Stephen Grambling: Helpful color. A lot more to dig into there, but I’ll jump back into queue. Thank you.
Mark Hoplamazian: Thanks.
Operator: Our next question comes from Joe Greff from JPMorgan. Please go ahead. Your line is open.
Joe Greff: Good morning, everybody. Mark and Joan, I think you touched on this a little bit. Maybe I’ll ask it differently in terms of maybe how your capital allocations evolve post additional asset sales from here. And then is there much in the way of M&A in terms of brands or tuck-in acquisitions? And then the Juniper Hotel stake, which is like $5 per share for Hyatt, not insignificant, are your plans to hold that or plans to monetize that over time? And then I have a follow up.
Mark Hoplamazian: Maybe I’ll just start, and Joan – I mean, Joan already stated that our capital allocation strategy has not changed. We’re still prioritizing investing in the business. We’re being very disciplined about it. I think our track record sort of speaks for itself without trying to sound arrogant about it. And sorry about that. But I think we’ve done a good job of the deals that we have executed against and we’ve executed well post-acquisition. So I think we’ve done well there. That’s why we think it’s reasonable for us to allocate capital where it makes sense. We’re not biased, I would say. We’re very disciplined. We won’t do deals that are too thin or net negative just for the sake of, I don’t know, posting higher net rooms growth or something like that.
That’s not what we’re doing. We’re trying to create much more shareholder value. We – and we have a significant pipeline, and that pipeline growth continues to grow. And our first quarter net rooms growth for the quarter was – almost everything was pipeline – was openings out of our pipeline. We had a tiny conversion percentage in the first quarter. So the pipeline is not to be forgotten. With respect to what’s out there, yes, there are some brand opportunities. They tend to be more narrow. And so we are seeing some activity in that regard, and – but they’re not – they’re going to be fewer and further between. It’s just not a very large universe of things that would make sense for us. Having said that, we’re not aware of everything that’s going on around the world because we make it our business to know it and we continue to pursue things that do include brand platform and management opportunities.
I can tell you that 100% of the things that we’re looking at right now are either fully asset-light. The vast majority, if you look at proportionally, is 100% asset-light, or in the one or two cases where there may be assets involved, we have a very good line of sight for what we would do with the assets. So we do not plan to end up being – going backwards in terms of our asset intensity for any extended period of time whatsoever.
Joe Greff: Okay. And then with respect to your outlook for this year, I guess maybe from an EBITDA perspective, how do you see it by quarter just so that estimates are sort of in a position or spot that’s consistent with how you’re viewing quarterly results? Obviously, I know that the full year has been maintained, which is great, but that would probably be helpful for everybody on this call.
Mark Hoplamazian: Yes. So by the way, Joe, I forgot to answer your – or comment on your question about Juniper. So let me just quickly cover that. We’re obviously thrilled with the IPO. The company itself has done remarkable – has done us a remarkable service over the years by helping us grow in India in a very good way with high quality assets. And by the way, that business and the management team there see more opportunities to grow. So it’s sort of an opportunity to have a stake in a company that is going to continue to look for opportunities to help us continue to grow in India. And that’s our expectation. India is at a very interesting time. First quarter results across the country were staggering, over 20% RevPAR growth.
It is on fire, and the supply growth has been muted. So the outlook is really strong. And the – I would say our management team and the leadership of our partner’s organization, they are extremely well placed in terms of identifying and getting abreast of opportunities in the marketplace for potential acquisitions of other hotels. Now, as to our intentions with respect to our stake, 75% of our stake is locked up for one year and the remaining 25% is locked up for three. So what I will tell you is that over time, we do expect that we will lighten up our — and sell down our stake, but I can’t comment on exactly what the timing of that would be. I think we’re going to keep track of it and look into this and stay closer to it as we get past these lockup dates.
But it’s a very strong business. It’s now delevered and has lots of acquisition capacity and a superb management team. So we’re really happy with where we stand at the moment. With respect to the outlook for the remainder of the year, there’s some incredible things that I think are just continuing to fire on all cylinders. Business transient, frankly, in the first quarter, into the second quarter is extraordinarily encouraging. Our business transient hotels were up 15%, 15 – almost 16% in the first quarter. Convention hotels were up about 11%, just as a hotel type. New York City was up 19%. San Jose and Seattle really going strong. Why? Because technology transient, business transient was up 30% in the first quarter. These numbers are staggering and we just see continued strength in business transient.
And I would make special note of the fact that 100% of those reference points I just gave you was in the U.S. – were in the U.S. On the group side, this is a multi-year, the gift that we’ll keep on giving. Our pace is up 7 for the remainder of this year, but we’re up double digits for each of ’25 and ’26. Something in the 11% to 12% range for each of those two years with 50% of our business in ’25 on the books already and 30% of our business – expected business on the books in ’26 already. Both numbers are higher than where we would expect it to be on a normalized basis. So the demand is very strong. And into ’27 even, we’re up in the mid-single digits with something like 17% of our business on the books. These are numbers that are quite remarkable, and I think we are extremely well positioned to continue to benefit from very strong group.
And then finally, leisure. Leisure has been consistently strong. Yes, there are certain markets like Maui, which is still affected given the storm, and Lahaina. And we have two major hotels, two large hotels rather, that are under extensive renovation, both actually being rebranded to Grand Hyatt’s at this time. So big investments being made by our partners, our owners in those hotels. So you have to adjust out those properties to really get a sense for what the market is. And the U.S. resort base in the first quarter was up 6%, and we already mentioned that our all-inclusives were up 11 with good pace into the second quarter. So I look across the board. I look at across the geographies, and I see many, many points of proof that this is going to be a solid year.
