Hyatt (H) Q1 2026 Earnings Call Transcript

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DATE

Thursday, April 30, 2026 at 10 a.m. ET

CALL PARTICIPANTS

• Chairman, President, and Chief Executive Officer — Mark Hoplamazian
• Chief Financial Officer — Joan Bottarini
• Senior Vice President, Investor Relations and Global FP&A — Adam Rohman

TAKEAWAYS

• System-wide RevPAR Growth -- 5.4% increase globally, driven by luxury brands and premium leisure demand.
• United States RevPAR -- 3.3% growth, led by full-service hotels and strong March resort performance.
• International RevPAR -- Over 8% increase, with Greater China up 12% and Asia Pacific excluding Greater China up 11% due to leisure and inbound travel.
• Middle East and Africa RevPAR -- Declined by approximately 4%, attributed to regional conflict.
• All-Inclusive Portfolio Net Package RevPAR -- 7.4% increase, despite late-quarter security concerns in Mexico.
• Business Transient RevPAR -- Rose 2.4%, indicating continued demand for business travel.
• Group RevPAR -- Nearly 4% year over year global increase, with United States group RevPAR up 1.2% amidst tough comps.
• World of Hyatt Membership -- 66 million members at quarter end, marking an 18% increase; loyalty members represented nearly half of occupied rooms.
• Net Rooms Growth -- 5% achieved, matching internal expectations.
• Development Pipeline -- Reached approximately 151,000 rooms, up over 9%; essentials brand pipeline up nearly 25%.
• Gross Fees -- 9% increase to $333 million, supported by portfolio growth and Playa management agreements.
• Incentive Fees -- 14% growth, primarily from international markets.
• Owned and Leased Segment Adjusted EBITDA -- Declined by about $2 million after asset sale adjustments.
• Distribution Segment Adjusted EBITDA -- Decreased due to temporary Jamaican closures, lower Mexico demand, and softer four-star performance.
• Total Liquidity -- $2.2 billion as of March 31, including $1.5 billion available on the revolving credit facility.
• Shareholder Returns -- $149 million returned through $135 million in repurchases and dividends; $543 million authorized for future repurchases.
• Full-Year Outlook: RevPAR Growth -- Raised to 2%-4% globally; United States expected at 2%-3%, with international slightly higher.
• Full-Year Outlook: Net Rooms Growth -- Anticipated at 6%-7% with momentum from new brands and conversions.
• Full-Year Outlook: Gross Fees -- Increased to 9%-11% growth, or $1.305–$1.335 billion.
• Full-Year Outlook: Adjusted EBITDA -- 13%-18% growth anticipated; $1.155–$1.205 billion range.
• Distribution Segment Full-Year Decline -- Forecast to decrease $25 million versus prior year, with $15 million impact in Q2 from Mexico security disruptions.
• Full-Year Outlook: Adjusted Free Cash Flow -- Maintained at $580–$630 million, or 20%–30% annual growth and ≥50% EBITDA conversion.
• Capital Return Guidance -- Projected $325–$375 million to shareholders via repurchases and dividends in 2026.
• Asset Sales Activity -- Progress made on Hyatt Grand Central New York sale goal for 2026, while three other intended transactions (Andaz London and two smaller hotels) were terminated due to deal-specific factors.
• Market Exposure Detail -- Mexico constitutes 10% of gross fees while the Dominican Republic and Jamaica represent 6% and 1%, respectively.
• Quarterly Regional Variance -- March RevPAR in Mexico fell 5% but Dominican Republic was up 16%, reflecting shift from Mexico due to security.

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RISKS

• Joan Bottarini said, "RevPAR in the Middle East is expected to be down significantly compared to last year, impacting fees by approximately $10 million for the balance of the year."
• Joan Bottarini noted, "we do not expect to see the same level of growth for the remainder of the year compared to the first quarter due to the disruptions from the security concerns in February."
• Adjusted EBITDA in the distribution segment expected to decline $25 million for the year, "including $15 million in the second quarter from the impact of the security concerns in Mexico."
• Joan Bottarini stated, "RevPAR in the Middle East and Africa declined by approximately 4% compared to last year due to the conflict in the Middle East."

