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    Earnings call· Jun 2026(Q2 FY26)

    Hyatt Hotels Q2 FY26 earnings call H

    Jul 30, 2026 Source

    Executive summary

    Hyatt Q2 FY26 — Strong Fee Growth and Record Pipeline Despite Regional Headwinds

    Hyatt delivered strong Q2 FY26 results, driven by its asset-light model, premium brands, and robust fee growth, despite regional challenges in the Middle East and Mexico. The company reported strong RevPAR, record development pipeline, and increased loyalty membership, reinforcing its strategy for durable long-term fee growth and cash flow generation. Management remains confident in its full-year outlook and long-term organic growth targets, emphasizing the value of fee growth over net rooms growth.

    Highlights

    5

    • System-wide RevPAR grew 5.9% in Q2 FY26, exceeding expectations.

    • Gross fees increased 8% to $324 million in Q2 FY26, driven by strong performance and new hotels.

    • World of Hyatt membership grew 17% year-over-year to approximately 69 million members.

    • Development pipeline reached a record of approximately 154,000 rooms, up 10% year-over-year.

    • Adjusted EBITDA increased approximately 9% year-over-year in Q2 FY26, adjusted for asset sales.

    Concerns

    5

    • RevPAR in the Middle East declined 36% year-over-year in Q2 FY26 due to ongoing conflict.

    • Net package RevPAR in the all-inclusive portfolio declined 1.2% in Q2 FY26, impacted by a security incident in Mexico and lower flight capacity.

    • Expected full-year fees reduced by approximately $10 million due to Middle East and $15 million due to Mexico compared to prior outlook.

    • Transaction for Hyatt Grand Central New York sale no longer expected to close in 2026.

    • Some expected Q4 FY26 room openings may slip into FY27 due to heavier PIPs and complexity of luxury/full-service hotels.

    Guidance & targets

    14
    CategoryTargetConfidence
    Full-year System-wide RevPAR growth
    3.5% to 4.5%
    high materiality
    High
    Full-year US RevPAR growth
    3% to 4%
    medium materiality
    High
    Full-year International RevPAR growth (ex-Middle East)
    slightly higher than the United States
    medium materiality
    Medium
    Full-year Net Rooms Growth
    approximately 6%
    high materiality
    High
    Full-year Gross Fees
    $1.305 billion to $1.335 billion
    high materiality
    High
    Full-year Adjusted EBITDA
    $1.155 billion to $1.205 billion
    high materiality
    High
    Full-year Adjusted Free Cash Flow
    $580 million to $630 million
    high materiality
    High
    Full-year Capital Returns to Shareholders
    $325 million and $375 million
    medium materiality
    High
    Q3 Global RevPAR growth
    towards the low end of our full year outlook range
    medium materiality
    Medium
    Q3 Net Package RevPAR
    moderately below last year
    medium materiality
    Medium
    Q3 Gross Fees growth
    high single-digit range
    medium materiality
    Medium
    Long-term Organic Net Rooms Growth
    6% to 8%
    high materiality
    High
    Long-term Fee Growth
    9% to 11%
    high materiality
    High
    Q1 FY27 All-inclusive Pace (Americas)
    high single digits
    low materiality
    Medium

    Segment performance

    11
    SegmentRevenueYoYQoQMargin
    System-wide
    RevPAR growth exceeded expectations, driven by high-end travelers and luxury portfolio, with some FIFA World Cup benefit.
    		—5.9%——
    United States
    RevPAR growth driven by robust leisure travel and healthy group demand. FIFA World Cup contributed approximately 70 bps to RevPAR growth.
    		—6.7%——
    International (ex-Middle East)
    Strong growth reflecting robust international travel demand and continued strength in higher-end travel.
    		—7.5%——
    Americas (ex-United States)
    Benefited from strong regional performance and international demand from the FIFA World Cup.
    		—9.5%——
    Greater China
    Supported by leisure transient demand and strong average rate growth across largest markets. Luxury properties up 11%.
    		—7.2%——
    Asia Pacific (ex-Greater China)
    Robust RevPAR growth reflecting strong inbound travel and demand in key markets.
    		—10%——
    Europe
    Healthy domestic leisure demand offset softer inbound travel from the Middle East.
    		—4.5%——
    Middle East
    RevPAR declined due to ongoing conflict in the region.
    		—-36%——
    All-inclusive portfolio
    Impacted by security incident in Mexico and lower flight capacity. Resorts in Dominican Republic up over 8%.
    Net package RevPAR: -1.2%
    		————
    Owned and Leased
    Adjusted EBITDA increased, adjusted for asset sales, reflecting high-end positioning.
    		———16% (adjusted EBITDA growth)
    Distribution
    Adjusted EBITDA declined in line with expectations due to temporary factors including hotel closures in Jamaica and softer demand in Mexico, and lower demand for 4-star properties.
    		———Declined (adjusted EBITDA)

    Operational metrics

    19
    Business transient RevPAR growth
    approximately 2%YoY
    Q2 FY26

    Solid performance in business travel.

