Hyatt at 2025 BofA Conference: Strategic Growth and Asset-Light Focus

On Thursday, 04 September 2025, Hyatt Hotels Corporation (NYSE:H) participated in the 2025 BofA Gaming, Lodging & Leisure Conference. The company shared a positive strategic outlook, highlighting the rebound in corporate travel and strength in leisure demand, while acknowledging challenges like supply chain issues and rising costs.

Key Takeaways

• Hyatt aims for 90%+ fee-based earnings by 2027, reinforcing its asset-light strategy.
• The company reported a strong performance in the all-inclusive segment, particularly in the Americas.
• Hyatt plans mid-single-digit net unit growth, driven by international and all-inclusive markets.
• Successful asset sales have generated $5.6 billion, enhancing financial flexibility.
• The co-brand credit card program is under negotiation, with updates expected soon.

Financial Results

• Q2 saw a mid-single-digit increase in the US high-end luxury business, while the upscale segment slightly declined by 1%.
• The all-inclusive business in the Americas reported a 9% increase in festive bookings.
• Fourth-quarter group bookings are positive, with next year expected to see mid to high single-digit growth.
• Asset sales have generated $5.6 billion, with a multiple exceeding 15 times.

Operational Updates

• Corporate travel rebounded in September, with leisure demand remaining robust.
• Business transient windows have shortened compared to the previous year.
• In the all-inclusive segment, 5-star resorts in Latin America and the Caribbean are experiencing 9% growth, while 4-star demand has pulled back.

Future Outlook

• Hyatt anticipates mid-single-digit growth in net rooms, primarily from international markets, all-inclusive resorts, and conversions.
• The company remains committed to achieving 90%+ fee-based earnings by 2027, continuing to reduce its real estate portfolio.
• An update on the co-brand credit card program is expected by the end of this year or early next year.

Q&A Highlights

• The financial dynamics of all-inclusive resorts were discussed, noting that revenues are in dollars while expenses are in pesos, affecting costs.

For further insights, readers are encouraged to refer to the full transcript.

Full transcript - 2025 BofA Gaming, Lodging & Leisure Conference:

Unidentified speaker, Interviewer: Good morning, everybody, and thanks for continuing to join us. So our next fireside chat’s gonna be with the management team from Hyatt Hotels. To my right, president and CEO, Mark Hoplamazian. Mark, thank you for joining us.

Mark Hoplamazian, President and CEO, Hyatt Hotels: Thank

Unidentified speaker, Interviewer: you. And to Mark’s right, Joan Bottarini, chief financial officer. So, Joan, welcome. Thanks for joining us this morning.

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: You for inviting us. So,

Unidentified speaker, Interviewer: yeah, where do where should we start? Like

Mark Hoplamazian, President and CEO, Hyatt Hotels: In your hands, my friend.

Unidentified speaker, Interviewer: Alright. Anything needs to be said, just need to make sure we have these on

Mark Hoplamazian, President and CEO, Hyatt Hotels: the We’ll get to a brief disclaimer about forward looking statements, everyone. You’ve seen these. Please read it in full before we begin. I’m just kidding.

Unidentified speaker, Interviewer: There will be a quiz on line seven. Okay. So I guess where we’ll start is, do you have any hotels in Antarctica?

Mark Hoplamazian, President and CEO, Hyatt Hotels: No. Actually, we don’t. I was fascinated

Unidentified speaker, Interviewer: by that.

Mark Hoplamazian, President and CEO, Hyatt Hotels: Marriott’s opening one in I don’t know where in Antarctica. I think the supply chain’s pretty tough there.

Unidentified speaker, Interviewer: It is. Yeah. The cost is gonna be a little little elevated. So

Mark Hoplamazian, President and CEO, Hyatt Hotels: I I told him I can’t wait to see him on drive to survive, though. Yeah.

Unidentified speaker, Interviewer: Have you done no. Is Hyatt an f one sponsor in any

Mark Hoplamazian, President and CEO, Hyatt Hotels: way? This not at this time.