Yes, the elections will negatively impact the DC area and travel in November and fourth quarter. It’s also true that the Olympics will positively affect the second quarter – third quarter rather, sorry, and – in Europe, so – but leave those outliers aside for a second. And of course we have to mention Taylor Swift who continues to grow GDP for the world now. So she is having an effect on every market in which she shows up. So I just see – I see a lot of data and a lot of data points, and I can’t remember when we’ve seen all three segment – business segments going so well. Now inflation’s higher. Yes, it’s going to negatively impact people’s ability to spend. We’re very sensitive to that and not particularly happy about that. And it’s – the fact is – but the reality is, for us, we’re serving a higher end customer and the impact of interest rates that seem sticky down and higher – somewhat higher inflation are just not – they’re not having an impact on our customer base, nothing that we can see at this point.
So that’s maybe a tour around our customer base and a little bit around the world.
Operator: Our next question comes from Richard Clarke from Bernstein. Please go ahead. Your line is open.
Richard Clarke: Hi, thanks for taking my questions. Maybe just first on the Easter impact on Q1. You gave us the U.S. impact. Just wondering maybe you can comment on what you think the global impact would be. And if you sort of unpick that into Q2, maybe all else being equal, would you expect RevPAR to accelerate into Q2 from Q1 as Easter reverses?
Joan Bottarini: Richard, the global impact is not a material number. We don’t see a material impact from the holiday on a global basis. Certainly in the U.S., there is because of different travel patterns that people take around spring break and the Easter holiday. April will benefit on the reverse side for group and business transient in the month of April, which we’ve seen and quoted in our prepared remarks. So we certainly see the reverse, particularly in the U.S.
Richard Clarke: Okay. That makes sense. And I know you’ve taken a couple of questions on buybacks already, but just wondering about the sizing of the increase that you’ve done up to the $800 million. It feels like you’ve done half of Q1. Is this the limit? How have you got to that number? Is that just the disposals done in Q1? And as you actually get the cash in for Zurich et cetera, can we look forward to a bigger buyback increase later this year?
Joan Bottarini: Sure. As we provide outlook each quarterly earnings call, we’re doing that without incorporating future transactions. So as we looked at the increase that we would undertake in our buyback outlook, our shareholder return outlook, we saw the increased proceeds and evaluated about 50% of those would be excess cash that we could clearly return and increase our outlook. As we proceed throughout the year, we’ll continue to update you. We have some transactions in process and as opportunities are evaluated and whether we execute on those, if we generate additional excess cash flow, we’ll update you on any new shareholder return outlook that we have.
Richard Clarke: Very clear. Thank you very much.
Joan Bottarini: You’re welcome.
Operator: Our next question comes from Meredith Jensen from HSBC. Please go ahead. Your line is open.
Meredith Jensen: Yes, hi. I noticed the – or you had in the press release, 22% increase in the loyalty program, which is huge. I was wondering if there’s any particular sort of driver of that high increase and would that be something that we should sort of expect as a trend increase? And related to that, what may we see sort of that trend increase show in the financials? I guess it would just be co-brand or engagement. And secondly, just very quickly, if – on Mr & Mrs Smith, you mentioned building the deeper relationship directly as time goes on. So I was wondering as that evolves over time, how we might track that sort of – what kind of metrics could we use and how would those show up in the financials over time in terms of profitability of that relationship? Thank you.
Mark Hoplamazian: Sure. A couple of comments on the World of Hyatt. We have continuously tuned and refined the program to be very attractive to the core customer base that we serve. And I think that when you cumulate all of those moves that we’ve made over a number of years, including our portfolio shifts, we’ve doubled our luxury hotels over the last five years, seven years now, tripled the number of resorts and quintupled the number of lifestyle resorts, all at the high end. The choice that’s available through Hyatt, even though we are the smallest of the major players, when you talk about the relevant base of hotels that members really want to be able to travel to, we’ve grown disproportionately in those which are in the highest demand.
And so when you look at it as a total corporate strategy, this is all very deliberate to continue to build what we call network effects. The result of network effect is higher direct bookings from our members through Hyatt channels, which are the cheapest channels available. And therefore, our relative performance in terms of delivering margins to our hotel owners will continue to improve with that as the tailwind. That in turn drives growth because the better that we can do at hotel level performance, the more capital that we will attract to our platform from diverse owners around the world. I think the fact is that if you look at our pipeline expansion over the last couple of quarters, that’s just proof that we’ve got momentum in that area.
On the portfolio front, we also launched an upper mid-scale hotel, extended stay hotel brand last year called Hyatt Studios; again, a very deliberate move to increase the network effect for markets in which we saw our members traveling to, but not staying at a high property because there was no high property there. Turning to Mr & Mrs Smith, we are just elated. I saw the statistics two days ago. Thousands of room nights booked in – at the – upon opening of the channels at very high rates and actually quite diverse. Yes, the vast majority are in Europe because that’s where the critical mass is for Mr & Mrs Smith, but I was surprised to see a number of U.S. markets in which there were very, very unique hotels in markets in which we are underrepresented or not represented.
So I am surprised, frankly, to see that much traction this quickly. And I think it’s very clear based on the owner feedback, the hotel owner feedback in the Mr & Mrs Smith network that they are likewise very happy and maybe a bit surprised at the traction that we’ve gained already. I think over time, what that will likely lead to is a subset of the hotel owners recognizing that a more fulsome connection with Hyatt, the Hyatt network through a franchise arrangement will make sense for them. And we have every expectation that we will be segmenting that hotel portfolio to pursue just that. So we’re really excited about that, and our measure is driving performance for those hotel owners. That’s our key measure. Of course, that will help to build more direct connectivity and a more, I guess, known and durable network over time.
Meredith Jensen: That’s awesome. Thank you so much.
Operator: Our next question comes from Patrick Scholes from Truist Securities. Please go ahead. Your line is open.
