Analyst Note| Dan Wasiolek |
Inflation pressures have yet to squash Hyatt’s travel demand, evidenced by its revenue per available room, or revPAR, reaching 94% of 2019 levels in May, up from 91%, 85%, and 75% in April, March, and the first quarter, respectively. Further, leisure and business transient bookings for June through August are at 105% of prepandemic marks. Encouragingly, our thesis that 2022 travel demand will broaden out to business trips from leisure excursions, which led the industry’s initial recovery, appears to be playing out. In this vein, Hyatt’s leisure revenue remained at record levels in May, reaching 118% of 2019 levels. Meanwhile, group sales achieved 88% of prepandemic marks in May, up from 86%, 75%, and 57% in April, March, and last quarter, respectively. We also are constructive on Hyatt’s pricing power, showcased by its May average daily rate coming in at 108% of 2019's level, which supports its brand intangible asset (source of its narrow moat).