Unidentified speaker, Interviewer: Not until we get the Grand Prix Chicago, and then we’re in.

Mark Hoplamazian, President and CEO, Hyatt Hotels: No. I don’t think it’s Chicago dependent. We’re we we actually operate in 23 of the 24 places where f one races occur.

Unidentified speaker, Interviewer: Really? Yeah. So one of the hardest ones, but one I definitely remember for Hyatt is Azerbaijan. Azerbaijan. Yeah.

Where you’ve had, like, the one person’s like, I have a legacy going back for Right. Their own owned and operated hotels. Right. I do remember vividly having to ask, okay. Where is this?

You know? Until drive to survive.

Mark Hoplamazian, President and CEO, Hyatt Hotels: And then Then you do Azerbaijan.

Unidentified speaker, Interviewer: Then we all know. Alright. So let’s let’s just start with the macro. You know, easy, big picture, but help us think through a little bit of you know, we’re coming out of the summer lull. You know, second quarter things were, you know, on, you know, on the travel demand side had softened a bit after, you know, kinda liberation day.

What are and kinda how are we feeling as we start to move to the back half of the year here? You know, just give us your kind of 30,000 foot level view.

Mark Hoplamazian, President and CEO, Hyatt Hotels: Yeah. I’ll I’ll do 30. I think Joan has a few data points that would be really interesting to talk about. But we we we described on our last earnings call that we had a very constructive outlook for the rest of the year even though, you know, the the total growth is gonna be relatively modest, but it’s where we stand right now is consistent with what we said before. And the shift that we saw in July is that after that Liberation Day malaise, corporates in our in our world, means larger corporations, were back on the road with with clarity and with conviction, both group and business transient.

Second, leisure continues to hold up really well into the you know, as we look forward into the remainder of the year. So we had said that we have every expectation that business transient will come back beginning in September. And, you know, two days into it is too early for me to declare anything that’s meaningful. But group has held up. Group into next year is very strong.

But I think overall, we feel really good about travel demand. Not not wallowing in that second quarter malaise, but actually feeling a little bit more directional.

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: What I what I would add to just what you said, Mark, is that, you know, we’re we’re really looking at the windows that we’re are seeing across all of the segments. Right? And business transient is the shortest window that we’re seeing today. It’s shorter than it was last year, and so as we look at pace, it may be a little distorted because it’s a little bit lower, and then we see the pickup. So, you know, it’s just that’s the dynamic we’re facing with business transient.

But as Mark said, it’s still looking healthy since our earnings call, and we anticipate that into the the last months of the year. And then as far as leisure, where there is some greater visibility, we look out into festive, and we’re seeing in our resorts in The Americas mid to high single digit pick up in pace, so relative to last year. So still healthy, you know, high end leisure in The Americas. So, you know, that’s that’s continuing to be solid and and what we anticipated, frankly, on our second quarter earnings call. For group, which, you know, has has the longest booking windows, we see the fourth quarter.

We we mentioned that it was positive, low single digits in the fourth quarter, and next year is mid to high single digits. So, you know, group, we’re seeing still healthy bookings, and that gives us a good foundation looking into 2026.

Mark Hoplamazian, President and CEO, Hyatt Hotels: And just to add one one data point, which is our all inclusive business in The Americas is up 9% for festive. So really, really strong.

Unidentified speaker, Interviewer: So a few different things I wanna unpack here. Let’s start with leisure. So one of the big patterns we’ve been seeing all year and really, you know, probably going back into into last year as well is the bifurcation between high and low end. Now your positioning here definitely has skewed to it, you know, largely to that higher end. But, you know, help us see what you’re seeing a little bit as you break that down.

