HYATT REPORTS FOURTH QUARTER AND FULL-YEAR 2021 RESULTS
Apple Leisure Group Acquisition Drives Net Rooms Growth of 19.5% in 2021
Hyatt Portfolio Rooms Mix Transforms to 40% Luxury, Lifestyle, or Resort
CHICAGO (February 16, 2022) - Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H) today reported fourth quarter and full-year 2021 financial results. Net loss attributable to Hyatt was $29 million, or $0.26 per diluted share, in the fourth quarter of 2021, compared to net loss attributable to Hyatt of $203 million, or $2.00 per diluted share, in the fourth quarter of 2020. Adjusted net loss attributable to Hyatt was $306 million, or $2.78 per diluted share, in the fourth quarter of 2021, compared to Adjusted net loss attributable to Hyatt of $179 million, or $1.77 per diluted share, in the fourth quarter of 2020. Refer to the table on page 15 of the schedules for a summary of special items impacting Adjusted net loss and Adjusted losses per share in the three months ended December 31, 2021 and December 31, 2020.
“2021 was a transformative year for our company,” said Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt Hotels Corporation. “We completed the largest acquisition in the history of Hyatt with Apple Leisure Group, realized approximately $630 million of gross proceeds from owned hotel dispositions, and had another year of industry leading Net Rooms Growth driven by a record year of new hotel openings.” Mr. Hoplamazian added, "The performance of our core business continues to strengthen, fueled by recovering demand and excellent operational execution."
On November 1, 2021, the Company completed the acquisition of Apple Leisure Group ("ALG"). Fourth quarter and full-year 2021 financial results reflect two months of ALG performance. ALG's contribution to Adjusted EBITDA does not include Net Deferrals and Net Financed Contracts; please refer to page 26 for definitions of these operational metrics as well as the supplemental investor deck available at investors.hyatt.com.
Fourth quarter 2021 financial results as compared to the fourth quarter 2020 are as follows:
•Net loss decreased to $29 million from a loss of $203 million.
•Adjusted EBITDA increased to $112 million from a loss of $98 million.
◦ALG contributed $4 million of Adjusted EBITDA.
◦Adjusted EBITDA does not include ALG's Net Deferrals of $19 million and Net Financed Contracts of $8 million.
•Comparable system-wide RevPAR increased to $96.75 in the fourth quarter of 2021 and decreased 26.1% compared to the fourth quarter of 2019 on a reported basis.1
•Comparable owned and leased hotels operating margins were 24.8% in the fourth quarter of 2021.
1 RevPAR percentage change calculated from comparable system-wide RevPAR of $130.93 as reported in the fourth quarter of 2019.
Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 13.
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Fiscal year 2021 financial results as compared to fiscal year 2020 are as follows:
•Net loss decreased to $222 million from a loss of $703 million.
•Adjusted EBITDA increased to $257 million from a loss of $177 million.
◦ALG contributed $4 million of Adjusted EBITDA.
◦Adjusted EBITDA does not include ALG's Net Deferrals of $19 million and Net Financed Contracts of $8 million.
•Comparable system-wide RevPAR increased to $77.80 in fiscal year 2021 and decreased 42.9% compared to fiscal year 2019 on a reported basis.2
•System-wide Net Rooms Growth was 19.5% in 2021. Excluding the acquisition of ALG, Net Rooms Growth was 6.1%.
•The pipeline of executed management or franchise contracts increased 12% to approximately 113,000 rooms. Excluding the acquisition of ALG, the pipeline increased 3% to approximately 104,000 rooms.
Mr. Hoplamazian added, "We opened 99 Hyatt hotels in 2021, a new record, excluding ALG's contribution. Our strong organic growth paired with the acquisitions of ALG this past year and Two Roads in 2018 have transformed our portfolio. We have doubled the number of luxury rooms, tripled the number of lifestyle rooms, and tripled the number of resort rooms in only four years. Our portfolio is uniquely positioned to benefit from the strengthening demand environment ahead, especially for our high-end travelers.”
OPERATIONAL UPDATE
Comparable system-wide RevPAR in comparison with 2019 levels recovered to 74% in the fourth quarter on a reported basis and 84% in December 2021, before softening to 63% in January 2022, due to the impact of the Omicron variant. Comparable system-wide RevPAR in February 2022 is trending at approximately 68% of 2019 levels through the first two weeks of the month with notable RevPAR acceleration of over 20% for the trailing 7-day period as of mid-February compared to the same 7-day period two weeks prior.
Forward booking trends have also experienced notable acceleration. Gross transient revenue booked for future periods was approximately 77% of 2019 levels in January and has accelerated to 95% month-to-date through mid-February. Gross group room revenue booked for Americas Full Service Managed properties in January for stay dates in 2022 was 114% of 2019 levels and has accelerated further through mid-February.
Net Package RevPAR for comparable ALG resorts in the Americas in comparison with 2019 levels was 85% in January. Gross package revenue booked for future periods was approximately 93% of 2019 levels in January and has accelerated to more than 135% of 2019 levels month-to-date through mid-February.
2 RevPAR percentage change calculated from comparable system-wide RevPAR of $136.27 as reported in fiscal year 2019.
Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 13.
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FOURTH QUARTER RESULTS
Fourth quarter of 2021 financial results as compared to the fourth quarter of 2020 are as follows:
Management, Franchise and Other Fees
Total management and franchise fee revenues increased to $124 million in the fourth quarter of 2021 compared to $47 million reported in the fourth quarter of 2020 and reflected a sequential improvement from $96 million reported in the third quarter of 2021. Base management fees increased to $59 million, incentive management fees increased to $28 million, and franchise fees increased to $37 million during the quarter. Other fee revenues increased to $25 million in the fourth quarter.
Americas Management and Franchising Segment
Americas management and franchising segment Adjusted EBITDA increased to $75 million in the fourth quarter of 2021 compared to $9 million reported in the fourth quarter of 2020. Results were led by increases in base and franchise fees with total franchise fees exceeding 2019 levels on a reported basis.
Americas net rooms increased 4.9% compared to the fourth quarter of 2020.
Southeast Asia, Greater China, Australia, New Zealand, South Korea, Japan and Micronesia (ASPAC) Management and Franchising Segment
ASPAC management and franchising segment Adjusted EBITDA decreased to $8 million in the fourth quarter of 2021 compared to $9 million reported in the fourth quarter of 2020. Results reflect lower demand from Greater China while the remainder of the region experienced improving demand and an increase in fees.
ASPAC net rooms increased 7.7% compared to the fourth quarter of 2020.
Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising Segment
EAME/SW Asia management and franchising segment Adjusted EBITDA increased to $13 million in the fourth quarter of 2021 compared to $(3) million reported in the fourth quarter of 2020. Results across the region were led by stronger demand in certain parts of Europe and in the Middle East driven by the Dubai Expo.
EAME/SW Asia net rooms increased 9.9% compared to the fourth quarter of 2020.
Apple Leisure Group Segment
On November 1, 2021, the Company completed the acquisition of ALG for a purchase price of $2.7 billion, net of cash acquired. As of December, 31, 2021, the acquisition of ALG added 99 resorts (or approximately 32,000 rooms), and a pipeline of approximately 9,000 rooms.
ALG is reported as one segment and derives its earnings through management and marketing services for all-inclusive resorts within the AMR™ Collection, a paid membership club offering through the Unlimited Vacation Club®, and distribution and destination management services offered through ALG Vacations®.
•In November and December, total ALG segment Adjusted EBITDA was $4 million. Adjusted EBITDA does not include ALG's Net Deferrals of $19 million and Net Financed Contracts of $8 million.
Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 13.
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•Deferred revenue from the Unlimited Vacation Club business increased by $35 million and deferred costs increased by $16 million resulting in Net Deferrals of $19 million. The Net Deferrals of $19 million will be recognized in our consolidated statements of income (loss) over the membership contract term, which ranges from 3 to 25 years, resulting in a material timing difference compared with cash received from members upon signing under membership contract terms. The Unlimited Vacation Club Net Financed Contracts increased $8 million, this increase represents installments to be paid by members in the future in accordance with the terms of their contract.
Please refer to the table on page 3 of the schedules for further details on revenue recognition, deferrals, and financed contracts relating to the Unlimited Vacation Club.
Owned and Leased Hotels Segment
Total owned and leased hotels segment Adjusted EBITDA increased to $57 million in the fourth quarter of 2021 compared to $(48) million reported in the fourth quarter of 2020 driven by improved demand across the portfolio with all hotels re-opened by the end of 2021. Owned and leased hotels segment comparable margins improved to 24.8%, reflecting strong operational execution and average daily rates.
Refer to the tables starting on page 11 of the schedules for a detailed list of portfolio changes and the year-over-year net impact to total owned and leased hotels segment Adjusted EBITDA.
Corporate and Other
Corporate and other Adjusted EBITDA increased to $(45) million in the fourth quarter of 2021 compared to $(65) million reported in the fourth quarter of 2020. The favorability to the fourth quarter of 2020 was primarily driven by a non-recurring expense to provide necessary system-wide services and programs to hotel owners in 2020. This was partially offset by increases in certain selling, general, administrative expenses, including payroll and related costs, and $6 million of integration-related costs associated with the ALG Acquisition.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased 9.8% inclusive of the rabbi trust impact and stock-based compensation. Adjusted selling, general, and administrative expenses increased 44.3% or $32 million, primarily due to the addition of ALG Adjusted selling, general, and administrative expenses for the two months post-acquisition, an increase in accrued bonus expense, and ALG integration costs.