    Group RevPAR growth
    more than 7%YoY
    Q2 FY26

    Compared to last year, with World Cup host cities delivering over 13% in June.

    Leisure transient RevPAR growth
    approximately 7%YoY
    Q2 FY26

    Led by luxury brands, with World Cup host cities in US generating over 17% in June.

    Luxury and Lifestyle portfolios RevPAR index increase
    nearly 3 points
    H1 FY26

    Reflects market share gains.

    World of Hyatt members
    approximately 69 million17% increase YoY
    Q2 FY26 end

    Growing membership and engagement.

    Net Rooms Growth (2-year stack)
    16%
    Q1-Q2 FY24 to Q1-Q2 FY26

    Reflects persistent significant net rooms growth over a longer period.

    Organic Net Rooms Growth (8-year compounded)
    7%
    FY17-FY25

    Historical organic growth rate.

    Total Liquidity
    approximately $2.1 billion
    June 30, 2026

    Includes $1.5 billion of available capacity on revolving credit facility.

    Capital Returned to Shareholders (YTD)
    approximately $175 million
    YTD Q2 FY26

    Total returned year-to-date.

    Capital Returned to Shareholders (Q2)
    approximately $26 million
    Q2 FY26

    Returned during the second quarter, impacted by Investor Day blackout period.

    Remaining Share Repurchase Authorization
    approximately $1.5 billion
    Q2 FY26 end

    Remaining under current authorization.

    Middle East conflict impact on full-year fees
    approximately $10 million
    FY26

    Expected reduction in full-year fees due to hotel revenues significantly below last year.

    Mexico all-inclusive impact on full-year fees
    approximately $15 million
    FY26

    Impact to fees compared to prior outlook due to slower than expected recovery in booking trends.

    Distribution segment year-over-year decline
    approximately $25 millionYoY
    FY26

    Expected decline in adjusted EBITDA for the full year compared to 2025.

    Adjusted EBITDA to Adjusted Free Cash Flow conversion
    at least 50%
    FY26

    Target for the full year.

    Group pace for US full-service hotels
    mid-single digitsup
    H2 FY26

    Strong forward booking trends.

    PMS cost reduction for owners
    40%
    Ongoing

    Result of investment in new technology platforms.

    Financing vehicle for Hyatt Studios
    $0.5 billion
    Ongoing

    Aims to accelerate development of Hyatt Studios hotels.

    Organic Fee Growth (5-year compounded)
    over 10%
    Last 5 years

    Exceeds larger peers' total fee growth over the same period.

    Industry KPIs

    3
    MetricValueDetails
    Comparable sales comps5.9%%
    Group booking pace booking window96-97%%
    Net unit growth development pipeline154,000 roomsrooms

    Product announcements

    3
    ProductTypeDetails
    Miraval The Red Sealaunch
    The Barai Hua Hin (Unbound Collection by Hyatt)launch
    Hyatt Select brand in Chinese Mainlandexpansion

    Deals & partnerships

    3
    Air CanadaLoyalty program collaboration

    Brings two highly engaged loyalty programs together, giving members more ways to earn and redeem rewards and expanding experiences across both networks.

    Dossen GroupMaster franchise agreement for Hyatt Select brand in Chinese Mainland

    Combines Hyatt's global brand recognition with Dossen Group's local market expertise and development capabilities.

    Hall FinancialFinancing vehicle for Hyatt Studios$0.5 billion

    Provides a financing vehicle to address a key need in the owner community for construction financing, with some credit support from Hyatt.

    Risks & headwinds

    4
    Regional conflict in the Middle EastQ2 FY26 and full-year FY26

    RevPAR declined 36% in Q2 FY26; estimated $10 million reduction in full-year fees.

    Mitigation: None stated, but impact is factored into guidance.

    Security incident in Mexico and lower flight capacityQ2 FY26 and full-year FY26

    Net package RevPAR in all-inclusive portfolio declined 1.2% in Q2 FY26; estimated $15 million impact to full-year fees compared to prior outlook.

    Mitigation: Booking trends are improving sequentially, and Q1 FY27 pace is up in high single digits for the region, suggesting recovery.