And is there any stabilization that we’re able to call out or or, you know, say that we’re seeing in that kind of that low end customer? Because this gap has been wider, you know, as empirically we look at it as analysts. They look a bit wider and for a bit longer than we’ve seen in prior cycles or mid cycle slowdowns if we were to call

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: it that. Yeah. We are definitely as we look I’ll just I’ll just give US numbers. We ended up, you know, positive in the second quarter. We saw the excuse me.

The the high end business being luxury business being, you know, up in the mid single digits, and then our upscale business being slightly below, you know, a 1% decline. So the the gap has been big and has been wide, and, you know, it’s it’s a reflection of discretionary income at those at those, traveler dynamics, demographics. So still still spending money on, on travel, and, we’re still seeing healthy, luxury performance in those hotels. So the gap has has been wide, and, you know, we expect that to continue into the into the coming months of the year.

Unidentified speaker, Interviewer: You know, Mark, I know you’re a big student of the industry. Just macro wise, when these types of patterns go on, we always have this habit of asking, is it, you know, is it different this time? What kinda what do you see or kinda what are you seeing that’s interesting out there about either reasons that this pattern should converge and we’re just on the cusp of that or we maybe we haven’t seen it yet or, you know, could there be something a little different in the patterns that that we’re seeing out there? Just kinda what’s your what’s your gut feel tell you about, like, what’s happening in it? And again, any interesting, you know, research or or academic views you might have.

Mark Hoplamazian, President and CEO, Hyatt Hotels: Yeah. I think two two separate topics. I propose what Joan was just talking about with respect to the dispersion. I think there’s the the consistent question we keep getting is with respect to leisure or luxury, how long can rates hold up? And the answer is for a long time to come because the compounded growth rate of rates for luxury has has not really far exceeded inflation.

It’s above inflation, but not much from if you measure from pre pandemic times. So when we look into the future and we’re looking at festive, a big chunk of those increases in bookings is rate. And so I don’t and concurrently, two things are happening. Supply is very limited in luxury, and and resorts are hard to build. We’ve got we don’t have a supply new supply growth problem in all inclusive, by the way.

So that goes to how we how what our outlook for net rooms growth looks like into the future. And secondly, you’ve got a larger community of people who have a lot more discretionary income. Now it also means that the wealth gap in The United States is increasing. That’s that’s not great from a from a societal perspective, but from a travel perspective, something like 75% of total travel spend is in the top two quintiles of the of the household income. So we’re playing where the money is, basically, and we see that sustainable.

Second, with respect to midscale and and upscale, that’s a much bigger market. And I think the it’s highly dependent on, I would say, a sense of confidence in the corporate world. And I think the confidence in the corporate world has been sufficiently shaken that that has a that has a knock on effect or a a reverb reverb impact on the on the travelers there who don’t have a big investment income, who don’t have a big portfolio, who are dependent on their jobs and their income to actually support their travel. So discretionary spending has changed. I don’t think that’s permanent.

I think that’s circumstantial. And when economic cycles change, you’ll see that revert to a mean.

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: And, you know, Joan,

Unidentified speaker, Interviewer: you you alluded to all inclusive and obviously the the the strong trends you’re seeing there. Just remind us because they’re sort of as I think about about Hyatt’s portfolio, definitely correct this if I’m if I’m off the mark. Kinda think of two groups. I think of the, you know, the broader distribution segment that sort of you you are powering through ALG broadly. And then I think of the resorts that you manage, which tend to, I think, skew decently higher.

So help us kind of work through. Are you seeing different trends between maybe those two subsegments? Or is all inclusive as a category? And we definitely see this through cruise demand when we look at broader industry stats, just the right place to be,

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: the right value proposition for this customer when you when you nail that, then, you know, actually demand the demand curve looks different. Yeah. The the proportion of our presence in Latin America and The Caribbean for all inclusive is the team here will correct me, but it’s 70 to eighty percent five star. So, you know, that’s that’s our legacy sort of ALG and Playa businesses that where we operate there. So that’s where when you see that 9% growth in in pace, it’s coming from that that particular segmentation within all inclusive.