Refer to the table on page 17 of the schedules for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.
OPENINGS AND FUTURE EXPANSION
In the fourth quarter of 2021, 128 new hotels (or 37,014 rooms) joined Hyatt's system, inclusive of 99 hotels (or 31,887 rooms) from the acquisition of ALG. In fiscal year 2021, 198 new hotels (or 49,834 rooms) joined Hyatt's system, inclusive of 99 hotels (or 31,887 rooms) from the acquisition of ALG. Additionally, 17 properties (or 3,076 rooms) converted to a Hyatt brand during 2021.
As of December 31, 2021, the Company had a pipeline of executed management or franchise contracts for approximately 540 hotels (approximately 113,000 rooms), inclusive of ALG's pipeline contribution of approximately 30 hotels (or approximately 9,000 rooms).
Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 13.
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TRANSACTION/ CAPITAL STRATEGY
During the fourth quarter, the Company completed the following transactions related to its owned and leased portfolio:
•Hyatt Regency Bishkek— a Hyatt affiliate sold its interest in the hospitality venture that owns Hyatt Regency Bishkek to our hospitality partner for approximately $3 million and entered into a long-term management agreement upon sale.
•Hyatt Regency Miami— a Hyatt affiliate contributed Hyatt Regency Miami to a newly-formed hospitality venture for approximately $22 million and retained a long-term management agreement.
The Company intends to successfully execute plans to sell approximately $2 billion of real estate by the end of 2024 as part of its expanded asset-disposition commitment announced in August 2021.
SHARE REPURCHASE/ DIVIDEND
There were no Class A or Class B shares repurchased during the fourth quarter of 2021. The Company ended the fourth quarter with 50,322,050 Class A and 59,653,271 Class B shares issued and outstanding.
During the 2021 fiscal year, the Company issued and sold 8,050,000 shares of Class A common stock and received $575 million of net proceeds.
The Company has suspended all share repurchase activity and its quarterly dividend.
2022 OUTLOOK
The Company is providing the following guidance for the 2022 fiscal year:
•Adjusted selling, general, and administrative expenses are expected to be approximately $460 million to $465 million. This includes selling, general, and administrative expenses associated with the acquisition of ALG, of which $25 million to $30 million is related to one-time integration costs in 2022. Refer to the table on page 18 of the schedules for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.
◦Excluding ALG, Adjusted selling, general, and administrative expenses are expected to be approximately $300 million to $305 million, and include $25 million to $30 million related to one-time integration costs in 2022.
◦ALG Adjusted selling, general, and administrative expenses are expected to be approximately $160 million.
•Capital expenditures are expected to be approximately $215 million.
◦Hyatt capital expenditures, excluding ALG, are expected to be approximately $190 million.
◦ALG capital expenditures are expected to be approximately $25 million.
•The Company expects to grow net rooms by approximately 6.0%.
No disposition or acquisition activity beyond what has been completed as of the date of this release has been included in the 2022 Outlook. The Company's 2022 Outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that Hyatt will achieve these results.
Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 13.
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BALANCE SHEET / LIQUIDITY
As of December 31, 2021, the Company reported the following:
•Total debt of $3,978 million.
•Pro rata share of unconsolidated hospitality venture debt of $581 million, substantially all of which is non-recourse to Hyatt and a portion of which Hyatt guarantees pursuant to separate agreements.
•Total liquidity of approximately $2.7 billion with $960 million of cash and cash equivalents, $227 million of short-term investments, and available borrowing availability of $1,493 million under Hyatt's revolving credit facility, net of letters of credit outstanding.
Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 13.
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CONFERENCE CALL INFORMATION
The Company will hold an investor conference call tomorrow, February 17, 2022, at 9:00 a.m. CT.
Participants may listen to a simultaneous webcast of the conference call, which may be accessed through the Company’s website at investors.hyatt.com. Alternatively, participants may access the live call by dialing: 888-412-4131 (U.S. Toll-Free) or 646-960-0134 (International Toll Number) using conference ID# 9019679 approximately 15 minutes prior to the scheduled start time.
A replay of the call will be available Thursday, February 17, 2022 at 11:00 a.m. CT until Wednesday, February 23, 2022 at 10:59 p.m. CT by dialing: 800-770-2030 (U.S. Toll-Free) or 647-362-9199 (International Toll Number) using conference ID# 9019679. An archive of the webcast will be available on the Company’s website for 90 days.
FORWARD-LOOKING STATEMENTS
Forward-Looking Statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about our plans, strategies, outlook, occupancy, the impact of the COVID-19 pandemic and pace of recovery, the amount by which the Company intends to reduce its real estate asset base and the anticipated timeframe for such asset dispositions, the number of properties we expect to open in the future, booking trends, our expected Adjusted SG&A expense, our expected capital expenditures, our expected net rooms growth, financial performance, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: risks associated with the acquisition of Apple Leisure Group (“ALG”), including the related incurrence of additional material indebtedness; our ability to realize the anticipated benefits of the acquisition of ALG as rapidly or to the extent anticipated, including successfully integrating the ALG business with ours; the duration and severity of the COVID-19 pandemic and the pace of recovery following the pandemic, any additional resurgence, or COVID-19 variants; the short and long-term effects of the COVID-19 pandemic, including on the demand for travel, transient and group business, and levels of consumer confidence; the impact of the COVID-19 pandemic, any additional resurgence, or COVID-19 variants, and the impact of actions that governments, businesses, and individuals take in response, on global and regional economies, travel limitations or bans, and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; the broad distribution and efficacy of COVID-19 vaccines and treatments, wide acceptance by the general population of such vaccines, and the availability, use, and effectiveness of COVID-19 testing, including at-home testing kits; the ability of third-party owners, franchisees, or hospitality venture partners to successfully navigate the impacts of the COVID-19 pandemic, any additional resurgence, or COVID-19 variants; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and the pace of economic recovery following economic downturns; global supply chain constraints and interruptions, rising costs of construction-related labor and materials, and increases in costs due to inflation or other factors that may not be fully offset by increases in revenues in our business; risks affecting the luxury, resort, and all-inclusive lodging segments; levels of spending in business, leisure, and group segments as well as consumer confidence; declines in occupancy and average daily rate; limited visibility with respect to future bookings; loss of key personnel; domestic and international political and geo-political conditions, including political or civil unrest or changes in trade policy; hostilities, or fear of hostilities, including future terrorist attacks, that affect travel; travel-related accidents; natural or man-made disasters such as earthquakes, tsunamis, tornadoes, hurricanes, floods, wildfires, oil spills, nuclear incidents, and global outbreaks of pandemics or contagious diseases, or fear of such outbreaks; our ability to successfully achieve certain levels of operating profits at hotels that have performance tests or guarantees in favor of our third-party owners; the impact of hotel renovations and redevelopments; risks associated with our capital allocation plans, share repurchase program, and dividend payments, including a reduction in, or elimination or suspension of, repurchase activity or dividend payments; the seasonal and cyclical nature of the real estate and hospitality businesses; changes in distribution arrangements, such as through internet travel intermediaries; changes in the tastes and preferences of our customers; relationships with colleagues and labor unions and changes in labor laws; the financial condition of, and our relationships with, third-party property owners, franchisees, and hospitality venture partners; the possible inability of third-party owners, franchisees, or development partners to access capital necessary to fund current operations or implement our plans for growth; risks associated with potential acquisitions and dispositions and the introduction of new brand concepts; the timing of acquisitions and dispositions and our ability to successfully integrate completed acquisitions with existing operations; failure to successfully complete proposed transactions (including the failure to satisfy closing conditions or obtain required approvals); our ability to successfully execute on our strategy to expand our management and franchising business while at the same time reducing our real estate asset base within targeted timeframes and at expected values; declines in the value of our real estate assets; unforeseen terminations of our management or franchise agreements; changes in federal, state, local, or foreign tax law; increases in interest rates, wages, and other operating costs; foreign exchange rate fluctuations or currency restructurings; lack of acceptance of new brands or innovation; general volatility of the capital markets and our ability to access such markets; changes in the competitive environment in our industry, including as a result of the COVID-19 pandemic, industry consolidation, and the markets where we operate; our ability to
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successfully grow the World of Hyatt loyalty program and Unlimited Vacation Club paid membership program; cyber incidents and information technology failures; outcomes of legal or administrative proceedings; violations of regulations or laws related to our franchising business; and other risks discussed in the Company's filings with the SEC, including our annual report on Form 10-K, which filings are available from the SEC. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
NON-GAAP FINANCIAL MEASURES
The Company refers to certain financial measures that are not recognized under U.S. generally accepted accounting principles (GAAP) in this press release, including: net income (loss), adjusted for special items; diluted EPS, adjusted for special items; Adjusted EBITDA; Adjusted EBITDA margin; and Adjusted SG&A. See the schedules to this earnings release, including the "Definitions" section, for additional information and reconciliations of such non-GAAP financial measures.
AVAILABILITY OF INFORMATION ON HYATT'S WEBSITE AND SOCIAL MEDIA CHANNELS
Investors and others should note that Hyatt routinely announces material information to investors and the marketplace using U.S. Securities and Exchange Commission (SEC) filings, press releases, public conference calls, webcasts and the Hyatt Investor Relations website. The Company uses these channels as well as social media channels (e.g., the Hyatt Facebook account (facebook.com/hyatt); the Hyatt Instagram account (instagram.com/hyatt/); the Hyatt Twitter account (twitter.com/hyatt); the Hyatt LinkedIn account (linkedin.com/company/hyatt/); and the Hyatt YouTube account (youtube.com/user/hyatt) as a means of disclosing information about the Company's business to our guests, customers, colleagues, investors, and the public. While not all of the information that the Company posts to the Hyatt Investor Relations website or on the Company's social media channels is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Hyatt to review the information that it shares at the Investor Relations link located at the bottom of the page on hyatt.com and on the Company's social media channels. Users may automatically receive email alerts and other information about the Company when enrolling an email address by visiting "Sign up for Email Alerts" in the "Investor Resources" section of Hyatt's website at investors.hyatt.com.