    Potential slippage of Q4 FY26 room openings into FY27Q4 FY26 to Q1 FY27

    Approximately 50% of pipeline openings are in Q4 FY26, with over 60% being luxury, lifestyle, and full-service hotels, which are more complicated to forecast. Heavier PIPs for new conversion brands also contribute.

    Mitigation: Management has proactively adjusted full-year net rooms growth outlook to approximately 6% and remains confident in long-term organic growth targets (6-8%).

    Hyatt Grand Central New York sale delayFY26

    Transaction no longer expected to close in 2026.

    Mitigation: Company remains active in the market for asset sales to unlock value, pursuing transactions that retain hotels under long-term management/franchise agreements.

    What to watch in Q3 FY26

    5

    Net Rooms Growth

    Next quarter (Q3 FY26) and Q4 FY26
    Current4.4% (Q2 FY26)
    TargetAcceleration towards 6% full-year target, with Q4 openings materializing or slipping.

    Why it matters

    Verifies the pace of pipeline conversion and the realization of the full-year net rooms growth target, which impacts future fee growth.

    We've adjusted our full year outlook range to reflect the large number of fourth quarter openings, some of which could slip into 2027. I want to be clear, our confidence in delivering on the strong organic growth we outlined in our Investor Day remains very high.

    Q&A highlights

    6

    Clarify if the NRG adjustment for FY26 is due to expected rooms flipping to FY27 or proactive conservatism given Q4 concentration.

    The adjustment is proactively conservative. Some Q4 openings, especially luxury/full-service, are complex and may slip into 2027. The company emphasizes fee growth as the key value driver and reaffirms long-term organic NRG target of 6-8%.

    “So we're taking a, I would say, a proactively conservative estimate on how the year will actually shape out. The key from my perspective isn't what type of focus on one quarter to the next? Because first of all, the net rooms growth figure is not what I think is going to drive value, its net fee growth.”

    asked by Benjamin Chaiken · answered by Mark Hoplamazian

    2 min read6 chapters

    Detailed Narrative

    01

    Asset-Light Strategy and Fee Growth

    Hyatt continues to execute its asset-light strategy, focusing on premium brands and a growing commercial platform. This model aims to deliver durable fee growth and increasing cash flow, with the company generating the highest fees per room among its largest peers. The strategy has resulted in industry-leading net rooms growth for 9 years and RevPAR growth for 5 years, creating a powerful compounding effect on fee growth with modest incremental capital.

    02

    World of Hyatt Loyalty Program Expansion

    The World of Hyatt loyalty program is a significant contributor to Hyatt's network effect, ending Q2 FY26 with approximately 69 million members, a 17% increase year-over-year. The program enhances value through collaborations, such as the recent partnership with Air Canada, expanding earning and redemption opportunities. Growing membership strengthens the commercial platform, drives direct channel demand, and supports owner returns.

    03

    Development Pipeline and Brand Expansion

    Hyatt achieved a record development pipeline of approximately 154,000 rooms, up 10% from a year ago, reflecting strong owner preference. Luxury, lifestyle, and inclusive collection brands continue to drive interest, while Essentials brands like Hyatt Select are gaining momentum. A master franchise agreement with Dossen Group will bring the Hyatt Select brand to the Chinese Mainland, leveraging local expertise for thoughtful scaling in a key growth market.

    04

    Regional Performance and Headwinds

    Q2 FY26 saw strong RevPAR growth in the US (6.7%) and Asia Pacific (over 10%), with Greater China up 7.2%. However, the Middle East experienced a 36% RevPAR decline due to regional conflict, and net package RevPAR in the all-inclusive portfolio declined 1.2% due to a security incident in Mexico and lower flight capacity. Management expects these regional headwinds to impact full-year fees by approximately $25 million.

    05

    Owner Value Proposition and System Costs

    Hyatt maintains a strong focus on owner profitability, leveraging its history as a significant hotel owner. The company has undertaken initiatives to reduce system costs, including removing IT implementation fees for new openings and reducing PMS costs by 40% through new platform investments. AI-enabled tools are also being deployed to identify revenue opportunities and optimize vendor costs, contributing to healthy flow-throughs for owners.

    06

    Net Rooms Growth Outlook and Pipeline Conversion

    While Q2 FY26 net rooms growth was 4.4%, the full-year outlook was adjusted to approximately 6% due to potential slippage of Q4 openings into FY27. This is attributed to heavier PIP requirements for new conversion brands (Select, Unscripted) and the complexity of luxury/full-service hotel openings. Despite this, management remains highly confident in achieving its long-term organic net rooms growth target of 6-8%, supported by a strong pipeline and new financing initiatives.

    AI-generated summary of the company’s earnings call. Not investment advice.