provide services to, including owned and leased properties, that are operated for the entirety of the periods being compared and have not experienced business interruption or undergone large-scale capital projects during the periods being compared. Comparable system-wide also excludes properties for which comparable results are not available. We may use variations of comparable system-wide to specifically refer to comparable system-wide hotels or our all-inclusive resorts, for those properties that we manage, franchise, or provide services to within our management and franchising segment. "Comparable owned and leased" represents owned or leased hotels and/or all-inclusive resorts that are operated and consolidated for the entirety of the periods being compared and have not experienced business interruption or undergone large-scale capital projects during the periods being compared. Comparable owned and leased also excludes properties for which comparable results are not available. Comparable system-wide and comparable owned and leased are commonly used as a basis of measurement in our industry. "Non-comparable system-wide" or "non-comparable owned and leased" represent all properties, including those that do not meet the above definition of "comparable."
Constant Dollar Currency
We report the results of our operations both on an as reported basis, as well as on a constant dollar basis. Constant Dollar Currency, which is a non-GAAP measure, excludes the effects of movements in foreign currency exchange rates between comparative periods. We believe constant dollar analysis provides valuable information regarding our results as it removes currency fluctuations from our operating results. We calculate Constant Dollar Currency by restating prior-period local currency financial results at current-period exchange rates. These restated amounts are then compared to our current-period reported amounts to provide operationally driven variances in our results.
Net Package ADR
Net Package ADR represents net package revenues divided by the total number of rooms sold in a given period. Net package revenues generally include revenue derived from the sale of packages at all-inclusive resorts comprised of rooms, food and beverage, and entertainment revenues, net of compulsory tips paid to employees. Net Package ADR measures the average room price attained by a property, and Net Package ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a property or group of properties. Net Package ADR is a commonly used performance measure in our industry, and we use Net Package ADR to assess the pricing levels that we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described below.
Net Package RevPAR
Net Package RevPAR is the product of the Net Package ADR and the average daily occupancy percentage. Net Package RevPAR generally includes revenue derived from the sale of packages comprised of rooms, food and beverage, and entertainment revenues, net of compulsory tips paid to employees. Our management uses Net Package RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate property performance on a geographical and segment basis. Net Package RevPAR is a commonly used performance measure in our industry.
Net Package RevPAR changes that are driven predominantly by changes in occupancy have different implications for overall revenue levels and incremental profitability than do changes that are driven predominantly by changes in average room rates. For example, increases in occupancy at a property would lead to increases in net package revenues and additional variable operating costs, including housekeeping services, utilities, and room amenity costs. In contrast, changes in average room rates typically have a greater impact on margins and profitability as average room rate changes result in minimal direct impacts to variable operating costs.
Occupancy
Occupancy represents the total number of rooms sold divided by the total number of rooms available at a property or group of properties. Occupancy measures the utilization of a property's available capacity. We use occupancy to gauge demand at a specific property or group of properties in a given period. Occupancy levels also help us determine achievable ADR levels as demand for property rooms increases or decreases.
RevPAR
RevPAR is the product of the ADR and the average daily occupancy percentage. RevPAR does not include non-room revenues, which consist of ancillary revenues generated by a property, such as food and beverage, parking, and other guest service revenues. Our management uses RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate property performance on a geographical and segment basis. RevPAR is a commonly used performance measure in our industry.
RevPAR changes that are driven predominantly by changes in occupancy have different implications for overall revenue levels and incremental profitability than do changes that are driven predominantly by changes in average room rates. For example, increases in occupancy at a property would lead to increases in room revenues and additional variable operating costs, including housekeeping services, utilities, and room amenity costs, and could also result in increased ancillary revenues, including food and beverage. In contrast, changes in average room rates typically have a greater impact on margins and profitability as average room rate changes result in minimal direct impacts to variable operating costs.
The table below provides a reconciliation of net income attributable to Hyatt Hotels Corporation to Adjusted EBITDA:
Three Months Ended March 31,
2026 2025 Change
Net income attributable to Hyatt Hotels Corporation $ 38 $ 20 $ 18 102.7 %
Contra revenue 23 20 3 14.9 %
Revenues for reimbursed costs (945) (886) (59) (6.7) %
Reimbursed costs 963 902 61 6.7 %
Stock-based compensation expense (1) 27 31 (4) (10.6) %
Transaction and integration costs 16 23 (7) (27.2) %
Depreciation and amortization 76 80 (4) (5.7) %
Equity (earnings) losses from unconsolidated hospitality ventures 13 12 1 10.6 %
Interest expense 65 66 (1) (1.7) %
Asset impairments 21 4 17 390.1 %
Other (income) loss, net (50) (43) (7) (19.2) %
Provision for income taxes 16 28 (12) (46.2) %
Net income attributable to noncontrolling interests 3 4 (1) (29.2) %
Adjusted EBITDA $ 266 $ 261 $ 5 2.1 %
(1) Includes amounts recognized in general and administrative expenses and distribution expenses; excludes amounts recognized in transaction and integration costs.
