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Hyatt Hotels Corp recorded a better-than-expected jump in quarterly revenue as growing confidence in the U.S. economy drew more business travelers and tourists to its hotels in the Americas.
Hyatt’s shares rose as much as 8 percent to a record high after the company said it charged higher room rates at most of its hotels in the fourth quarter, a trend that it expects to continue into 2014.
“We expect healthy occupancy levels in the United States to support increasing strength in room prices,” Chief Executive Mark Hoplamazian said in a statement on Friday.
The operator of the Park Hyatt, Andaz and Hyatt Regency hotel chains has been able to increase room rates in the United States as tourism picks up and businesses spend more on travel, in line with a recovering economy.
Hyatt’s limited exposure to the Asia-Pacific region, where room rates fell, also meant the company was less affected by a slowdown in the region that weighed on rival Starwood Hotels & Resorts Worldwide Inc’s earnings for the same period.
For hotels open at least one year, Hyatt reported a 4.2 percent rise in global revenue per available room (RevPAR) – a key metric of hotel health calculated by multiplying a hotel’s average daily room rate by its occupancy rate.
The increase was led by a 7 percent gain in U.S. full-service hotel RevPAR for hotels open at least one year.
U.S. business travel posted stronger-than-expected growth in 2013 and spending is expected to rise 6.6 percent to $289.8 billion in 2014, according to a report by the Global Business Travel Association, a trade group for business travel managers.
Hyatt, controlled by the billionaire Pritzker family, said its average daily room rate rose 4.7 percent for the fourth quarter at company-owned and leased hotels open at least one year.
The one black spot in its earnings was the Asia-Pacific region, where Hyatt reported a 1.3 percent fall in RevPAR from its full-service managed and franchised hotels.
While occupancy at its Asia-Pacific hotels increased 2.4 percent, the average daily room rate fell 4.7 percent.
An austerity drive by China’s government and protests in Thailand have hit tourism in the region. Starwood, which owns the Sheraton and Westin chains, on Thursday forecast first-quarter earnings below analysts’ estimates.
Hyatt, however, derives only 2 percent of its revenue from Asia-Pacific. In Thailand alone, the company had a market share of 0.4 percent in 2012 compared with 2.1 percent each for Starwood and Marriott, according to research firm Euromonitor.
Hyatt said revenue rose 9 percent to $1.09 billion for the quarter ended Dec. 31. Analysts on average expected revenue of $1.08 billion, according to Thomson Reuters I/B/E/S.
Excluding items, Hyatt earned $51 million, or 32 cents per share, well above the average analyst estimate of 20 cents.
Hyatt’s shares were up 5.6 percent at $52.15 in late morning trading on the New York Stock Exchange after earlier touching a lifetime high of $53.63.