Now our Bahia Principe resorts that we added to the portfolio, those are primarily Four Star, which provides a benefit to us to be able to serve a expanding customer base that we’re building in The US with our entry into mid scale. So I think over time, this will continue to deliver, you know, sort of that network effect for Hyatt. But those resorts are are high performing. A lot of the, traveler base going into that brand is coming from Europe and Canada and growing, awareness from The US. So we’ve got a mix now.

Now our comparable numbers don’t include Baia Principe because, the joint venture was closed in December. But, you know, those those results are just slightly lower than what we’re seeing in the five star. So definitely a bifurcation, and of course our ALG Vacations Distribution business is serving across the customer base. So what commented on on our earnings call was the fact that we are seeing in the distribution business very strong results in the five star in those markets, which serve our you know, many of our managed all inclusive properties. But, you know, a a a bit of a pullback in demand at that four star level.

And you’re probably uniquely situated

Unidentified speaker, Interviewer: to see this. I’m not sure if your teams have cut this for you, but just, you know, what are you hearing or seeing about Canadian travel and some of the fallout from international inbound? One of the clear beneficiaries we saw in some, you know, anecdotal data points, and this is a little data now looking back a couple months, but was, you know, certainly at that kind of first moment with some of the geopolitical tension. We saw what I call a Canada flyover effect where but but all of a sudden, Dominican Republic spikes and, you know, and and some of the Caribbean destination spike because they’re the play you know, people still wanna go on vacation. You you still wanna be in the sun and probably the middle of the Canadian winter.

So, you know, have you seen that across some of the dynamics you’re seeing? And is is it continuing even even now, or is some of that, you know, some some of that immediate, you know, let’s call

Mark Hoplamazian, President and CEO, Hyatt Hotels: it fallout changed? We saw it. Mexico, Caribbean Mexico, Dominican Republic, Bahamas as well. Significant increase in Canadian occupancy versus American in terms of the total pie chart of demand. And concurrently, a significant decline in Canadians in our in our US resorts.

So we absolutely saw it and it persists. And it persists. Okay.

Unidentified speaker, Interviewer: So let’s let’s move over to the development side of the equation. Obviously, this is probably the biggest biggest single question I get from the investor base in in the hotel universe. And, you know, the high level question at its finest point is, know, you we’re at 1% or below US supply growth. How do we continue to put up, you know, mid single digit growth on the net unit growth side if that’s a know, if that’s a number you’re still comfortable with. Right?

The so help us think through this, you know, the the kind of broad math equation mark at the at the highest level. You know, Hyatt’s got a unique advantage in terms of base. Right? So the percentage base number you need to achieve that’s a little bit different than some of the bigger Yep. The bigger footprint.

But but let let me let’s do it in your words a little bit. What do you need to achieve, and how are you able to continue to put this on the scoreboard for the next several years, not just for, you know,

Mark Hoplamazian, President and CEO, Hyatt Hotels: the next twelve months? Yeah. So first of all, the supply dynamics that you mentioned, the data is absolutely correct, and starts construction starts are weaker. There’s you don’t you know, you can just read lodging econometrics or whatever source you like, and that’s just a fact. The fact the other fact is that a majority of our pipeline is outside The US, and we don’t see supply growth or construction lagging in any market outside The US, including our all inclusive resorts.

We’ve got we’ve had some variability in in China in terms of projects that had started to get back into construction and then new starts that had started to come down and then come back again. And I think that’s just riding the wave of Chinese policy and what’s going on in relation to capital formation on the debt side of the equation. But I think that that’s gonna that’s gonna stabilize, and we’ll see a more consistent basis. But it’s also true that some of our growth in China is conversions. These are adaptive reuse for your code by Hyatt from an office building into hotel.