ABOUT HYATT HOTELS CORPORATION
Hyatt Hotels Corporation, headquartered in Chicago, is a leading global hospitality company guided by its purpose – to care for people so they can be their best. As of December 31, 2021, the Company’s portfolio included more than 1,150 hotel and all-inclusive properties in 70 countries across six continents. The Company's offering includes the Park Hyatt®, Miraval®, Grand Hyatt®, Alila®, Andaz®, The Unbound Collection by Hyatt®, Destination by Hyatt™, Hyatt Regency®, Hyatt®, Hyatt Ziva™, Hyatt Zilara™, Thompson Hotels®, Hyatt Centric®, Caption by Hyatt, JdV by Hyatt™, Hyatt House®, Hyatt Place®, UrCove, and Hyatt Residence Club® brands, as well as resort and hotel brands under the AMR™ Collection, including Secrets® Resorts & Spas, Dreams® Resorts & Spas, Breathless Resorts & Spas®, Zoëtry® Wellness & Spa Resorts, Alua Hotels & Resorts®, and Sunscape® Resorts & Spas. Subsidiaries of the Company operate the World of Hyatt® loyalty program, ALG Vacations®, Unlimited Vacation Club®, Amstar DMC destination management services, and Trisept Solutions® technology services. For more information, please visit www.hyatt.com.
Percentages on the following schedules may not recompute due to rounding. Not meaningful percentage changes are presented as "NM".
Hyatt Hotels Corporation
Consolidated Statements of Income (Loss)
(in millions, except per share amounts)
(unaudited)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
2021
2020
REVENUES:
Owned and leased hotels
$
280
$
91
$
838
$
513
Management, franchise, and other fees
149
59
418
239
Contra revenue
(9)
(10)
(35)
(30)
Net management, franchise, and other fees
140
49
383
209
Distribution and destination management
115
—
115
—
Other revenues
40
13
109
58
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
501
271
1,583
1,286
Total revenues
1,076
424
3,028
2,066
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Owned and leased hotels
219
132
725
627
Distribution and destination management
112
—
112
—
Depreciation and amortization
91
77
310
310
Other direct costs
49
15
127
65
Selling, general, and administrative
116
104
366
321
Costs incurred on behalf of managed and franchised properties
522
307
1,639
1,375
Direct and selling, general, and administrative expenses
1,109
635
3,279
2,698
Net gains and interest income from marketable securities held to fund rabbi trusts
8
37
43
60
Equity earnings (losses) from unconsolidated hospitality ventures
20
(25)
28
(70)
Interest expense
(40)
(41)
(163)
(128)
Gains (losses) on sales of real estate and other
2
(44)
414
(36)
Asset impairments
(6)
(10)
(8)
(62)
Other income (loss), net
(53)
22
(19)
(92)
INCOME (LOSS) BEFORE INCOME TAXES
(102)
(272)
44
(960)
BENEFIT (PROVISION) FOR INCOME TAXES
73
69
(266)
257
NET LOSS
(29)
(203)
(222)
(703)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
—
—
—
—
NET LOSS ATTRIBUTABLE TO HYATT HOTELS CORPORATION
$
(29)
$
(203)
$
(222)
$
(703)
LOSSES PER SHARE - Basic
Net loss
$
(0.26)
$
(2.00)
$
(2.13)
$
(6.93)
Net loss attributable to Hyatt Hotels Corporation
$
(0.26)
$
(2.00)
$
(2.13)
$
(6.93)
LOSSES PER SHARE - Diluted
Net loss
$
(0.26)
$
(2.00)
$
(2.13)
$
(6.93)
Net loss attributable to Hyatt Hotels Corporation
$
(0.26)
$
(2.00)
$
(2.13)
$
(6.93)
Basic share counts
110.1
101.3
104.0
101.3
Diluted share counts
110.1
101.3
104.0
101.3
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Hyatt Hotels Corporation
Segment Financial Summary
(in millions)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change ($)
Change (%)
Change in Constant $
Change in Constant $ (%)
2021
2020
Change ($)
Change (%)
Change in Constant $
Change in Constant $ (%)
Owned and leased hotels
$
286
$
93
$
193
206.8
%
$
193
208.1
%
$
855
$
525
$
330
62.6
%
$
328
62.0
%
Americas management and franchising
112
40
72
178.3
%
72
178.5
%
361
194
167
86.6
%
167
86.9
%
ASPAC management and franchising
21
19
2
5.0
%
2
3.8
%
72
61
11
17.2
%
9
13.9
%
EAME/SW Asia management and franchising
18
6
12
201.4
%
12
204.6
%
43
23
20
85.0
%
20
83.7
%
Apple Leisure Group (a)
155
—
155
NM
155
NM
155
—
155
NM
155
NM
Corporate and other
8
9
(1)
(12.0)
%
(1)
(12.0)
%
41
34
7
19.7
%
7
19.7
%
Eliminations (b)
(16)
(4)
(12)
(237.0)
%
(12)
(236.9)
%
(47)
(27)
(20)
(71.3)
%
(20)
(71.1)
%
Adjusted revenues
$
584
$
163
$
421
257.3
%
$
421
257.9
%
$
1,480
$
810
$
670
82.5
%
$
666
81.7
%
Adjusted EBITDA
Owned and leased hotels
$
49
$
(42)
$
91
217.3
%
$
91
217.6
%
$
77
$
(135)
$
212
156.9
%
$
213
156.4
%
Pro rata share of unconsolidated hospitality ventures
8
(6)
14
230.6
%
14
230.4
%
14
(13)
27
204.1
%
28
199.4
%
Total owned and leased hotels
57
(48)
105
219.0
%
105
219.3
%
91
(148)
239
161.2
%
241
160.5
%
Americas management and franchising
75
9
66
735.0
%
66
731.8
%
231
90
141
156.8
%
141
157.6
%
ASPAC management and franchising
8
9
(1)
(14.4)
%
(1)
(16.1)
%
29
24
5
20.6
%
4
15.5
%
EAME/SW Asia management and franchising
13
(3)
16
461.4
%
16
467.3
%
17
(15)
32
211.0
%
33
207.3
%
Apple Leisure Group (a)
4
—
4
NM
4
NM
4
—
4
NM
4
NM
Corporate and other
(45)
(65)
20
31.6
%
20
31.5
%
(116)
(130)
14
11.2
%
14
11.4
%
Eliminations
—
—
—
(32.4)
%
—
(32.4)
%
1
2
(1)
(49.1)
%
(1)
(49.1)
%
Adjusted EBITDA
$
112
$
(98)
$
210
214.4
%
$
210
214.8
%
$
257
$
(177)
$
434
245.3
%
$
436
243.9
%
Three Months Ended December 31,
Year Ended December 31,
Net Deferral activity
2021
2020
Change $
Change (%)
2021
2020
Change ($)
Change (%)
Increase in deferred revenue
$
35
$
—
$
35
NM
$
35
$
—
$
35
NM
Increase in deferred costs
(16)
—
(16)
NM
(16)
—
(16)
NM
Net Deferrals
$
19
$
—
$
19
NM
$
19
$
—
$
19
NM
Increase in Net Financed Contracts
$
8
$
—
$
8
NM
$
8
$
—
$
8
NM
(a) Includes activity for the two month period of ownership following the acquisition of ALG during the year ended December 31, 2021.
(b) These intersegment eliminations represent management fee revenues and expenses related to our owned and leased hotels and promotional award redemption revenues and expenses related to our co-branded credit card program at our owned and leased hotels.
Page 2
Hyatt Hotels Corporation
Reconciliation of Unlimited Vacation Club Net Deferrals
(in millions)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change $
Change (%)
2021
2020
Change ($)
Change (%)
Sales of membership club contracts deferrals
$
54
$
—
$
54
NM
$
54
$
—
$
54
NM
Membership club revenue recognized
(19)
—
(19)
NM
(19)
—
(19)
NM
Increase in deferred revenue from membership club contract sales
35
—
35
NM
35
—
35
NM
Costs of memberships club contracts deferrals
(16)
—
(16)
NM
(16)
—
(16)
NM
Membership club costs recognized
—
—
—
NM
—
—
—
NM
Increase in deferred costs from membership club contract costs
(16)
—
(16)
NM
(16)
—
(16)
NM
Net Deferrals (a)
$
19
$
—
$
19
NM
$
19
$
—
$
19
NM
Increase in Net Financed Contracts (a)
$
8
$
—
$
8
NM
$
8
$
—
$
8
NM
(a)Includes activity for the two month period of ownership following the acquisition of ALG during the year ended December 31, 2021.