SUMMARY

Hyatt Hotels Corporation (NYSE:H) reported quarterly results showing fee-driven strength and outsized international growth, particularly in China and Asia Pacific, while luxury and premium leisure segments led demand gains. New hotel signings and a record pipeline supported net rooms growth and guided for even higher expansion in coming quarters. Development momentum across essentials and lifestyle brands underpinned internal projections for full-year room and fee growth rates that exceeded prior targets. The call highlighted the resilience of World of Hyatt engagement, with program members accounting for nearly half of global occupied rooms and outspending nonmembers by a factor of two. Strategic capital allocation remained unchanged, reflected in ongoing share repurchases, disciplined asset sales, and a healthy liquidity profile.

• The pace of group bookings in U.S. cities hosting FIFA World Cup events is up by mid-teens percentages, supporting robust summer expectations.
• Hoplamazian emphasized, "If there is any sign of weakness at the high end, we have not seen it," referencing double-digit luxury segment RevPAR growth and five index points of share gain.
• Bottarini stated, "G&A that we posted in the first quarter was a little bit higher than our expectations, mostly due to timing. For the last three quarters of the year, we expect lower G&A expense as well," pointing to anticipated margin improvements.
• Leadership outlined ongoing AI and data analytics initiatives to further enhance commercial capabilities and derive competitive advantage from technology.

INDUSTRY GLOSSARY

• RevPAR: Revenue per available room, a standard industry performance metric calculated by dividing total room revenue by the number of available rooms.
• Net Package RevPAR: Revenue per available room from all-inclusive packages, reflecting both occupancy and average rate for all-inclusive resorts.
• Gross Fees: Total recurring fees earned from managing, franchising, or licensing hotels, before deductions for incentives or contra-items.
• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, as adjusted for items such as asset sales or one-time impacts, aligned with company-specific definitions.
• Distribution Segment: The business segment primarily comprised of packaged vacation sales and operated under the Apple Leisure Group brand, including ALGV (ALG Vacations).
• World of Hyatt: Hyatt’s proprietary loyalty program, offering member benefits and points redemption options across the global portfolio.

Full Conference Call Transcript

Operator: Good morning and welcome to the Hyatt First Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, star and one. As a reminder, this conference call is being recorded. I would now like to turn the call over to Adam Rohman, Senior Vice President of Investor Relations and Global FP&A. Thank you. Please go ahead.

Adam Rohman: Thank you. Welcome to Hyatt Hotels Corporation’s first quarter 2026 earnings conference call. Joining me on today's call are Mark Hoplamazian, Hyatt Hotels Corporation’s Chairman, President, and Chief Executive Officer, and Joan Bottarini, Hyatt Hotels Corporation’s Chief Financial Officer. Before we start, I would like to remind everyone that our comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our Annual Report on Form 10-Ks, Quarterly Reports on Form 10-Q, and other SEC filings. These risks could cause our actual results to be materially different from those expressed in or implied by our comments.

Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. In addition, you can find a reconciliation of non-GAAP financial measures referred to in today's remarks under the Financials section of our Investor Relations website and in this morning's earnings release. An archive of this call will be available on our website for 90 days. Additionally, we posted an investor presentation on our Investor Relations website this morning containing supplemental information.

Please note that unless otherwise stated, references to occupancy, average daily rate, and RevPAR reflect comparable system-wide hotels on a constant currency basis, and closed hotels in Jamaica are excluded from comparable metrics in 2026. Percentage changes disclosed during the call are on a year-over-year basis unless otherwise noted. With that, I will now turn the call over to Mark.

Mark Hoplamazian: Thank you, Adam, and good morning, everyone. We appreciate you joining us today. Before I begin, I want to acknowledge recent events in the Middle East. We are closely monitoring the evolving situation and remain in regular contact with our hotel teams who have done a remarkable job of managing operations during trying times. I am extremely grateful for the professionalism and care with which my colleagues have conducted themselves throughout. The quarter also saw isolated security concerns in Mexico, and Hyatt Hotels Corporation colleagues, guests, and our hotels were thankfully unaffected. Safety of our guests and colleagues remains our top priority, and I am proud of the care and resilience that our teams continue to demonstrate.

At times like these, our purpose—to care for people so they can be their best—continues to guide our actions. Turning to operating results. This morning, we reported first quarter system-wide RevPAR growth of 5.4%. Performance exceeded our expectations, driven by continued strength in our luxury brands globally. RevPAR growth in the United States was ahead of expectations, and we saw strong growth across most international markets. Leisure demand from premium customers was exceptionally strong in the quarter, increasing approximately 7% compared to last year, with the strongest demand realized by our luxury brands. Business and group travel was also solid, with business transient RevPAR up 2.4% in the first quarter, and group RevPAR up nearly 4% compared to last year.