And so it’s not really dependent on putting a shovel in the ground. So I would say a majority of our pipeline and our outlook for growth is based on international and all inclusive. Another chunk of it is conversions. So actually, US based construction starts is not a it’s a minority of of where we’re seeing sources for new growth. Having said that, our new brand launches, some of which are conversion brands, Hide Select and Unscripted, specifically in the upscale category, and Hide Studios, which has now got a number of multiunit, multi property developers who are putting shovels in the ground.

I expect that to I expect to see that start to increase over time. So that will be additive to a baseline that absolutely keeps us in that mid single digit six to 7% range for, you know, our our foreseeable outlook. And, you know, organic growth or or net rooms growth on the all inclusive side was a big you

Unidentified speaker, Interviewer: know, this kind of pipeline opportunity was, I know, a big feature of kind of how ALG worked for you originally and and and a big, you know, reason for that deal. So what do we see there today? You know, especially if you kind of were to put in at different price points, maybe, you know, the fundamentals have leveled off. But are the whether it’s the cash on cash returns, it’s harder for us, you know, sitting on the outside to underwrite. And I think this is a place where investors fall through a little bit.

It’s hard harder much harder to underwrite international ROIs than it is to kinda, you know, think about US domestic, you know, kinda four wall economics. So do these projects make sense right now? And are we seeing that development climate, you know, remain? Because over years, the the rate growth in those markets was phenomenal if we look over, you know, I think three and five years. Right?

So Yep. So are the absolute returns in a place that we’re still attracting capital to to build in those markets?

Mark Hoplamazian, President and CEO, Hyatt Hotels: The answer is yes. They the the economics are still very compelling. The stability of the returns is very high, and I think that that’s that’s the perception issue that drives lower multiples applied to the property values. So our sale of the Playa real estate was in the eights in terms of multiple. So very high yielding.

I think our you know, the investors to whom we sold it will will realize great returns. They’re getting paid for the a perceived volatility that is in some ways offset by the by the model itself. But that that’s the prevailing rate at which the all inclusive model is more stable and more predictable over time, so you can manage costs better. So you end up yielding higher margins. That’s what I meant by that.

Yeah. So what I what I see is a market that’s absolutely in the it it already happened in the in in Europe where you have institutional capital coming in in size, Blackstone being a major player. And in The US market, the very beginning of institutionalizing ownership, yes, we will still have families and Spanish families and Dominican families that are the core owners, but we’re starting to see and we will see more interest from institutional capital, private equity to begin with, and then we’ll see. I think there’ll there’ll be more and more institutional capital that comes into the market, so there’s more liquidity for owners who wanna release capital to go and build additional hotels. The only issue that has has caused some level of headwind has been the weakening of the US dollar relative to the Mexican peso because all revenues are in dollars and all expenses are in pesos.

So we’ve seen that impact. We saw it more acutely in 2023 where the peso is Big cost headwind. Right. Exactly. And this year, it’s been generally better than last year, but the dollar is not holding up.

So I think that’s something that we’re both well aware of, and I’ll also have new new tools in our toolkit to manage that relative to what we went through in 2023 with respect to cost management. So I think that it’s still compelling. I know it is because we’re seeing a lot of new opportunities, both new builds and portfolios that we are pursuing at the moment.

Unidentified speaker, Interviewer: I think it’s interesting, you know, you sort of the feature set and the movement of institutional capital into this because if there was one single point of contention or concern for Hyatt going back, especially when we hit, you know, a a bit of the speed bump around Liberation Day, it was, oh my gosh. Can we sell $2,000,000,000 of real estate? Right? I can’t imagine how many times poor Adam had to feel that had to feel that question over a over a two month period. Mark, Mark, can you can you help us write the post script on this a little bit in terms of, you know, were you ever nervous?

What are these partners looking for? You know, how did this all come together? You know, because ultimately, it’s exactly what you said you would do. And to the dollar number of, I think, what we were all thinking in terms of, you know, $2,000,000,000 on the real estate side. But it felt so uncertain to such a large part of the investment community that, like, what were you seeing or more confident than we were at that moment in time?