Page 3
Hyatt Hotels Corporation
Hotel Chain Statistics
Comparable Hotels
In Constant $
Three Months Ended December 31,
Year Ended December 31,
RevPAR
Occupancy
ADR
RevPAR
Occupancy
ADR
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
Owned and leased hotels (# of hotels) (a)
Owned and leased hotels (30)
$
133.27
308.1
%
53.6
%
33.9% pts
$
248.46
49.6
%
$
95.66
94.9
%
44.5
%
21.4% pts
$
215.00
1.3
%
Managed and franchised hotels (# of hotels) (b)
System-wide hotels (868)
$
96.75
131.8
%
55.6
%
23.1% pts
$
174.13
35.5
%
$
77.80
66.5
%
48.6
%
16.9% pts
$
160.11
8.5
%
Americas
Full service hotels (211)
$
115.50
266.1
%
53.3
%
33.5% pts
$
216.80
36.2
%
$
89.36
96.4
%
44.1
%
19.9% pts
$
202.49
7.9
%
Select service hotels (406)
$
85.16
107.1
%
65.1
%
22.4% pts
$
130.77
35.9
%
$
76.23
66.3
%
61.8
%
20.7% pts
$
123.37
10.6
%
ASPAC
Full service hotels (110)
$
76.02
3.6
%
46.4
%
(0.3)% pts
$
163.80
4.1
%
$
67.54
15.0
%
42.9
%
6.1% pts
$
157.57
(1.3)
%
Select service hotels (25)
$
36.64
(12.4)
%
50.3
%
(11.9)% pts
$
72.78
8.2
%
$
37.87
23.9
%
53.0
%
9.2% pts
$
71.40
2.4
%
EAME/SW Asia
Full service hotels (98)
$
106.33
228.2
%
55.3
%
30.8% pts
$
192.38
45.7
%
$
69.14
72.2
%
40.8
%
16.0% pts
$
169.62
4.8
%
Select service hotels (18)
$
57.76
129.3
%
62.8
%
22.9% pts
$
91.92
45.7
%
$
40.24
43.3
%
52.8
%
16.8% pts
$
76.17
(2.4)
%
(a) Owned and leased hotels figures do not include unconsolidated hospitality ventures.
(b) Managed and franchised hotels figures include owned and leased hotels.
Page 4
Hyatt Hotels Corporation
Hotel Brand Statistics
Comparable System-wide Managed and Franchised Hotels (a)
In Constant $
Three Months Ended December 31,
Year Ended December 31,
RevPAR
Occupancy
ADR
RevPAR
Occupancy
ADR
Brand (# of hotels)
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
Park Hyatt (39)
$
197.28
88.1
%
49.4
%
16.9% pts
$
399.62
24.0
%
$
144.04
53.2
%
41.6
%
12.0% pts
$
346.35
8.9
%
Grand Hyatt (55)
$
101.54
104.4
%
50.3
%
18.8% pts
$
201.90
27.9
%
$
80.12
52.5
%
43.7
%
14.2% pts
$
183.54
3.2
%
Andaz (21)
$
196.08
153.7
%
59.5
%
23.1% pts
$
329.77
55.4
%
$
144.04
87.7
%
49.1
%
15.9% pts
$
293.25
26.7
%
Composite Luxury1
$
135.58
115.5
%
51.9
%
20.3% pts
$
261.07
31.1
%
$
104.36
67.9
%
44.1
%
14.7% pts
$
236.39
11.8
%
Hyatt Regency (200)
$
85.66
169.3
%
50.8
%
25.7% pts
$
168.55
33.2
%
$
67.13
66.4
%
42.1
%
15.5% pts
$
159.63
5.1
%
Hyatt Centric (32)
$
107.94
197.8
%
59.8
%
30.6% pts
$
180.62
45.4
%
$
80.77
82.2
%
49.6
%
21.7% pts
$
162.98
2.5
%
Composite Upper-Upscale2
$
87.84
175.5
%
51.8
%
26.5% pts
$
169.49
34.7
%
$
68.28
70.0
%
42.8
%
16.2% pts
$
159.56
5.7
%
Hyatt Place (351)
$
77.43
100.9
%
63.0
%
19.6% pts
$
122.84
38.3
%
$
69.09
66.9
%
59.8
%
19.7% pts
$
115.53
12.0
%
Hyatt House (98)
$
90.83
94.3
%
67.3
%
21.4% pts
$
135.05
32.6
%
$
81.17
54.4
%
64.0
%
19.8% pts
$
126.83
6.6
%
Composite Upscale3
$
80.43
99.2
%
64.0
%
20.0% pts
$
125.71
36.8
%
$
71.79
63.5
%
60.7
%
19.7% pts
$
118.19
10.5
%
(a) Managed and franchised hotels figures include owned and leased hotels.
1 Includes Park Hyatt, Miraval, Grand Hyatt, Alila, Andaz, The Unbound Collection by Hyatt, Destination by Hyatt, and Thompson Hotels.
2 Includes Hyatt Regency, Hyatt, Hyatt Centric, and JdV by Hyatt.
3 Includes Hyatt Place and Hyatt House.
Page 5
Hyatt Hotels Corporation
All-inclusive Brand Statistics
All Properties (Comparable and Non-Comparable) Managed and Franchised Hotels (a)
In Constant $
Three Months Ended December 31,
Year Ended December 31,
Net Package RevPAR
Occupancy
ADR
Net Package RevPAR
Occupancy
ADR
Brand (# of hotels)
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
2021
vs. 2020
AMR Collection Americas (59) (b)
$
188.08
NM
70.4
%
NM
$
267.30
NM
$
188.08
NM
70.4
%
NM
$
267.30
NM
AMR Collection Europe (40) (b)(c)
$
92.15
NM
57.3
%
NM
$
160.81
NM
$
92.15
NM
57.3
%
NM
$
160.81
NM
Composite all-inclusive1
$
192.42
NM
67.6
%
NM
$
284.62
NM
$
195.71
NM
62.3
%
NM
$
314.14
NM
(a) Managed and franchised hotels figures include owned and leased hotels.
(b) Includes activity for the two month period of ownership following the acquisition of ALG during the year ended December 31, 2021.
(c) Certain resorts in Europe operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
1 Includes AMR Collection, Hyatt Ziva and Hyatt Zilara
Page 6
Hyatt Hotels Corporation
Fee Summary
(in millions)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change ($)
Change (%)
2021
2020
Change ($)
Change (%)
Base management fees
$
59
$
22
$
37
166.1
%
$
169
$
96
$
73
76.0
%
Incentive management fees
28
10
18
178.3
%
58
22
36
159.0
%
Franchise fees
37
15
22
156.8
%
119
63
56
89.3
%
Management and franchise fees
124
47
77
166.0
%
346
181
165
91.0
%
Other fee revenues
25
12
13
107.1
%
72
58
14
24.7
%
Management, franchise, and other fees
$
149
$
59
$
90
153.5
%
$
418
$
239
$
179
74.9
%
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change ($)
Change (%)
2021
2020
Change ($)
Change (%)
Management, franchise, and other fees
$
149
$
59
$
90
153.5
%
$
418
$
239
$
179
74.9
%
Contra revenue from management agreements
(6)
(7)
1
22.5
%
(23)
(19)
(4)
(18.6)
%
Contra revenue from franchise agreements
(3)
(3)
—
(30.5)
%
(12)
(11)
(1)
(13.1)
%
Net management, franchise, and other fees
$
140
$
49
$
91
188.3
%
$
383
$
209
$
174
83.3
%
Page 7
Hyatt Hotels Corporation
Properties and Rooms by Geography
Owned and leased hotels
December 31, 2021
December 31, 2020
Change
Properties
Rooms
Properties
Rooms
Properties
Rooms
Full service hotels
United States
22
11,058
25
12,607
(3)
(1,549)
Other Americas
3
1,262
2
795
1
467
EAME/SW Asia (a)
5
1,135
7
1,435
(2)
(300)
Select service hotels
United States
1
171
1
171
—
—
Other Americas
2
293
2
293
—
—
EAME/SW Asia
1
330
1
330
—
—
Total full service and select service hotels
34
14,249
38
15,631
(4)
(1,382)
All-inclusive hotels (b)
4
909
—
—
4
909
Total owned and leased hotels (c)
38
15,158
38
15,631
—
(473)
(a) December 31, 2020 includes one property that converted from leased to managed during the year ended December 31, 2021.
(b) Certain resorts in Europe operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
(c) Figures do not include unconsolidated hospitality ventures.
Page 8
Hyatt Hotels Corporation
Properties and Rooms by Geography
Managed and franchised properties (includes owned and leased properties)
December 31, 2021
December 31, 2020
Change
Properties
Rooms
Properties
Rooms
Properties
Rooms
Americas
Full service hotels
United States managed
147
63,974
139
63,362
8
612
Other Americas managed
25
8,958
25
8,916
—
42
United States franchised
77
23,102
68
20,620
9
2,482
Other Americas franchised
8
1,307
5
924
3
383
Subtotal
257
97,341
237
93,822
20
3,519
Select service hotels
United States managed
33
4,923
42
6,275
(9)
(1,352)
Other Americas managed
13
1,857
13
1,857
—
—
United States franchised
411
57,389
379
52,291
32
5,098
Other Americas franchised
13
1,761
12
1,621
1
140
Subtotal
470
65,930
446
62,044
24
3,886
ASPAC
Full service hotels
ASPAC managed
125
41,649
116
39,327
9
2,322
ASPAC franchised
10
3,153
8
2,520
2
633
Subtotal
135
44,802
124
41,847
11
2,955
Select service hotels
ASPAC managed
29
5,053
29
5,378
—
(325)
ASPAC franchised
13
2,244
6
1,169
7
1,075
Subtotal
42
7,297
35
6,547
7
750
EAME/SW Asia
Full service hotels
EAME/SW Asia managed
101
25,457
97
24,678
4
779
EAME/SW Asia franchised
22
3,799
13
2,454
9
1,345
Subtotal
123
29,256
110
27,132
13
2,124
Select service hotels
EAME/SW Asia managed
21
3,429
17
2,749
4
680
EAME/SW Asia franchised
6
1,411
5
1,131
1
280
Subtotal
27
4,840
22
3,880
5
960
Total full service and select service hotels
1,054
249,466
974
235,272
80
14,194
Americas
All-inclusive hotels
Other Americas
68
24,873
8
3,153
60
21,720
Subtotal
68
24,873
8
3,153
60
21,720
EAME/SW Asia (a)
All-inclusive hotels
EAME/SW Asia
40
10,605
—
—
40
10,605
Subtotal
40
10,605
—
—
40
10,605
Total all-inclusive hotels
108
35,478
8
3,153
100
32,325
Total managed and franchised (b)
1,162
284,944
982
238,425
180
46,519
Vacation ownership
15
16
(1)
Residential
36
37
(1)
Condominium ownership
39
36
3
(a) Certain resorts in Europe operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
(b) Figures do not include vacation ownership, residential, or condominium ownership units.
