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Hyatt Hotels Corporation (NYSE:H) has updated its fiscal year 2024 forecast following the completion of the sale of the Hyatt Regency Orlando.
The hotel operator expects a system-wide RevPAR of 3.0 to 4.0 percent compared to the previous year. In addition, net room growth of 5.5 to 6.0 percent is expected. Adjusted EBITDA is expected is expected to be in the range of $1.10 billion to $1.14 billion. Capital expenditure of around $170 million is expected. Free cash flow of $390 million to $440 million is also expected.
In terms of capital allocation, Hyatt (H) expects to pay out capital gains of $1.25 billion to its shareholders in 2024.
Last week, Hyatt Hotels Corporation (H) announced that an affiliate completed the sale of the 1,641-room Hyatt Regency Orlando and adjacent 45 acres of land to affiliates of RIDA Development Corporation and an Ares Management Real Estate fund for approximately $1.07 billion, while retaining a long-term management agreement under the Hyatt Regency brand. In connection with the transaction, Hyatt (H) retained $265 million in non-controlling preferred equity and provided an additional $50 million in seller financing for the adjacent 45-acre property. The sale of the Hyatt Regency Orlando was described as part of Hyatt (H)’s capital allocation strategy to sell owned hotels and reinvest the proceeds in asset-light platforms that accelerate growth, and exceeds Hyatt’s (H) expanded $2 billion divestiture commitment announced in 2021. Over a three-year period, Hyatt has now generated $2.6 billion in gross revenues excluding acquisitions, a multiple of 13.3.
Shares of Hyatt Hotels (H) slightly 0.3% They rose in premarket trading on Monday and are up nearly 6% over the past week.