And then, yeah. Like, what does that mean for future deals like this for Hyatt? Meaning the the the ability or desire to go, let’s call it, capital heavy or upfront, and then and then find this Yeah. This capital light elegant solution on the back end.

Mark Hoplamazian, President and CEO, Hyatt Hotels: Look. I think to reduce it to one comment, it’s a time frame. So in August 2021 and November when we closed the ALG acquisition, what happened between those two periods of time is Omicron the Omicron strain came to an end and Delta began. So when you think about a period of uncertainty, a lot of people sitting around saying, what is going on here? You can imagine that very few companies might step forward and say, we’re gonna actually make the biggest acquisition we’ve ever made, which has been transformative for the company.

But this is in a long string of, I would say say, maybe atypical moves that we’ve made since the founding of the company. We were the first company to, you know, ever do a very large scale atrium hotel that everyone in the industry thought was gonna fail, which turned out to be, like, de rigueur, the thing to do. We started in airport hotels at the beginning of the jet age when everyone was in city centers. We went to Asia first, not Europe, when we expanded internationally. So you can go chapter and verse since since 1957, and we’ve taken our own path.

And our my confidence was derived really in the Plias instance. My confidence in the in the ALG acquisition to begin with was superior economic model and form and format for resort. The only resort format that was growing in the most difficult areas for growth for resort construction because of hurricane coverage and whatever, namely Mexico and The Caribbean. And the clear evidence that we had with data that high end leisure, high end resort was the first category to come back after every single downturn. And we were right, not because we’re brilliant, but because we’re students of what’s happened before and we have a long term perspective.

If we were a company trading on what was gonna happen in the fourth quarter of twenty twenty one, there’s no chance we would have bought the company. But it’s turned out to be a massive value creator for for our shareholders. And the same is true for Playa. I mean, we know this market extremely well. We are the biggest player by far.

We know the players on the on the on the real estate side. We deeply understand what’s going on on the demand side through ALG vacations, and we deeply understand how money is made at the resort level. So my confidence level was extremely high. Now if you had said, are you confident you can get it done in the third quarter of this year? I would have said no.

But I’m a 100% sure I can get it done in the next twelve months. So I had no no doubt. I was never concerned about it. Not to mention the fact that because we’re in the market and talking to all these players all the time, we already had a sense for who the the buyer universe was gonna be. And so we had already had pretty clear visibility that there was great demand for that asset base because that asset base is a premier asset base.

They’ve got some of the best locations and at least the Hyatt Zivas and Zilaras that were that were founded back in 2013, the highest quality hotels and the highest performing hotels, highest rated, highest customer service satisfaction scores, highest TripAdvisor ratings. So these are this was a premier portfolio. So that’s the other thing that was that was clear to us. Anyway, so, yeah, that’s where the confidence came from.

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: And I would just say, you know, the the the buyers who we ultimately signed with recognize that the high performing quality of those and location of that portfolio, linking it more directly into the Hyatt ecosystem, meaning the distribution channels that we provide, which were not provided previously, just creates more incremental value. So there was there’s more value to be gained with that transaction because of integrating the platforms together more directly. So, you know, it became it became a no brainer on both sides.

Unidentified speaker, Interviewer: Joe, can you just elaborate a little bit? Because I think this is this is important. I mean, what are those strategic synergies or kind of those things that, you know, when you looked at it or when when some people did I I’m a little bit uniquely advantaged. Actually covered Playa. So, you know, we saw some of these pieces come together.

Right? I think a big one is your, you know, distribution engine through ALG, which was not a pipe that they had. And one thing we knew Playa had always struggled with was, you know, direct bookings. Right? Right.

The wholesale channel is such an important way you source demand for this specific vacation type. But is that the one what were some of the other, you know, features or functions that you looked at when you kinda did your underwriting? Like, this is why this makes sense for Hyatt. This is why

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: it makes sense for us to run these hotels. Well, we already had realized really, really strong penetration from World of Hyatt. So we already knew that our guest base was, you know, highly attracted to this product and these properties in particular. And when you plug into the vacation club, right, which we still manage and are still driving, significant, room nights to the all inclusive resorts there, The the Playa team, you know, they did not have that option, obviously, being just a franchise. And they did not participate in ALGB, which is, you know, the largest tour operator in The US into these markets.