Our core fee business remains durable, and our diverse global portfolio has proven resilient in the face of demand fluctuations, including certain macro and geopolitical disruptions. Differentiated brands continue to deliver results over the long term and reinforce our position as a preferred brand portfolio for guests. We continue to see this preference reflected in our World of Hyatt loyalty program. We ended the first quarter with approximately 66 million members, an increase of 18% compared to the first quarter of last year, and World of Hyatt members accounted for nearly half of total occupied rooms globally during the quarter. World of Hyatt success goes beyond scale. We are focused on generating higher value demand.

When our members stay with us, they spend nearly twice as much compared to a nonmember, highlighting the engagement from our premium customer base. The value proposition of our loyalty program continues to resonate with our members, enhancing Hyatt Hotels Corporation’s attractiveness to owners and developers. Development activity during the quarter was very strong. We ended the first quarter with a record development pipeline of approximately 151 thousand rooms, up more than 9% compared to the first quarter last year. We continue to see strong interest in our newest brands, with owners recognizing the value of our brands and the strength of our commercial engine.

In the first quarter, we signed a number of new franchise agreements across Hyatt Studios, Hyatt Select, and Unscripted by Hyatt brands in the United States and have many more in discussion. In total, the pipeline for new hotels in our essentials brand group increased nearly 25% compared to 2025. Outside the United States, our development engine is strong, with significant signings activity during the quarter. We are seeing broad interest across our brand portfolios throughout the world, reinforcing our confidence in our ability to drive durable, capital-efficient fee growth over the long term. We achieved net rooms growth of 5% for 2026, in line with our expectations as we lapped a quarter of outsized openings last year.

We had several notable openings in our lifestyle brands, including the Andaz Lisbon, which strengthens our lifestyle brand presence in Europe; Andaz Shanghai ITC, a luxurious and modern addition to our already strong brand presence in Greater China; and The Livingston, our first hotel in Brooklyn, New York. These openings reflect our continued focus on expanding our portfolio in high-demand markets with differentiated offerings, with many exciting additions to our lifestyle portfolio slated to open in 2026, further strengthening our position as a leader in lifestyle offerings at scale. We also continue to see strong momentum in our essentials brands, entering seven new markets during the quarter.

This included the expansion of our upper midscale portfolio, with several Eurocove by Hyatt openings, as well as the third Hyatt Studios property in the United States. These brands are an important driver of our growth strategy, allowing us to expand our brand footprint in markets where we have significant white space, while also offering attractive economic returns to owners. We expect our net rooms growth to accelerate over the course of the year as we benefit from meaningful opportunities to convert hotels into our system along with openings from our pipeline.

Now shifting to an update on transactions, we continue to make progress on the plan to sell Hyatt Grand Central New York and could be in a position to close that transaction in 2026 if various closing conditions are satisfied. We will continue to provide updates on this transaction as we reach key milestones. During the quarter, we elected to terminate the purchase and sale agreement for the sale of the Andaz London Liverpool Street. And separately, we are no longer under contract for two other properties that were previously signed. Our decisions not to move forward were specific to the individual assets and reflect our continued discipline around pricing and terms.

To be clear, our broader plans for additional asset sales and our confidence in the transaction market remain unchanged. We remain active in the market and are in discussions regarding certain assets to further realize value from our owned portfolio. Our approach remains consistent with our previous track record: ensuring we realize attractive values when we sell hotels, ensuring we execute transactions in a disciplined manner that retains the sold properties within our portfolio, and increasing shareholder value. As we look forward into 2026 and beyond, I am confident about our future. We have significant competitive advantages that drove the strength in our core business in the first quarter.

We are focused on elevating Hyatt Hotels Corporation so we can respond faster, innovate more, and perform at a higher level in an increasingly dynamic environment. At its core, elevating Hyatt Hotels Corporation and maximizing our potential comes down to three integrated areas working together: our brands, our talent, our technology. Increasing brand equity is a key component of how we drive value for our stakeholders. Our sharpened brand focus strengthens differentiation, enhances the guest experience, and drives stronger performance across our portfolio. This makes Hyatt Hotels Corporation that much more attractive to owners and developers, supporting our expectations for long-term growth and growing free cash flow.

Brands create the most value when they are executed consistently, and that comes down to our people. We are focused on developing leaders who can execute at a high level while continuing to innovate as enabled by our culture. We have built an organization grounded in quality, responsiveness, performance, and continuous improvement. Strong brands and great teams perform best when enabled by the right data and the right technology that we are leveraging to uncover deeper insights. These insights will allow us to better engage with our guests, support our colleagues, and enable faster, more informed decision making. We navigated a very dynamic quarter with several events requiring speed and responsiveness that our colleagues handled exceptionally well.

