beat earnings expectations but missed top-line estimates for the second quarter.
Despite the partial miss, the key metric of revenue per available room, or revPAR, surged nearly 10% in the second quarter.
"Industry fundamentals continue to strengthen and demand is getting better every day," Hudson Securities analyst Robert A. LaFleur told
. "Hyatt is at the point where in many markets and in many of their properties they are able to raise rates, which they haven't been able to do in a long time."
Hyatt raised room rates by 0.8% last quarter, with a 5.7% increase at its hotels outside North America.
RevPAR grew 9.6% year-over-year, including an increase of 6.8% at North American properties and 21.4% at international locations. Occupancy rose to 74.5%.
LaFleur explained that the typical recovery cycle in the hotel industry begins with a return in demand. Higher demand then re-inflates occupancy rates to a point where hoteliers can comfortably raise rates. That provides a compounding effect to revPAR recovery, or what LaFleur calls "the double whammy" of increasing occupancy and room rates.
"Despite concerns in the broader market about economic recovery, its sustainability and the possibility of a double dip, we're not seeing evidence in hotels that the recovery is running out of gas," he said. "In many ways it's accelerating."
Hyatt enjoyed strong occupancy gains in the recent quarter, but not much in the way of pricing power until the latter part of the quarter. But the hotelier's pricing power is continuing to improve and LaFleur expects average daily room rates to start increasing in a meaningful way going forward.
The Chicago-based company posted net earnings of $25 million, or 14 cents per share, compared with year-earlier losses of $50 million, or 34 cents per share. Analysts expected earnings of just $13.5 million, or 8 cents per share.
Hyatt's quarterly revenues grew 5% to $889 million, but missed expectations for sales of $901 million.
Hyatt's performance differed from that of fellow big-name hoteliers such as
Starwood Hotels & Resorts
, lodging real estate investment trust
Host Hotels & Resorts
, all three of which recently beat Wall Street's quarterly expectations and raised their earnings outlooks.
Shares of Hyatt traded down 1.5% in afternoon trading Thursday on lighter-than-normal volume.
-- Reported by Miriam Marcus Reimer from New York.
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