Hyatt Hotels Corp., the chain controlled by the Pritzker family, said third-quarter earnings increased as business travel rose and the company added properties in the U.S. and Mexico.
Net income climbed to $23 million, or 14 cents a share, from $14 million, or 8 cents, a year earlier, the Chicago-based company said today in a statement. Analysts expected earnings of 18 cents a share, the average of 15 estimates in a Bloomberg survey.
Hyatt, which gets about 70 percent of its earnings before interest, taxes, depreciation and amortization from the U.S., was helped by having hotels in cities with stable demand, according to Nikhil Bhalla, an analyst at FBR & Co. in Arlington, Virginia. Demand has been strong in California, Hawaii, Florida and Boston said Patrick Scholes, an analyst at SunTrust Robinson Humphrey Inc.
“In the past couple of quarters, Hyatt has generally outperformed both Marriott and Starwood, given its large U.S. exposure but its limited presence in the underperforming markets of New York and D.C.,” Bhalla said before the results were released. He has an outperform rating on the company, the equivalent of a buy.
Starwood Hotels & Resorts Worldwide Inc., which has about 60 percent of its rooms outside of the U.S., fell to a three-month low last week after reporting slowing demand Europe and China and cutting a fourth-quarter forecast. Marriott International Inc., the largest publicly traded U.S. hotel chain, on Oct. 3 reported earnings that beat estimates, partly because year-earlier costs from the spinoff of its timeshare business weren’t unrepeated.
Operating margins for owned and leased hotels widened by 20 basis points in the third quarter from a year earlier on a comparable basis, Hyatt said.
Revenue rose 8.9 percent to $977 million in the quarter from $897 million a year earlier. Revenue per available room, an industry measure of occupancy and rates, increased 4.2 percent for full-service hotels in North America. Overseas, revpar climbed 0.8 percent.
The company’s European business is focused on cities such as London, Zurich and Berlin “that showed at least moderate growth in the third quarter,” Bhalla said.