I am proud of our colleagues around the world who live our purpose every day, which I truly believe allowed us to deliver such strong quarterly results. I will now turn the call over to Joan to provide more details on the quarter. Joan, over to you.

Joan Bottarini: Thank you, Mark, and good morning, everyone. In the first quarter, RevPAR exceeded our expectations, increasing 5.4% compared to last year, driven by strong demand across our global portfolio and continued strength of the high-end traveler. In the United States, RevPAR increased 3.3% compared to last year. Performance was led by our full-service hotels, which benefited from strong leisure demand, including at our resorts, which had a particularly strong March. Group RevPAR was up 1.2% in the face of more difficult comparisons in Washington, D.C., due to the January 2025 presidential inauguration. We also saw improvements in select-service RevPAR, which increased 1.8%, led by business transient demand.

Outside the United States, RevPAR growth was even stronger, increasing over 8%, reflecting robust international travel demand. Greater China grew RevPAR over 12% in the quarter, supported by improved domestic leisure demand, particularly during the Lunar New Year holiday in February, along with improved international inbound travel, including from the United States. Asia Pacific excluding Greater China RevPAR increased over 11%, driven by strong inbound travel and demand across key markets. Europe continued to perform well with RevPAR growth of 7.5%, supported by strong leisure travel and solid group demand. RevPAR in the Middle East and Africa declined by approximately 4% compared to last year due to the conflict in the Middle East.

Net package RevPAR in our all-inclusive portfolio increased 7.4% compared to last year despite the security concerns in Mexico beginning in late February. Overall, our first quarter results reflect strong demand for premium leisure travel globally and a healthy commercial travel backdrop. Turning to our financial results, our core fee business continued to perform well in the first quarter, supported by our top-line performance, hotel-level profitability, increasing scale, and the quality of our portfolio. Gross fees increased approximately 9% to $333 million, driven by strong performance across our managed portfolio, fees from newly opened hotels, and the newly structured management agreements from the Playa portfolio. We also grew incentive fees approximately 14%, reflecting solid hotel-level profitability, particularly in international markets.

In the first quarter, owned and leased segment adjusted EBITDA declined by approximately $2 million, adjusted for the impact of asset sales. Distribution segment adjusted EBITDA declined versus the prior year due to temporary factors, including the closure of hotels in Jamaica because of Hurricane Melissa and lower demand in Mexico due to security concerns. The distribution segment was also impacted by lower demand for four-star properties, a dynamic we have shared that will take time to return to previous levels as travel spend improves for this consumer segment. Overall, adjusted EBITDA for the quarter reflects the strength of our core fee business.

As of March 31, we had total liquidity of approximately $2.2 billion, including $1.5 billion of capacity on our revolving credit facility. In the first quarter, we repurchased $135 million of Class A common stock, returning approximately $149 million to shareholders through share repurchases and dividends. We ended the quarter with $543 million remaining under our share repurchase authorization. We remain committed to our investment grade profile, and our balance sheet is strong. Looking ahead to the rest of 2026, we are operating in a dynamic environment that varies from region to region. RevPAR in the Middle East is expected to be down significantly compared to last year, impacting fees by approximately $10 million for the balance of the year.

Pace for our all-inclusive resorts in the Americas is up in the low single digits in the second quarter due to lower demand in Mexico. While we expect positive net package RevPAR growth in the Americas, we do not expect to see the same level of growth for the remainder of the year compared to the first quarter due to the disruptions from the security concerns in February. Overall, these disruptions are expected to have a modest impact to results. We are increasingly positive about the outlook for the United States.

Forward booking trends in the United States are strong for the balance of 2026, with group pace for full-service hotels up in the mid-single digits for the remainder of the year. We continue to hear positive feedback from our group and corporate customers about their intent to travel this year, and we expect the strong leisure trends to continue. We are also seeing improved select-service trends as we lap easier comparisons starting in the second quarter. Outside of the United States, we also expect performance in Greater China and the rest of Asia to be very strong in the balance of 2026.

We believe the improved performance in the United States supports increasing our full-year system-wide RevPAR growth outlook to between 2% to 4%. RevPAR in the United States could grow between 2% to 3% for the full year, reflecting the improved trends I just reviewed. We expect moderately higher growth in international markets compared to the United States overall, but growth will be lower compared to our expectations last quarter primarily due to the impact of the conflict in the Middle East. We expect net rooms growth of 6% to 7% for the full year, with continued momentum behind our new brands driving another year of strong organic growth.