Page 9
Hyatt Hotels Corporation
Properties and Rooms by Brand
December 31, 2021
December 31, 2020
Change
Brand
Properties
Rooms
Properties
Rooms
Properties
Rooms
Park Hyatt
45
8,413
44
8,205
1
208
Miraval
3
357
3
362
—
(5)
Grand Hyatt
58
31,189
58
32,185
—
(996)
Alila
15
1,681
13
1,445
2
236
Andaz
24
5,447
24
5,532
—
(85)
The Unbound Collection by Hyatt
28
5,642
24
4,841
4
801
Thompson Hotels
15
3,147
11
2,543
4
604
Destination by Hyatt
18
3,959
16
3,906
2
53
Hyatt Regency (a)
226
94,241
214
90,899
12
3,342
Hyatt
13
3,354
12
2,056
1
1,298
Hyatt Centric (a)
48
10,182
38
7,937
10
2,245
JdV by Hyatt
21
2,987
13
2,090
8
897
Hyatt Place
403
58,147
388
55,426
15
2,721
Hyatt House
124
17,830
110
16,030
14
1,800
UrCove
12
2,090
5
1,015
7
1,075
Other
1
800
1
800
—
—
Total full service and select service hotels (b)
1,054
249,466
974
235,272
80
14,194
AMR Collection (c)(d)
99
31,887
—
—
99
31,887
Hyatt Ziva
6
2,672
5
2,234
1
438
Hyatt Zilara
3
919
3
919
—
—
Total all-inclusive hotels
108
35,478
8
3,153
100
32,325
Total managed and franchised properties and rooms (b)
1,162
284,944
982
238,425
180
46,519
Hyatt Residence Club
15
16
(1)
(a) Hyatt Regency includes two properties and Hyatt Centric includes one property that we will rebrand under the respective brand in 2022.
(b) Figures do not include vacation ownership, residential, or condominium ownership units.
(c) AMR Collection includes five non-branded properties managed by ALG.
(d) Certain resorts in Europe operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
Page 10
Hyatt Hotels Corporation
Year-over-Year Net Impact of Portfolio Changes to Owned and Leased Hotels Segment Adjusted EBITDA
($ in millions)
Rooms
Transaction / Opening Date
Three Months Ended December 31, 2021 Adjusted EBITDA Impact
Dispositions
Owned and Leased Hotels
Hyatt Regency Baku
159
4Q20
Hyatt Regency Lost Pines Resort and Spa
490
2Q21
Hyatt Regency Lake Tahoe Resort, Spa and Casino
422
3Q21
Hyatt Regency Miami
615
4Q21
Hyatt Regency Bishkek
178
4Q21
Total Owned and Leased Hotels Dispositions (a)
$
1
Unconsolidated Hospitality Venture Hotels
Grand Hyatt São Paulo
467
1Q21
Hyatt Place Celaya
145
2Q21
Hyatt Place Los Cabos
157
2Q21
Hyatt Place Tijuana
145
2Q21
Hyatt Centric Beale Street Memphis
227
2Q21
Hyatt Place Glendale / Los Angeles
179
4Q21
Hyatt Place San Jose Airport
190
4Q21
Hyatt House San Jose Airport
165
4Q21
Hyatt Centric Downtown Portland
220
4Q21
Hyatt House Nashville at Vanderbilt
201
4Q21
Total Unconsolidated Hospitality Venture Hotels Dispositions (b) (c) (d)
$
—
Year-over-Year Net Impact of Dispositions to Owned and Leased Hotels Segment Adjusted EBITDA
$
1
Acquisitions or Openings
Owned and Leased Hotels
Grand Hyatt São Paulo
467
1Q21
Total Owned and Leased Hotels Acquisitions or Openings
$
1
Unconsolidated Hospitality Venture Hotels
Hyatt Centric Downtown Nashville
252
3Q21
Hyatt Centric Buckhead Atlanta
218
4Q21
Hyatt Regency Miami
615
4Q21
Total Unconsolidated Hospitality Venture Hotels Acquisitions or Openings (b) (e)
$
—
Year-over-Year Net Impact of Acquisitions and Openings to Owned and Leased Segment Adjusted EBITDA
$
1
Year-over-Year Net Impact of Portfolio Changes to Owned and Leased Hotels Segment Adjusted EBITDA
$
2
(a) Includes the year-over-year impact of one property that converted from leased to managed during the three months ended December 31, 2021.
(b) Reflects Hyatt's pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA.
(c) Includes the sale of the hotel by the venture, the Company's sale of our equity interest in the venture, or the Company's equity interest no longer qualifying for the equity method of accounting.
(d) Includes the year-over-year financial impact of pre-opening activity.
(e) Includes the opening of a hotel by the venture.
Page 11
Hyatt Hotels Corporation
Year-over-Year Net Impact of Portfolio Changes to Owned and Leased Hotels Segment Adjusted EBITDA
($ in millions)
Rooms
Transaction / Opening Date
Year Ended December 31, 2021 Adjusted EBITDA Impact
Dispositions
Owned and Leased Hotels
Hyatt Regency Baku
159
4Q20
Hyatt Regency Lost Pines Resort and Spa
490
2Q21
Hyatt Regency Lake Tahoe Resort, Spa and Casino
422
3Q21
Hyatt Regency Miami
615
4Q21
Hyatt Regency Bishkek
178
4Q21
Total Owned and Leased Hotels Dispositions (a)
$
(4)
Unconsolidated Hospitality Venture Hotels
Grand Hyatt São Paulo
467
1Q21
Hyatt Place Celaya
145
2Q21
Hyatt Place Los Cabos
157
2Q21
Hyatt Place Tijuana
145
2Q21
Hyatt Centric Beale Street Memphis
227
2Q21
Hyatt Place Glendale / Los Angeles
179
4Q21
Hyatt Place San Jose Airport
190
4Q21
Hyatt House San Jose Airport
165
4Q21
Hyatt Centric Downtown Portland
220
4Q21
Hyatt House Nashville at Vanderbilt
201
4Q21
Total Unconsolidated Hospitality Venture Hotels Dispositions (b) (c) (e)
$
2
Year-over-Year Net Impact of Dispositions to Owned and Leased Hotels Segment Adjusted EBITDA
$
(2)
Acquisitions or Openings
Owned and Leased Hotels
Miraval Berkshires Resort and Spa
95
3Q20
Wyndhurst Manor & Club
43
3Q20
Grand Hyatt São Paulo
467
1Q21
Alila Ventana Big Sur (d)
50
2Q21
Total Owned and Leased Hotels Acquisitions or Openings (e)
$
10
Unconsolidated Hospitality Venture Hotels
Hyatt Centric Downtown Portland
220
1Q20
Hyatt Place Boston / Seaport District
297
3Q20
Hyatt Centric Center City Philadelphia
332
4Q20
Hyatt Centric Downtown Nashville
252
3Q21
Hyatt Centric Buckhead Atlanta
218
4Q21
Hyatt Regency Miami
615
4Q21
Total Unconsolidated Hospitality Venture Hotels Acquisitions or Openings (b) (f)
$
1
Year-over-Year Net Impact of Acquisitions and Openings to Owned and Leased Segment Adjusted EBITDA
$
11
Year-over-Year Net Impact of Dispositions, Acquisitions and Openings to Owned and Leased Segment Adjusted EBITDA
$
9
(a) Includes the year-over-year impact of one property that converted from leased to managed during the year ended December 31, 2021.
(b) Reflects Hyatt's pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA.
(c) Includes the sale of the hotel by the venture, the Company's sale of our equity interest in the venture, or the Company's equity interest no longer qualifying for the equity method of accounting.
(d) Total inventory of 59 rooms; 50 rooms available for sale with 9 rooms out of service. Hotel was acquired and subsequently sold during the year ended December 31, 2021.
(e) Includes the year-over-year financial impact of pre-opening activity.
(f) Includes the opening of a hotel by the venture.
