Hyatt Hotels Corporation (NYSE:H) Q3 2023 Earnings Call Transcript

Conor Cunningham : Appreciate the thoughts. I’ll keep it in mind. Thank you.

Operator: Our last question today will come from Smedes Rose from Citi. Please go ahead. Your line is open.

Smedes Rose: Hi, thanks for squeezing me in. And I just wanted to ask you, you mentioned higher than expected labor costs in the third quarter. I think it’s an open portfolio and I just wondering how you’re thinking about the pace of wage and benefit increases into next year. And then Mark, you mentioned the royalty penetration increased 100 pips year-over-year. And I just wondering where to where did that stand in the quarter as a percent of occupancy.

Joan Bottarini : So Smedes, maybe I’ll just take on the own labor cost. Yes, we have seen incremental labor costs over the past really past 18 months, varying by market. And, the impact to the own portfolio that I reviewed, and went through as far as what our compounded growth rate has been, we are really proud of how our teams have been managing those costs and productivity to the productivity at strong levels in relation to what we’re seeing on the wage inflation side. Just add a little bit more color as far as the labor costs, what we what we saw in the own portfolio, is we saw a very high increase in volume. So if you look at the total revenue base, compared to RevPAR, our non-room revenue, our food and beverage revenue grew by twice as much as RevPAR.

So that’s a lot of incremental volume into our outlets and into our banquet services. And also our occupancy as a percentage of our RevPAR growth in the own portfolio was significant as well. So that incremental volume leads to incremental labor needs. And frankly, it gives us an opportunity as we look forward to manage the productivity as we have been doing. So we will continue to focus our efforts there that seems to be doing a great job. But as we return to 2019 demand levels in those hotels, we have opportunities to continue to focus on the productivity side. And I would just reiterate that our 100 to 300 basis point expectation relative to 2019 stands we’re up over 500 basis points in the quarter. And we expect to end up in the full year well at the high end of the range of our expectation to 2019.

Mark Hoplamazian : And with respect to the world of high penetration, we’re in the mid-40s about 45% penetration at this point.

Smedes Rose: Thank you, guys. Appreciate it.

Operator: This concludes today’s conference call. Thank you for participating and have a wonderful day. You may all disconnect.