We are raising our gross fees outlook for the full year and expect fees to grow between 9% to 11% to a range of $1.305 to $1.335 billion. We are maintaining our full-year adjusted EBITDA outlook range, and we expect adjusted EBITDA to grow at a strong rate of 13% to 18% to a range of $1.155 to $1.205 billion. This outlook reflects stronger performance in our core fee business, offset by revised expectations for the Distribution segment, which we believe will decline by approximately $25 million for the full year compared to 2025, including $15 million in the second quarter from the impact of the security concerns in Mexico.

We are maintaining our adjusted free cash flow outlook for the full year in the range of $580 million to $630 million, an increase of between 20% to 30%. This reflects a conversion of adjusted EBITDA to adjusted free cash flow of at least 50% for the full year. Finally, we expect to return between $325 million and $375 million of capital to shareholders for the full year through share repurchases and dividends. For 2026, we expect global RevPAR growth of around 3%, which reflects solid growth in the United States, including the start of the FIFA World Cup in June, and continued strength in international markets except for the Middle East.

Gross fees could grow in the mid-single digit range in the second quarter compared to last year. We expect adjusted EBITDA for the second quarter to be up in the mid-single digits compared to what we reported in 2025 after removing $17 million of pro rata JV EBITDA, consistent with our updated definition, and $14 million of owned and leased adjusted EBITDA for the period of ownership of the Playa portfolio. Please refer to Schedule A-9 in this morning's earnings release for the 2025 adjusted EBITDA baseline by quarter, which excludes pro rata share of JV EBITDA and asset sales that were completed last year. In closing, our first quarter results reflect the strength of our core fee-driven earnings.

Our results demonstrate the performance of our brands and the resilience of our premium customer base across brands and geographies in the face of a dynamic operating environment. As we look ahead, we remain confident in our ability to deliver continued growth supported by our strong pipeline, differentiated brand portfolio, and disciplined approach to capital allocation. We believe we are well positioned to navigate a dynamic environment, continuing to deliver meaningful long-term value for our shareholders. This concludes our prepared remarks.

Operator: We will now open the call for questions. To ask a question, please press star followed by the number one on your telephone keypad. To withdraw your question, please press star one again. Please limit questions to one per analyst. Our first question comes from Lizzie Dove with Goldman Sachs. Your line is open.

Lizzie Dove: Hi, good morning. Thanks for taking the question. We have seen, obviously, this really meaningful positive shift in the U.S. demand dynamic. There has been some talk of the K-shaped economy, but it also seems like your higher-end customer is still doing very, very well. Could you unpack a little more about what you are seeing in real time, what is embedded in that 2% to 3% you raised to in the U.S. in terms of business and leisure, and how you expect that to shape up throughout the year?

Joan Bottarini: Sure, Lizzie. We had a result in the first quarter that exceeded our expectations. Leisure transient in the quarter in the U.S. alone was up 4%, and group RevPAR being up 1.2%, with the comparison we had to the inauguration last year, was a strong result. And even more in excess of our expectations was that select-service RevPAR was strong, and that was driven by improving business transient. All of those trends that we saw that were in excess of our expectations are reflected in our outlook for the second quarter and the rest of the year.

I mentioned that we expect the U.S. in the second quarter to be between 2% to 3% growth, helped in part by the group business we are seeing from FIFA in June, which will carry over into July a bit too. For the full year, we believe we have a strong and reasonable expectation given what we are seeing. I mentioned group up in the mid-single digits for the remainder of the year in the U.S., and while business transient and leisure transient booking windows are still modest, we feel really confident about our outlook now for the U.S.

Mark Hoplamazian: I will just add a couple of comments, Lizzie. Thanks for the question, and good morning. First, on the group front, we have, sequentially over the last approximately nine months, grown group share, and our RevPAR realization has steadily increased over that period of time. Part of that has to do with a new approach in terms of how we go to market, and that reflects the quality and the positioning of the groups that we are actually attracting differentially. Secondly, whether you look at STR chain scales or you look at the luxury brand group that we have defined for ourselves, they were the strongest RevPAR growth segments in our portfolio.

Looking at our luxury brand group, for example, we were up in the double digits in RevPAR growth in the first quarter, and we also had the most expansive index growth—almost five points of market share increase in the first quarter. If there is any sign of weakness at the high end, we have not seen it. We are playing the game differently and are focused on the clients that we serve and how we go to market, and I think our relative performance is a reflection of that.