So they were performing as well as they were, even not not, tapping into that channel. So, you know, if you think about, the the need periods and, compression and just creating more demand, this is just a huge opportunity for those assets.

Mark Hoplamazian, President and CEO, Hyatt Hotels: So UVC was the additional big value driver in addition to the ALG vacations plug in.

Unidentified speaker, Interviewer: So so, Marco, this is interesting because this kind of brings me to where I wanted to go, is so you found a, you know, UVC, which was sort of a separate and you kind of unique business within like, I think the three pieces of ALG. Right? Yes. It it caused a few headaches for the investment community largely because of something I’m sure Joe knows better than anybody, which accounting. Right?

In terms of cash flow and this and that just the the timing of the of these functions. So help us think through and you found an elegant solution, elegant home for that business, a way to to kind of, you know, manage that within with within, you know, I think much, you know, you know, within a Hyatt’s portfolio. Where does that leave us as it relates to distribution? Here’s a business that is another unique business, you know, as it relates it’s at scale. Again, you’re gonna add to that scale with Playa.

But, you know, long term, does this does this need to sit within Hyatt? Does it make sense? Is it, you know, just so fundamental in the nature of what you’re trying to drive there? Or can you find, you know, another, like, sort of the right place for that business again as you get more comfortable running and and and operating these hotels, you know, through the management agreements?

Mark Hoplamazian, President and CEO, Hyatt Hotels: Look. I think from the very beginning, we’ve been thoughtful about the potential to find other alternative solutions for how we retain the strategic benefit of ALG vacations, Apple vacations, because it is an important distribution channel to continue to have in the vertical integration of services that we offer. We never believed it was necessary to own a 100% of it in order to be able to retain that. In the same way that UBC, we found a solution in which we continue to manage it for the benefit of the of the hotels, but we don’t own a 100% of it. The first the first rule is it has to be good for shareholders.

Like, we have to do something that would be accretive to shareholders. The second rule is never ever ever forget the first rule. Mhmm. So we’re not gonna do a stupid deal to try to contort ourselves to, you know, change the way in which it’s it shows up. The opportunities are very interesting because we are the biggest in North America.

There are other opportunities. There are other travel platforms globally, which could create some interesting opportunities and benefits. So that’s that’s one possible avenue. A financial partner is another possible avenue or and a financial partner could come in many different forms and formats. So I would say we are very open to exploring these things, and we have.

We haven’t found we haven’t come across one that was super compelling to us yet, but I have every confidence that we will continue to explore that, not just because we understand that it’s from an accounting and a and a composition perspective a distraction, but also because of the point that I made that you made, which is, you know, you don’t need to own a 100% of it in order to get the strategic benefit out of it as long as the thing that you do with it or the partner you bring in can add value to the platform, make it stronger. What we don’t wanna do is weaken the platform or or or diminish its impact, which which does have strategic value within Hyatt. So that’s really the long answer to your short question, but that’s that’s the direction.

Unidentified speaker, Interviewer: And maybe let’s kinda take the whole thing out now. I mean, all of this comes back to your journey to asset light.

Mark Hoplamazian, President and CEO, Hyatt Hotels: Yeah.

Unidentified speaker, Interviewer: It’s something that was, you know, sort of the the key theme of, you know, your Analyst Day. I think your corporate strategy over the last, you know, any number of years and frankly, you know, even on this journey as long as I’ve been working with Hire, you know, fifteen years. It’s pretty amazing. So, you know, give us kind of the update on that medium term milestone. What does it take for us to get to you know, can we get to 90%?

What does it take us to get to the 90%? What’s our updated timeline with the real estate with the Playa Real Estate sale behind us?