Page 12
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Financial Measure: Net Loss Attributable to Hyatt Hotels Corporation to EBITDA and EBITDA to Adjusted EBITDA and Total Revenues to Adjusted Revenues
(in millions)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change $
Change (%)
2021
2020
Change ($)
Change (%)
Net loss attributable to Hyatt Hotels Corporation
$
(29)
$
(203)
$
174
85.7
%
$
(222)
$
(703)
$
481
68.4
%
Interest expense
40
41
(1)
(2.7)
%
163
128
35
26.9
%
(Benefit) provision for income taxes
(73)
(69)
(4)
(3.8)
%
266
(257)
523
203.2
%
Depreciation and amortization
91
77
14
17.6
%
310
310
—
0.1
%
EBITDA
29
(154)
183
119.2
%
517
(522)
1,039
199.1
%
Contra revenue
9
10
(1)
(9.2)
%
35
30
5
16.7
%
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
(501)
(271)
(230)
(84.6)
%
(1,583)
(1,286)
(297)
(23.1)
%
Costs incurred on behalf of managed and franchised properties
522
307
215
69.9
%
1,639
1,375
264
19.2
%
Costs incurred on behalf of managed and franchised properties that we do not intend to recover from hotel owners
—
(45)
45
100.0
%
—
(45)
45
100.0
%
Equity (earnings) losses from unconsolidated hospitality ventures
(20)
25
(45)
(178.7)
%
(28)
70
(98)
(139.4)
%
Stock-based compensation expense
8
4
4
138.8
%
50
24
26
113.7
%
(Gains) losses on sales of real estate and other
(2)
44
(46)
(105.8)
%
(414)
36
(450)
NM
Asset impairments
6
10
(4)
(47.1)
%
8
62
(54)
(87.3)
%
Other (income) loss, net
53
(22)
75
356.4
%
19
92
(73)
(79.2)
%
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA
8
(6)
14
230.6
%
14
(13)
27
204.1
%
Adjusted EBITDA
$
112
$
(98)
$
210
214.4
%
$
257
$
(177)
$
434
245.3
%
Three Months Ended December 31,
Year Ended December 31,
Net Deferral activity
2021
2020
Change $
Change (%)
2021
2020
Change ($)
Change (%)
Increase in deferred revenue
$
35
$
—
$
35
NM
$
35
$
—
$
35
NM
Increase in deferred costs
(16)
—
(16)
NM
(16)
—
(16)
NM
Net Deferrals (a)
$
19
$
—
$
19
NM
$
19
$
—
$
19
NM
Increase in Net Financed Contracts (a)
$
8
$
—
$
8
NM
$
8
$
—
$
8
NM
(a)Includes activity for the two month period of ownership following the acquisition of ALG during the year ended December 31, 2021.
Page 13
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Financial Measure: Net Loss Attributable to Hyatt Hotels Corporation to EBITDA and EBITDA to Adjusted EBITDA and Total Revenues to Adjusted Revenues
(in millions)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change ($)
Change (%)
2021
2020
Change ($)
Change (%)
Total revenues
$
1,076
$
424
$
652
153.3
%
$
3,028
$
2,066
$
962
46.5
%
Add: Contra revenue
9
10
(1)
(9.2)
%
35
30
5
16.7
%
Less: Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
(501)
(271)
(230)
(84.6)
%
(1,583)
(1,286)
(297)
(23.1)
%
Adjusted revenues
$
584
$
163
$
421
257.3
%
$
1,480
$
810
$
670
82.5
%
Adjusted EBITDA Margin %
19.2
%
(59.8)
%
79.0
%
17.4
%
(21.8)
%
39.2
%
Adjusted EBITDA Margin % Change in Constant Currency
78.8
%
39.3
%
Page 14
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Financial Measure: Losses per Diluted Share and Net Loss Attributable to Hyatt Hotels Corporation, to Losses per Diluted Share, Adjusted for Special Items and Adjusted Net Loss Attributable to Hyatt Hotels Corporation - Three Months Ended December 31, 2021 and December 31, 2020
(in millions, except per share amounts)
Location on Consolidated Statements of Income (Loss)
Three Months Ended December 31,
2021
2020
Net loss attributable to Hyatt Hotels Corporation
$
(29)
$
(203)
Losses per diluted share
$
(0.26)
$
(2.00)
Special items
Unconsolidated hospitality ventures (a)
Equity earnings (losses) from unconsolidated hospitality ventures
(32)
1
(Gains) losses on sales of real estate and other (b)
Gains (losses) on sales of real estate and other
(2)
44
Transaction costs (c)
Other income (loss), net
27
—
Fund deficits (d)
Revenues for the reimbursement of costs incurred and costs incurred on behalf of managed and franchised properties; other income (loss), net
17
4
Unrealized (gains) losses (e)
Other income (loss), net
6
(23)
Asset impairments (f)
Asset impairments
6
10
Utilization of Avendra and other proceeds (g)
Costs incurred on behalf of managed and franchised properties; depreciation and amortization
4
7
Restructuring expenses (h)
Other income (loss), net
—
4
Fund deficits not recovered (i)
Revenues for the reimbursement of costs incurred and costs incurred on behalf of managed and franchised properties
—
(21)
Other
Other income (loss), net
3
(3)
Special items - pre-tax
29
23
Income tax benefit (provision) for special items
Benefit (provision) for income taxes
(306)
1
Total special items - after-tax
(277)
24
Special items impact per diluted share
$
(2.52)
$
0.23
Adjusted net loss attributable to Hyatt Hotels Corporation
$
(306)
$
(179)
Losses per diluted share, adjusted for special items
$
(2.78)
$
(1.77)
(a) Unconsolidated hospitality ventures - During the three months ended December 31, 2021 (Q4 2021), we recognized $32 million of net gains related to sales activity of certain equity method investments.
(b) (Gains) losses on sales of real estate and other - During Q4 2021, we recognized a $2 million pre-tax gain on the contribution of Hyatt Regency Miami assets to a newly formed hospitality venture, resulting in the derecognition of the nonfinancial assets in the subsidiary. During the three months ended December 31, 2020 (Q4 2020), net losses were $44 million, primarily driven by a $30 million pre-tax loss on the sale of the entities which own Hyatt Regency Baku and a $11 million pre-tax loss on the sale of the entity which owns the Exhale spa and fitness business.
(c) Transaction costs - During Q4 2021, we recognized $26 million of transaction costs related to the acquisition of ALG.
(d) Fund deficits - During Q4 2021 and Q4 2020, we recognized net deficits on certain funds due to the timing of revenue and expense recognition that we intend to recover in future periods.
(e) Unrealized (gains) losses - During Q4 2021 and Q4 2020, we recognized unrealized losses and gains, respectively, due to the change in fair value of our marketable securities.
(f) Asset impairments - During Q4 2021 and Q4 2020, we recognized impairment charges related to intangible assets.
(g) Utilization of Avendra and other proceeds - During Q4 2021 and Q4 2020, we recognized expenses related to the partial utilization of the Avendra LLC sale proceeds for the benefit of our hotels. The gain recognized in conjunction with the sale of Avendra LLC was included as a special item during the year ended December 31, 2017.
(h) Restructuring expenses - During Q4 2020, we recognized $4 million in restructuring expenses related to severance and related charges as a result of the COVID-19 pandemic.
(i) Fund deficits not recovered - Represents the reversal of costs incurred on behalf of managed and franchised properties that we do not intend to recover from hotel owners, which was reported as a special item during the nine months ended September 30, 2020.
Page 15
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Financial Measure: Losses per Diluted Share and Net Loss Attributable to Hyatt Hotels Corporation, to Losses per Diluted Share, Adjusted for Special Items and Adjusted Net Loss Attributable to Hyatt Hotels Corporation - Year Ended December 31, 2021 and December 31, 2020
(in millions, except per share amounts)
Location on Consolidated Statements of Income (Loss)
Year Ended December 31,
2021
2020
Net loss attributable to Hyatt Hotels Corporation
$
(222)
$
(703)
Losses per diluted share
$
(2.13)
$
(6.93)
Special items
(Gains) losses on sales of real estate and other (a)
Gains (losses) on sales of real estate and other
(414)
36
Unconsolidated hospitality ventures (b)
Equity earnings (losses) from unconsolidated hospitality ventures
(100)
(1)
Unrealized (gains) losses (c)
Other income (loss), net
(14)
13
Realized gains
Other income (loss), net
(2)
(6)
Transaction costs (d)
Other income (loss), net
46
—
Fund deficits (e)
Revenues for the reimbursement of costs incurred and costs incurred on behalf of managed and franchised properties; other income (loss), net
43
8
Utilization of Avendra and other proceeds (f)
Costs incurred on behalf of managed and franchised properties; depreciation and amortization
16
36
Asset impairments (g)
Asset impairments
8
62
Restructuring expenses (h)
Other income (loss), net
3
73
Other
Other income (loss), net
3
(2)
Special items - pre-tax
(411)
219
Income tax benefit (provision) for special items
Benefit (provision) for income taxes
88
(63)
Total special items - after-tax
(323)
156
Special items impact per diluted share
$
(3.11)
$
1.53
Adjusted net loss attributable to Hyatt Hotels Corporation
$
(545)
$
(547)
Losses per diluted share, adjusted for special items
$
(5.24)
$
(5.40)
(a) (Gains) losses on sales of real estate and other - During the year ended December 31, 2021 (YTD 2021), net gains were $414 million, primarily driven by a $305 million pre-tax gain related to the sale of Hyatt Regency Lake Tahoe Resort, Spa and Casino and a $104 million pre-tax gain related to the sale of Hyatt Regency Lost Pines Resort and Spa. During the year ended December 31, 2020 (YTD 2020), net losses were $36 million, primarily driven by a $30 million pre-tax loss on the sale of the entities which own Hyatt Regency Baku.