Operator: Your next question comes from the line of Stephen Grambling with Morgan Stanley. Your line is open.

Stephen Grambling: Hey. Thank you. I wanted to turn to the distribution segment a little bit. Recognizing that you had some one-off things impacting it, how should investors think about the drivers of this segment longer term? And separately, do you still see synergies from this business within the overall Hyatt Hotels Corporation portfolio, or is this more of a stand-alone at this point?

Mark Hoplamazian: Thank you, Stephen. First of all, the way we think about the business is that it has been hit by a couple of isolated issues that have had an obvious impact, and you heard our outlook for the year. There is some FX in that as well, but a lot of it is the change in volumes that relate to Jamaica being largely shut down relative to the core bookings that we had last year into Jamaica before Hurricane Melissa, and secondly, the Mexican security concerns. I would say that we view both of those as isolated. We see more opportunities than risks—absolutely yes. They derive from two things.

One is that, in the same way that we have revamped how we go to market in certain areas within our core business, we have done the same in relation to ALG Vacations, and we have an AI strategy roadmap for new capabilities that we are building that will make us more effective and more efficient and, I think, drive more volume. The platform itself is highly enabled to be able to serve others on a white-label basis, and we see growing opportunities in that domain because there are a lot of larger companies with large customer bases that are looking to offer more and different types of services to their customer base, and package travel is one key area.

We see really significant opportunity. Having said all of that, the principal reason we own this business is because of its interface and integration with HIC, the Hyatt Inclusive Collection, because it is still a significant revenue generator for that business. It strategically serves a purpose of giving us greater visibility into things like lift. We buy, I would hazard a guess, in excess of $1 billion—probably more like $1.5 billion—of airline seats every year as part of the packages. We therefore have extremely close relationships with all the carriers as well as charter operators. That visibility gives us a lot to go on in terms of how we forecast and what the outlook looks like for each market.

So there is a strategic rationale. It does fit with the Inclusive Collection. If that were not true, I am not sure that we would own this business, but it is true, so we own it. We are not looking at this as just a cog in the wheel; we are looking at it as a real business with real opportunity in the future.

Joan Bottarini: The only thing I would add to what Mark just said is that structurally about half of the business serves five-star locations and half of the business serves four-star locations. When you think about the performance of our portfolio and the demand that we saw despite security concerns in Mexico, there was redirection of a lot of that business into other locations. That has benefited our portfolio. On the temporary side, with respect to four-star, after the disruption in late February and into March, we are seeing pickup stabilize and grow.

For the second half of the year, we are seeing the impact from the first quarter and the second quarter get much better, particularly into the third and fourth quarters of this year.

Mark Hoplamazian: While we are on this topic, I want to provide a couple of pieces of data for context. In terms of gross fees, Mexico represents about 10% of our total gross fees, the Dominican Republic represents about 6%, and Jamaica represents about 1%. As we talk about these markets, it is important to understand the relative size. Secondly, the Hyatt Inclusive Collection had positive RevPAR growth across Mexico and the Dominican Republic. Jamaica is still widely disrupted, so we will leave that out. Mexico was up 3% and the Dominican Republic was up 11% for the quarter. Where you saw the massive change was March: Mexico was down 5%, but the Dominican Republic was up 16%.

That is a direct reflection of the channel shift that we play a big role in because we are the largest tour operator in North America, cascading business that was not going to Mexico because of security concerns into the Dominican Republic. That is a hard data point that demonstrates the strategic value that ALGV provides to the business.

Operator: Your next question comes from the line of Michael Bellisario with Baird. Your line is open.

Michael Bellisario: Thanks. Good morning, everyone. Mark, on the demand front and your big-picture outlook—taking those together—how are you thinking about or sensitizing the potential range of outcomes with macro uncertainties like higher gasoline, higher airline ticket prices, and reduced flight capacity? Are you seeing anything in the booking pace that gives you pause?

Mark Hoplamazian: Thanks. Not at the moment. We are very sensitive to what is happening with airfares because airlines will have to adjust their fares to accommodate fuel price increases. The biggest issue is the persistency of the current situation. Overnight last night, oil moved quite a lot, and there is a danger in making predictions off of momentary policy positions that participants in the war might be taking. If there is a persistence of higher oil prices and those keep going up, I think the biggest hit in terms of demand will be among lower-income households. That is true across retail as well as hospitality. That is where a disproportionate amount of the pain will be felt.