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: We I don’t know if we’ve given numbers for yeah. ’27 for 90% asset light, and that was, you know, that was disclosed as part of the real estate sale for Playa. Our expectations that we would as Mark said, we would absolutely get it done in the next couple of years, and now we’ve accelerated that. So we’ve got a number of assets that are in different stages of disposition for us, LOI, or conversations in market. So we’re still very active on that front.

And and, you know, we’ve always said nothing is precious in our real estate portfolio. So we will continue to evaluate transacting on the real estate portfolio, but doing that where we are evaluating each property type and actually selling it to strength. You know, every single asset that we have sold in the time that you have been covering us, Sean, we have sold with a managed or franchise contract. You know, these are high quality assets. They are high performing.

And so when we think about the disposition strategy, we will make sure that we’re preserving those that distribution. So that’s that’s we we have taken some time to do this, but we have realized great value for shareholders. I’ll just remind you that we’ve sold 5,600,000,000.0 we realized 5,600,000,000.0 in proceeds and have done that at a multiple in excess of 15 times. So, you know, you do the math on the the value of that.

Mark Hoplamazian, President and CEO, Hyatt Hotels: I would just say two two punctuation points. First, there is zero chance that we will not get to 90 plus percent fee based earnings by 2027. None. There’s no chance we won’t. Second, you can think about this as a glide path.

This is not a once we get to nine 90%, we’re just gonna, you know, sit back and kick our feet up and have a year. Accomplished. Right. This is a glide path towards being much more deliberate about whittling down that real estate portfolio even further. I don’t think we’ll ever get to zero.

I think you will find us episodically going and buying assets, but it will always be with an an eye towards recycling. You’re gonna be able to to resell those assets in the future. I just don’t wanna pretend that we’re not gonna use our balance sheet in the future because that’s not realistic. There’s no competitor in in in our industry that’s not used their balance sheet. And so we will, but it won’t be it won’t be a material piece of our earnings base.

Alright. I’m gonna come back to

Unidentified speaker, Interviewer: that in minute, but I did wanna, you know, comment that I I did lose a bet to Adam on a big chunk of your 5,600,000,000.0 on the underwriting of Orlando. So I owe you a glass of tequila from Mexico on that. So Wow.

Mark Hoplamazian, President and CEO, Hyatt Hotels: I didn’t know you scored a glass of tequila. Good job, Adam.

Unidentified speaker, Interviewer: Yeah. Bottle won’t pass the won’t won’t pass the test that we’re allowed to do.

Mark Hoplamazian, President and CEO, Hyatt Hotels: Make sure he buys it on high at a high hotel. Yep.

Unidentified speaker, Interviewer: For sure. Yeah. So kind of last area, you know, Joan, and I’m sure you get this one in just about every meeting, but I’m gonna go down Yes. Okay.

So lightning round credit card. What can you share at this point? Again, these are important negotiations. Just help us put a few parameters around this because we we know these co brand cards become increasingly important value streams for, you know, for you on on this side, but also for your World of Hyatt members.

Joan Bottarini, Chief Financial Officer, Hyatt Hotels: Yeah. I you know, the the the program has grown exceptionally since 2021 when the last time we, you know, sort of re upped the original agreement that was signed in 2017. And, you know, we’re in a position now that we believe is a very strong one given our customer base and, the attractiveness of our network to cardholders. And so that’s Hyatt cardholders and others that are, using their points to stay in our hotels. So, you know, I think that, that strength is something that, you know, we are considering as we are entering into these negotiations, and we will be able to update you by the end of this year, early next year at the latest.

Unidentified speaker, Interviewer: And just remind us your your current co brand partner on the card is on the banking relation. Chase. Chase. Okay. Thank you very much, Joan, Mark.

Thank you, appreciate your time and thank you for for coming and joining us.

Mark Hoplamazian, President and CEO, Hyatt Hotels: Thank you.

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