(b) Unconsolidated hospitality ventures - During YTD 2021, we recognized a $69 million pre-tax gain on the purchase of the remaining 50% interest in the entities that own Grand Hyatt São Paulo and $31 million of net gains related to sales activity of certain equity method investments.
(c) Unrealized (gains) losses - During YTD 2021 and YTD 2020, we recognized unrealized gains and losses, respectively, due to the change in fair value of our marketable securities.
(d) Transaction costs - During YTD 2021, we recognized $45 million of transaction costs related to the acquisition of ALG.
(e) Fund deficits - During YTD 2021 and YTD 2020, we recognized net deficits on certain funds due to the timing of revenue and expense recognition that we intend to recover in future periods.
(f) Utilization of Avendra and other proceeds - During YTD 2021 and YTD 2020, we recognized expenses related to the partial utilization of the aforementioned Avendra LLC sale proceeds for the benefit of our hotels.
(g) Asset impairments - During YTD 2021, we recognized $8 million of impairment charges related to intangible assets. During YTD 2020, we recognized $62 million of impairment charges related to goodwill, property and equipment, operating lease right-of-use assets, and intangible assets.
(h) Restructuring expenses - During YTD 2020, we recognized $73 million in restructuring expenses related to severance and related charges as a result of the COVID-19 pandemic.
Page 16
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Financial Measure: SG&A Expenses to Adjusted SG&A Expenses
Results of operations as presented on the consolidated statements of income (loss) include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in SG&A expenses and are completely offset by the corresponding net gains and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings (losses). SG&A expenses also include expenses related to stock-based compensation. Below is a reconciliation of this measure excluding the impact of our rabbi trust investments and stock-based compensation expense.
(in millions)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change ($)
Change (%)
2021
2020
Change ($)
Change (%)
SG&A expenses
$
116
$
104
$
12
9.8
%
$
366
$
321
$
45
13.7
%
Less: rabbi trust impact
(8)
(32)
24
77.2
%
(38)
(52)
14
28.5
%
Less: stock-based compensation expense
(8)
(4)
(4)
(138.8)
%
(50)
(24)
(26)
(113.7)
%
Adjusted SG&A expenses
$
100
$
68
$
32
44.3
%
$
278
$
245
$
33
13.1
%
The table below provides a segment breakdown for Adjusted SG&A expenses.
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change ($)
Change (%)
2021
2020
Change ($)
Change (%)
Americas management and franchising
$
15
$
21
$
(6)
(31.5)
%
$
50
$
59
$
(9)
(14.7)
%
ASPAC management and franchising
13
10
3
22.3
%
42
36
6
15.0
%
EAME/SW Asia management and franchising
5
10
(5)
(47.4)
%
26
39
(13)
(32.6)
%
Owned and leased hotels
3
3
—
(11.0)
%
12
13
(1)
(11.5)
%
Apple Leisure Group (a)
23
—
23
NM
23
—
23
NM
Corporate and other
41
24
17
71.2
%
125
98
27
27.2
%
Adjusted SG&A expenses
$
100
$
68
$
32
44.3
%
$
278
$
245
$
33
13.1
%
(a)Includes activity for the two month period of ownership following the acquisition of ALG during the year ended December 31, 2021.
Page 17
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Financial Measure: Guidance: SG&A Expenses to Adjusted SG&A Expenses
For the Year Ended December 31, 2022
No additional disposition of acquisition activity beyond what has been completed as of the date of this release has been included in the forecast. The Company's outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that the Company will achieve these results. Results of operations as presented on the consolidated statements of income (loss) include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in SG&A expenses and are completely offset by the corresponding net gains and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings (losses). SG&A expenses also include expenses related to stock-based compensation. Below is a reconciliation of this forecasted measure excluding the impact of our rabbi trust investments and forecasted stock-based compensation expense.
(in millions)
Year Ended December 31, 2022 Forecast Range
Low Case
High Case
SG&A expenses
$
517
$
522
Less: rabbi trust impact (a)
—
—
Less: stock-based compensation expense
(57)
(57)
Adjusted SG&A expenses
$
460
$
465
(a) Impact of rabbi trust is not forecasted for the year ended December 31, 2022 as performance of underlying invested assets is not estimable.
Page 18
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Financial Measure: Comparable Owned and Leased Hotels Operating Margin to Owned and Leased Hotels Operating Margin
Below is a reconciliation of consolidated owned and leased hotels revenues and expenses, as used in calculating comparable owned and leased hotels operating margin percentages. Results of operations as presented on the consolidated statements of income (loss) include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in owned and leased hotels expenses and are completely offset by the corresponding net gains and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings (losses). Below is a reconciliation of the margins excluding the impact of our rabbi trusts and excluding the impact of non-comparable hotels.
(in millions)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
Change ($)
Change (%)
2021
2020
Change ($)
Change (%)
Revenues
Comparable owned and leased hotels
$
246
$
69
$
177
255.7
%
$
688
$
391
$
297
75.9
%
Non-comparable owned and leased hotels
34
22
12
52.9
%
150
122
28
22.7
%
Owned and leased hotels revenues
$
280
$
91
$
189
206.6
%
$
838
$
513
$
325
63.2
%
Expenses
Comparable owned and leased hotels
$
184
$
93
$
91
98.7
%
$
578
$
457
$
121
26.4
%
Non-comparable owned and leased hotels
35
34
1
0.3
%
142
162
(20)
(12.7)
%
Rabbi trust impact
—
5
(5)
(81.5)
%
5
8
(3)
(29.3)
%
Owned and leased hotels expenses
$
219
$
132
$
87
67.0
%
$
725
$
627
$
98
15.7
%
Owned and leased hotels operating margin percentage
21.4
%
(44.3)
%
65.7
%
13.4
%
(22.2)
%
35.6
%
Comparable owned and leased hotels operating margin percentage
24.8
%
(34.6)
%
59.4
%
15.9
%
(17.0)
%
32.9
%
Page 19
Hyatt Hotels Corporation
Owned and Leased Hotels Segment Mix by Market and Brand
Owned and Leased Hotels Segment Adjusted EBITDA Mix by Market
Region
% of 2021 Earnings (a)
Top 10 U.S. States
% of 2021 Earnings (a)
Top 5 International Markets
% of 2021 Earnings (a)
United States
98%
Florida
46%
Switzerland
7%
Other Americas
4%
Texas
35%
Aruba
7%
EAME/SW Asia
(2)%
Arizona
18%
France
5%
Nevada
14%
Netherlands
(6)%
California
13%
Germany
(7)%
Connecticut
3%
Wisconsin
1%
Maryland
(3)%
Illinois
(5)%
New York
(24)%
Total Top 10
98%
Total Top 5
6%
Other US
—%
Other International
(4)%
Total
100%
Total U.S.
98%
Total International
2%
Owned and Leased Hotels Segment Adjusted EBITDA Mix by Brand
Brand
% of 2021 Earnings (a)
Alila, Andaz, Grand Hyatt, Miraval, Park Hyatt, The Unbound Collection by Hyatt, Destination by Hyatt
61
%
Hyatt, Hyatt Centric, Hyatt Regency, Hyatt Place
39
%
Total Brands
100
%
(a) Earnings represent 2021 owned and leased hotels segment Adjusted EBITDA of $77 million, excluding our pro rata share of unconsolidated hospitality ventures Adjusted EBITDA. Adjusted EBITDA includes intercompany expenses related to management fees paid to the Company's management and franchising segments, which are eliminated in consolidation.
Page 20
Hyatt Hotels Corporation
Pipeline Approximate Mix
(Pipeline: approximately 540 Hotels or approximately 113,000 Rooms)
December 31, 2021
Approx. Hotels
Approx. Rooms
Segment
Americas
170
27,000
ASPAC
220
53,000
EAME/SW Asia
120
24,000
ALG
30
9,000
Total
540
113,000
Market
Greater China
160
42,000
United States
130
19,000
India
50
9,000
Mexico
30
7,000
Spain
20
4,000
Other
150
32,000
Total
540
113,000
Brand
Park Hyatt, Grand Hyatt, Andaz
60
19,000
Hyatt Regency
90
25,000
Hyatt Centric
50
9,000
The Unbound Collection by Hyatt
20
3,000
Hyatt Place, Hyatt House, UrCove, Caption
250
41,000
Alila, Thompson Hotels, JdV by Hyatt, Destination by Hyatt, Miraval
40
7,000
AMR Collection, Hyatt Ziva, Hyatt Zilara
30
9,000
Total
540
113,000
Ownership / Contract Type
Managed
330
81,000
Franchised
210
32,000
Total
540
113,000
Page 21
DEFINITIONS
Adjusted Earnings Before Interest Expense, Taxes, Depreciation, and Amortization (Adjusted EBITDA) and EBITDA
We use the terms Adjusted EBITDA and EBITDA throughout this earnings release. Adjusted EBITDA and EBITDA, as we define them, are non-GAAP measures. We define consolidated Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus our pro rata share of unconsolidated owned and leased hospitality ventures Adjusted EBITDA based on our ownership percentage of each owned and leased venture, adjusted to exclude the following items:
•interest expense;
•benefit (provision) for income taxes;
•depreciation and amortization;
•amortization of management and franchise agreement assets and performance cure payments, which constitute payments to customers (Contra revenue);
•revenues for the reimbursement of costs incurred on behalf of managed and franchised properties;
•costs incurred on behalf of managed and franchised properties that we intend to recover over the long term;
•equity earnings (losses) from unconsolidated hospitality ventures;
•stock-based compensation expense;
•gains (losses) on sales of real estate and other;
•asset impairments; and
•other income (loss), net
We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA of each of our reportable segments and eliminations to corporate and other Adjusted EBITDA.