Airfares have already gone up—depending on the market, between 5% to 10%, maybe a little higher in certain markets—and that has not really affected our volumes. They have shifted, as I just described, but volumes have not been affected. This goes back to the client base we have. We are not serving primarily lower household incomes, relatively speaking. It is concentrated in higher-income households and also households that have financial assets and investments in the stock market. So there is a buttress. We do not see any significant demand shifts at this point, but we are paying close attention because ever-escalating oil prices and inflation will have an impact at some level.

Operator: Your next question comes from the line of Richard Clarke with Bernstein. Your line is open.

Richard Clarke: Thanks for taking my questions. I want to follow up on some of the Caribbean dynamics. In the full-year results, you had the Jamaica hotels reopening by the end of this year. It looks like that is going to move to early 2027. What impact does that have on this year's numbers? And on Mexico, are you seeing demand normalizing now, and will Mexico be back to normal levels of demand beyond the second quarter?

Joan Bottarini: Richard, regarding Jamaica, we have removed Jamaica for this year, so the impact to 2026 is nothing greater than what we have presented in our EBITDA and fee outlook. We provided a walk during our investor presentation in the fourth quarter on that specifically. We will keep you posted as far as reopening and our expectations in 2027. With respect to Mexico, we are seeing a moderating of the impact that we saw in late February and into March. We feel good about what we are seeing in the last couple of weeks. Week on week, we are actually seeing pace getting better. As Mark mentioned, airline capacity has not increased, but airlines are managing this with load factors.

There is still quite a bit of demand going into these markets as we look out into future quarters. For the second half of the year, we feel good that we will be able to pick up, and our outlook overall is positive for the Caribbean and for our net package RevPAR in the Americas. Part of that is due to the improvement in Mexico, and part of that is due to redirection of travel into other markets where we have hotels.

Operator: Your next question comes from the line of Shaun Kelley with Bank of America. Your line is open.

Shaun Kelley: Hi, good morning everyone. Thanks for taking my question. I wanted to ask about some of your global expectations. Could you give a little more color on how you are thinking about the Middle East and Africa trending through the balance of the year? And then the offsets globally—whether Asia is seeing any redirected business now staying more in that market and not crossing over to Europe, or how you see some of those global puts and takes?

Joan Bottarini: I will start with what our outlook includes, Shaun, and then Mark may want to add on the macro. For the Middle East, what is built into our outlook is a more pronounced impact in the second quarter, which is embedded in our EBITDA outlook. We expect demand in the second quarter to be more impacted and then to improve in the second half of the year, sequentially quarter over quarter, getting closer to maybe flat by the end of the year. We will see, as it is very uncertain how this will evolve over the coming quarters, but that is what is embedded within our outlook. The one region that has been exceptionally strong is China.

I mentioned the RevPAR growth in the quarter of 12%, and the region overall excluding Greater China is up 11%. We are seeing strong results into April on a preliminary basis, so that region has exceeded our expectations. In China, we had the Lunar New Year holiday in the quarter, which always gives a boost, but we are also seeing groups slightly up and business transient about flat, so across all demand segments, China looks like a region we can continue to rely on for growth for the remainder of the year.

Mark Hoplamazian: The only region I would add commentary on is Europe, which was up 7.5% in the first quarter, stronger than we anticipated. There is more and more talk about economic fragility in Europe, especially around energy prices and their escalation. Again, this is an example where I think there will be a difference between how economy, budget, midscale performs in Europe versus full-service and luxury. We have a positive outlook in Europe for the remainder of the year. In 2022, I remember thinking 2023 would be Europe’s big breakout year—it turned out to be true. I thought 2024 could be good—it turned out to be great. In 2025, I thought it could not meet 2024, and it beat it.

Europe, at least for our portfolio, has been very resilient, and I have learned over the last three years that counting Europe out is a mistake. So we have a pretty positive outlook on Europe.

Operator: Your next question comes from the line of Smedes Rose with Citi. Your line is open.

Smedes Rose: Hi. Thanks. I appreciate all the color around Mexico and the Middle East. Switching gears, you commented at the beginning of the call about terminating your sale of the Andaz in London and not moving forward with a couple of other asset sales. Could you provide more color on what broke those deals? And how are you thinking about the transaction environment overall? Is it getting more favorable relative to your last call or this time a year ago? Would you like to complete additional asset sales as we move through the balance of the year?

