Hyatt Hotels Corporation announced an increase to its 2021 net rooms growth outlook and the completion of two transactions as part of its ongoing capital strategy. Details are as follows:
On June 4, 2021, a Hyatt affiliate and Service Properties Trust, or SVC, reached an agreement with respect to 22 Hyatt Place hotels in the U.S. owned by subsidiaries of SVC. Under the terms of the amended agreement effective April 1, 2021, Hyatt will continue to manage 17 of the 22 Hyatt Place hotels owned by subsidiaries of SVC for a 10-year term. As a result of the amended agreement, Hyatt is increasing its net rooms growth outlook for 2021 to approximately 6.0%, up from the prior expectation of greater than 5.0%.
On June 4, 2021, a Hyatt affiliate sold the 490-room Hyatt Regency Lost Pines Resort and Spa near Austin, Texas for approximately $275 million to an unrelated third party and entered into a long-term management agreement for the property upon sale. The owner anticipates enhancing and expanding this unique resort destination located on 405 acres along the banks of the Colorado River.
On June 3, 2021, a Hyatt affiliate acquired the 59-room Ventana Big Sur, an Alila Resort, located in Big Sur, California for approximately $148 million, securing the Company’s long-term brand presence in a highly sought-after resort destination. The resort, situated on 162 acres in one of the world’s premier leisure destinations, also includes 63 distinctive camping areas and 15 tent cabins and is one of three world-class Alila resorts operating in California. The resort is well-positioned to be considered as part of Hyatt’s capital strategy and Hyatt intends to turn to evaluate the sale of this asset while retaining a long-term management agreement.
With the completion of both asset transactions at attractive values, Hyatt remains on track to realize net proceeds from the sale of real estate of approximately $1.5 billion by March 2022 as part of its capital strategy announced in March 2019. To date, and including the net proceeds from the aforementioned transactions, the Company has realized approximately $1.1 billion in net proceeds while continuing to expand its management and franchising business. In addition to reducing the earnings from owned and leased hotels, Hyatt has expanded its managed and franchised property base by approximately 150 hotels, or by 18%, from March 2019 to May 2021 that will drive an increased percentage of earnings coming from management and franchising activity.
The company’s 2021 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.