Our board of directors and executive management team focus on Adjusted EBITDA as one of the key performance and compensation measures both on a segment and on a consolidated basis. Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations both on a segment and on a consolidated basis. Our president and chief executive officer, who is our chief operating decision maker, also evaluates the performance of each of our reportable segments and determines how to allocate resources to those segments, in significant part, by assessing the Adjusted EBITDA of each segment. In addition, the compensation committee of our board of directors determines the annual variable compensation for certain members of our management based in part on consolidated Adjusted EBITDA, segment Adjusted EBITDA, or some combination of both.
We believe Adjusted EBITDA is useful to investors because it provides investors with the same information that we use internally for purposes of assessing our operating performance and making compensation decisions and facilitates our comparison of results with results from other companies within our industry.
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Adjusted EBITDA excludes certain items that can vary widely across different industries and among companies within the same industry including interest expense and benefit (provision) for income taxes, which are dependent on company specifics, including capital structure, credit ratings, tax policies, and jurisdictions in which they operate; depreciation and amortization which are dependent on company policies including how the assets are utilized as well as the lives assigned to the assets; Contra revenue which is dependent on company policies and strategic decisions regarding payments to hotel owners; and stock-based compensation expense which varies among companies as a result of different compensation plans companies have adopted. We exclude revenues for the reimbursement of costs and costs incurred on behalf of managed and franchised properties which relate to the reimbursement of payroll costs and for system-wide services and programs that we operate for the benefit of our hotel owners as contractually we do not provide services or operate the related programs to generate a profit over the terms of the respective contracts. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Therefore, we exclude the net impact when evaluating period-over-period changes in our operating results. Adjusted EBITDA includes costs incurred on behalf of our managed and franchised properties related to system-wide services and programs that we do not intend to recover from hotel owners. Finally, we exclude other items that are not core to our operations, such as asset impairments and unrealized and realized gains and losses on marketable securities.
Adjusted EBITDA and EBITDA are not substitutes for net income (loss) attributable to Hyatt Hotels Corporation, net income (loss), or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA and EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income (loss) generated by our business. Our management compensates for these limitations by referencing our GAAP results and using Adjusted EBITDA supplementally.
Adjusted EBITDA Margin
We define Adjusted EBITDA margin as Adjusted EBITDA divided by total revenues excluding Contra revenue and revenues for the reimbursement of costs incurred on behalf of managed and franchised properties (Adjusted revenues). We believe Adjusted EBITDA margin is useful to investors because it provides investors the same information that the Company uses internally for purposes of assessing operating performance.
Adjusted Net Income (Loss)
Adjusted net income (loss), as we define it, is a non-GAAP measure. We define Adjusted net income (loss) as net income (loss) attributable to Hyatt Hotels Corporation excluding special items, which are those items deemed not to be reflective of ongoing operations. We consider Adjusted net income (loss) to be an indicator of operating performance because excluding special items allows for period-over-period comparisons of our ongoing operations.
Adjusted net income (loss) is not a substitute for net income (loss) attributable to Hyatt Hotels Corporation, net income (loss), or any other measure prescribed by GAAP. There are limitations to using
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non-GAAP measures such as Adjusted net income (loss). Although we believe that Adjusted net income (loss) can make an evaluation of our operating performance more consistent because it removes special items that are deemed not to be reflective of ongoing operations, other companies in our industry may define Adjusted net income (loss) differently than we do. As a result, it may be difficult to use Adjusted net income (loss) or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted net income (loss) should not be considered as a measure of the income (loss) generated by our business. Our management compensates for these limitations by reference to its GAAP results and using Adjusted net income (loss) supplementally.
Adjusted Selling, General, and Administrative (SG&A) Expenses
Adjusted SG&A expenses, as we define it, is a non-GAAP measure. Adjusted SG&A expenses exclude the impact of deferred compensation plans funded through rabbi trusts and stock-based compensation expense. Adjusted SG&A expenses assist us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations, both on a segment and consolidated basis.
Comparable Owned and Leased Hotels Operating Margin
We define comparable owned and leased hotels operating margin as the difference between comparable owned and leased hotels revenues and comparable owned and leased hotels expenses. Comparable owned and leased hotels revenues is calculated by removing non-comparable hotels revenues from owned and leased hotels revenues as reported in our consolidated statements of income (loss). Comparable owned and leased hotels expenses is calculated by removing both non-comparable owned and leased hotels expenses and the impact of expenses funded through rabbi trusts from owned and leased hotels expenses as reported in our consolidated statements of income (loss). We believe comparable owned and leased hotels operating margin is useful to investors because it provides investors the same information that the Company uses internally for purposes of assessing operating performance.
Comparable Hotels
"Comparable system-wide hotels" represents all properties we manage or franchise, including owned and leased properties, and that are operated for the entirety of the periods being compared and that have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Effective December 31, 2021, hotels that suspended operations due to the COVID-19 pandemic and have not yet re-opened are no longer included in our definition of comparable system-wide hotels. We may use variations of comparable system-wide hotels to specifically refer to comparable system-wide Americas full service hotels, including our wellness resorts, our select service hotels, or our all-inclusive resorts, for those properties that we manage or franchise within the Americas management and franchising segment, comparable system-wide ASPAC full service or select service hotels for those properties we manage or franchise within the ASPAC management and franchising segment, or comparable system-wide EAME/SW Asia full service or select service hotels for those properties that we manage or franchise within the EAME/SW Asia management and franchising segment. "Comparable owned and leased hotels" represents all properties we own or lease and that are operated and consolidated for the entirety of the periods being compared and have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Comparable system-wide
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hotels and comparable owned and leased hotels are commonly used as a basis of measurement in our industry. "Non-comparable system-wide hotels" or "non-comparable owned and leased hotels" represent all hotels that do not meet the respective definition of "comparable" as defined above.
Constant Dollar Currency
We report the results of our operations both on an as-reported basis, as well as on a constant dollar basis. Constant dollar currency, which is a non-GAAP measure, excludes the effects of movements in foreign currency exchange rates between comparative periods. We believe constant dollar analysis provides valuable information regarding our results as it removes currency fluctuations from our operating results. We calculate constant dollar currency by restating prior-period local currency financial results at the current period's exchange rates. These restated amounts are then compared to our current period reported amounts to provide operationally driven variances in our results.
Average Daily Rate (ADR)
ADR represents hotel room revenues, divided by the total number of rooms sold in a given period. ADR measures the average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in our industry, and we use ADR to assess the pricing levels that we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described below.
Occupancy
Occupancy represents the total number of rooms sold divided by the total number of rooms available at a hotel or group of hotels. Occupancy measures the utilization of a hotel's available capacity. We use occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable ADR levels as demand for hotel rooms increases or decreases.
Revenue per Available Room (RevPAR)
RevPAR is the product of the average daily rate and the average daily occupancy percentage. RevPAR does not include non-room revenues, which consist of ancillary revenues generated by a hotel property, such as food and beverage, parking, and other guest service revenues. Our management uses RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate hotel performance on a regional and segment basis. RevPAR is a commonly used performance measure in our industry.
RevPAR changes that are driven predominantly by changes in occupancy have different implications for overall revenue levels and incremental profitability than do changes that are driven predominantly by changes in average room rates. For example, increases in occupancy at a hotel would lead to increases in room revenues and additional variable operating costs, including housekeeping services, utilities, and room amenity costs, and could also result in increased ancillary revenues, including food and beverage. In contrast, changes in average room rates typically have a greater impact on margins and profitability as average room rate changes result in minimal impacts to variable operating costs.
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Net Package ADR
Net Package ADR represents net package revenues, divided by the total number of rooms sold in a given period. Net Package ADR measures the average room price attained by a hotel, and Net Package ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. Net Package ADR is a commonly used performance measure in our industry, and we use Net Package ADR to assess the pricing levels that we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described above.
Net Package RevPAR
Net Package RevPAR is the product of the net package ADR and the average daily occupancy percentage. Net Package RevPAR generally includes revenue derived from the sale of package revenue comprised of rooms revenue, food and beverage, and entertainment, net of compulsory tips paid to employees. Our management uses Net Package RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate hotel performance on a regional and segment basis. Net Package RevPAR is a commonly used performance measure in our industry.
Net Financed Contracts
Net Financed Contracts represent Unlimited Vacation Club contracts signed during the period for which an initial cash down payment has been received and the remaining balance is contractually due in monthly installments over an average term of less than 4 years. The Net Financed Contract balance is calculated as the unpaid portion of membership contracts reduced by expenses related to fulfilling the membership club contracts and further reduced by an allowance for future estimated uncollectible installments. Net Financed Contract balances are not reported on our consolidated balance sheets as our right to collect future installments is conditional on our ability to provide continuous access to member benefits at AMR Collection resorts over the contract term, and the associated expenses to fulfill the membership contracts become liabilities of the Company only after the installments are collected. We believe Net Financed Contracts is useful to investors as it represents an estimate of future cash flows due in accordance with contracts signed in the current period. At December 31, 2021, the Net Financed Contract balance not recorded on our consolidated balance sheet was $133 million.
Net Deferrals
Net Deferrals represent the change in contract liabilities associated with the Unlimited Vacation Club membership contracts less the change in deferred cost assets associated with the contracts. The contract liabilities and deferred cost assets are recognized as revenue and expense, respectively, on our consolidated statements of income (loss) over the customer life, which ranges from 3 to 25 years.