Mark Hoplamazian: Sure. Thank you for the question, Smedes. With respect to the Liverpool Street property, for those who do not know, the hotel sits on top of rail lines that are part of Network Rail, the U.K.’s national rail system, and adjacent to the Liverpool Street Station. The redevelopment that we had a part in, with a developer coming together with the MTR from Hong Kong to redevelop the entirety of that site, had a number of conditions associated with it, including approvals from Network Rail that were not issued. We do not believe the opportunity is dead. We believe that the deal we had signed up does not have the authorities it needs to move forward.

I do not believe that means there will not be a redevelopment; I believe it will take a different shape. We remain in very close contact with all the parties involved, and I am optimistic. It is a great location and a great hotel market, adjacent to some of the biggest businesses in the City of London—literally across the street from them. We have great corporate drivers, and the hotel has a great reputation as a social event destination. I am very optimistic we can find our way to a different type of deal, but it will take more time for Network Rail to make additional decisions about sequencing of that project.

In the meantime, the hotel is performing very well, so we are getting paid to wait, so to speak. We will not do the redevelopment; we will only participate by way of selling the property into a redevelopment plan. We are not going to undertake a mass redevelopment in the City of London. The other hotels were relatively small deals. We mentioned a few calls ago that we have a few hotels that we would put in the category of portfolio cleanup. They happen to be on leased property—ground leases the hotels operate on—so they are not material. We ended up with market-specific reasons why we elected not to proceed with two properties that we had previously signed.

We believe that the markets will perform well this year, we will get paid to wait, and we will look to put another deal together in the future. Finally, yes, we are working on other opportunities to execute additional asset sales. When I mentioned our plans with respect to asset sales and our outlook on the transaction market remain unchanged, what that means is our intention to continue to sell properties, and I do think that the market for property sales is much more constructive this year than it was last year.

Operator: Your next question comes from the line of Duane Pfennigwerth with Evercore. Your line is open.

Duane Pfennigwerth: Hey, thanks for taking the question. There was low single-digit EBITDA growth in the first quarter, and it sounds like mid-single digits in the second quarter. Could you walk us through the building blocks of why we would get so much acceleration in the back half?

Joan Bottarini: Sure. Looking at the core business, we have been performing strongly and anticipate continuing to perform, including our net rooms growth expectations. When you look at total-year RevPAR and total-year net rooms growth, that leads to very strong fee growth for the year. In the second half, the distribution segment will recover, with better performance particularly in the fourth quarter because we are experiencing easier comps in that quarter. There are a couple of factors related to those items built into the second half of the year. Structurally, we renegotiated the Playa contracts in the second half of last year, and we do not have the headwinds from the franchise fees we had in the first quarter.

That helps the pickup in fee growth into the second half. There are structural items, improvement in the distribution business that we are confident in, and the core business will remain strong going into the second half of the year. I would also mention, Duane, G&A that we posted in the first quarter was a little bit higher than our expectations, mostly due to timing. For the last three quarters of the year, we expect lower G&A expense as well.

Operator: Your next question comes from the line of Analyst with JPMorgan. Your line is open.

Analyst: Thank you. You spoke a little about general drivers of demand, but coming into the year we heard a lot about World Cup and America’s 250th. Has there been any change in the outlook as it impacts your business, especially in the peak summer season?

Mark Hoplamazian: There has been no change in the outlook; it is positive. The pace we are seeing into the cities that are hosting World Cup is very strong. New York is a significant driver because that is where the finals will be. July pace for New York is extremely strong. Interestingly, we have significant group business that is also pacing well ahead in those cities. It is not just transient, which is inherently shorter term and gives us lower visibility between now and the tournament, whereas our visibility on the group side is quite good. The pace increases for those markets are in the mid-teens in terms of group pace.

We thought it was going to be strong in those cities, and we continue to feel that way.

Operator: Your next question comes from the line of David Katz with Jefferies. Your line is open.

David Katz: Hi, good morning, everyone. Thanks for taking my question. I wanted to go back to technology and AI in particular. It is a growing topic across the industry. Mark, I would love your perspectives on where you are at, where you would like to get to, and how you see it evolving for Hyatt Hotels Corporation and the industry.

Mark Hoplamazian: Sure. We have made significant progress over the last two years—about two years and four months—putting together our entire environment and then building out a number of agentic platforms. One should never measure success based on how many agents you have deployed in your company, and I do not believe that any particular platform or tool is a durable competitive advantage. However, if you combine advancements and facility with building platforms that have generated real impact to date—which we have—and become more and more practiced at the human elements required for that to generate value, that is where competitive advantage can be uncovered. There are two dimensions to that.

The first is the level of expertise and repetitions of creating great tools and great platforms and being able to pivot and continuously modify.

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