Liquidity and Capital Resources
Overview
We finance our business primarily with existing cash, short-term investments, and cash generated from our operations. As part of our long-term business strategy, we use net proceeds from dispositions and certain investments to pay down debt as necessary to maintain our investment-grade profile; support new investment opportunities, including acquisitions; and return capital to our stockholders, when appropriate. We may also borrow cash under our revolving credit facility or from other third-party sources and raise funds by issuing debt or equity securities. We maintain a cash investment policy that emphasizes the preservation of capital.
At March 31, 2026, we had $2,168 million of total liquidity, including $671 million of cash, cash equivalents, and short-term investments and $1,497 million of availability under our revolving credit facility, net of outstanding letters of credit.
We believe that our cash position, short-term investments, cash from operations, borrowing capacity under our revolving credit facility, and access to the capital markets will be adequate to meet all of our funding requirements and capital deployment objectives in both the short term and long term.
Sources and Uses of Cash
Three Months Ended March 31,
2026 2025 Change
Net cash provided by operating activities $ 100 $ 153 $ (53)
Net cash provided by (used in) investing activities (122) 239 (361)
Net cash provided by (used in) financing activities (174) 340 (514)
Cash flows from operating activities. During the three months ended March 31, 2026, cash flows from operating activities decreased, compared to the three months ended March 31, 2025, primarily due to a decrease in deferred revenue related to distribution and destination management services, an increase in payments for key money assets, and an increase in certain prepaid assets, partially offset by a decrease in cash paid for income taxes.
Cash flows from investing activities. During the three months ended March 31, 2026, cash flows from investing activities decreased, compared to the three months ended March 31, 2025, primarily due to a decrease in net proceeds from the sale of marketable securities and short-term investments. During the three months ended March 31, 2025, we temporarily invested the net proceeds from the issuance of the 2028 Notes and 2032 Notes in marketable securities.
Cash flows from financing activities. During the three months ended March 31, 2026, cash flows from financing activities decreased, compared to the three months ended March 31, 2025, primarily due to proceeds from the issuance of the 2028 Notes and 2032 Notes, which were used to finance the Playa Hotels Acquisition, partially offset by the repayment of the 2025 Notes.
Capital Expenditures
We routinely make capital expenditures to enhance our business primarily through renovations at our owned properties, investments in technology, and other capital projects. We have been, and will continue to be, disciplined with respect to our capital spending, taking into account our cash flows from operations. During the three months ended March 31, 2026, capital expenditures decreased $7 million, compared to the three months ended March 31, 2025, primarily driven by lower investments in technology and renovation spend.
Sources of Liquidity
At March 31, 2026, we had $4.3 billion of total debt outstanding, of which $605 million is due in the short term. Interest on our Senior Notes is payable semi-annually. Our total debt, excluding finance lease obligations, unamortized discounts, and unamortized deferred financing fees, had a weighted-average interest rate of 5.3% and a weighted-average maturity of approximately 4 years. At March 31, 2026, we were in compliance with all applicable covenants under the indenture governing our Senior Notes.
Our revolving credit facility is intended to provide financing for working capital and general corporate purposes, including commercial paper backup and permitted investments and acquisitions. At March 31, 2026, we had no balance outstanding, and we were in compliance with all applicable covenants under the revolving credit facility.
We issue letters of credit either under our revolving credit facility or directly with financial institutions. At March 31, 2026, we had $111 million in letters of credit issued directly with financial institutions outstanding. These letters of credit mature on various dates through 2027 and had weighted-average fees of approximately 92 basis points.
See Part I, Item 1, "Financial Statements-Note 9 and Note 12 to our Condensed Consolidated Financial Statements" for additional information.
Capital Return to Stockholders
During the three months ended March 31, 2026, we returned $149 million of capital to our stockholders through $135 million of share repurchases and $14 million of dividend payments. At March 31, 2026, we had approximately $543 million remaining under the share repurchase program. See Part I, Item 1, "Financial Statements-Note 13 to our Condensed Consolidated Financial Statements" for additional information.
Critical Accounting Policies and Estimates
Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures in our condensed consolidated financial statements and accompanying Notes. We have disclosed those estimates that we believe are critical and require complex judgment in their application in our 2025 Form 10-K. At March 31, 2026, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them as previously disclosed in Item 7 to Part II of our 2025 Form 10-K.
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