Good morning. The summer travel season is upon us and many consumers want luxury resort stays.

Hyatt Hotels Corporation’s Fourth of July vacation bookings are up 25% year over year at resort properties in America. Despite inflationary pressures, consumers continue to prioritize leisure travel, while the higher-earning demographic continues to drive growth, Hyatt CFO Joan Bottarini said. About 50% of the company’s global revenue comes from leisure travel, 20% from business travel and about 30% from group travel, Bottarini said.

Hyatt’s goal is to attract high-income consumers with an emphasis on luxury. When the company started more than 60 years ago, it focused on large, luxury hotels for group meetings. But there has been a turning point in building a luxury resort and lifestyle portfolio. “We are smaller than our larger colleagues,” Bottarini said. “But we are powerful from a brand recognition perspective.”

The Chicago-based company’s global pipeline has grown nearly 85% since 2017, reaching 129,000 rooms, a record for the company. That’s the result of the “asset-light” business model that has been in place for the past seven years, she told me. This included selling hotel assets and reinvesting the proceeds in acquisition opportunities, whether those are mergers and acquisitions or portfolio deals focused on luxury. Hyatt aims to sell $2 billion in hotel assets by the end of the year.

The asset-light model is based on fee-based growth and additional contracts that increase distribution, Bottarini said. “Right now, as a company, we have much higher management fees and few assets, which translates into a lower capital intensity business model and higher operating leverage,” she explains.

Since putting the business model into practice in 2017, Hyatt has doubled the number of luxury rooms, tripled the number of resort rooms and fivefold the number of lifestyle rooms, according to the company. In the first quarter, Hyatt’s revenue per available room, a key industry performance indicator, rose 5.5% year over year, and its all-inclusive resorts rose 11%. For the quarter, the company reported net income of $522 million and adjusted EBITDA of $252 million.

Earn loyalty

Building customer loyalty is a big part of the hospitality industry. The 2024 “State of Loyalty: Hospitality Rewards” report from travel loyalty technology provider iSeatz found that 63% of U.S. consumers surveyed plan to take one to four more trips this year than in 2023. Hotel brands continue to strive According to the report, guests can gain more experience by offering more options on and off the property within their loyalty programs.

Hyatt’s loyalty program, World of Hyatt, has quadrupled membership since 2017 and is up 22% at the end of Q1 2024, compared to the same period last year, reaching 46 million members worldwide. For example, a program called Guest of Honor allows loyalty members to grant status to family members with qualifying points. Bottarini can grant her father her loyalty status at a Hyatt Place near her home when he visits, and she can use her points toward his stay, she explained.

World of Hyatt’s growth is partly due to a “network effect” among its guest base, Bottarini said. So it offers opportunities to connect with guests, listen to the wishes of the high-end customers and keep that in mind when creating new luxury resorts and lifestyle offerings. And the result: “They spend more, stay longer and tell us where they want to travel,” she said.

Bottarini, CFO at Hyatt since 2018, has been an executive at the company for more than two decades. By responding to a “very dynamic macro environment,” Hyatt has learned to take advantage of opportunities to grow and innovate its offerings, she said.

Sheryl Estrada
[email protected]

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Scoreboard

Sara Broeder was appointed CFO at OpenAI, the AI ​​research and implementation company announced on Monday. Friar most recently served as CEO of Nextdoor, and under her leadership it became a publicly traded company in 2021. She was previously CFO at Square, now known as Block Inc., and also worked at Goldman Sachs, McKinsey and Salesforce.

Friar wrote in a LinkedIn post on Monday: “As a mother of two, I am in awe of the world they are inheriting and also concerned about how quickly things are moving, with potentially very unequal outcomes. The bar is high for us and our work. I am eager to join the team, learn quickly and enthusiastically and work together to push the boundaries of what is possible.”

Gary W. Ferrera was appointed CFO of MoneyGram International, Inc., a global financial technology company, effective June 10. Ferrera succeeds Larry Angelilli, who recently announced his retirement. Ferrera has worked as a CFO for almost twenty years, mainly at listed companies. Most recently, he served as CFO of Driven Brands, the largest automotive service company in North America. Prior to that role, he was CFO of both Skillsoft and Cardtronics. “I look forward to working with the MoneyGram team as we continue to take bold, strategic action to achieve our goals,” Ferrera said in a statement.

Big deal

A new analysis from S&P Global Market Intelligence shows that the value of global private equity and venture capital deals rose 29.2% to $61.73 billion in May, compared to $47.56 billion in the same month in 2023. The study found also revealed that deal values ​​to date totaled $251.11 billion, up 17.9% year-on-year. However, the number of deals fell to 4,988 from 5,451 in May 2023, according to the report.

Courtesy of S&P Global Market Intelligence

Go deeper

“Apple’s big AI announcements were all about AI ‘for the rest of us’ – Google, Meta, Amazon and, yes, OpenAI should take note,” is a new Fortune piece by Sharon Goldman. Apple kicked off its Worldwide Developers Conference on Monday with expected AI announcements.

Goldman writes: “The laundry list of features that Apple executives promised to roll out to iPhone, iPad and Mac OS devices was long. Siri is getting an upgrade that makes the assistant “more natural, contextually relevant and personal.” If Siri can’t answer a question on its own, it will ask the user if it’s okay to use ChatGPT (thanks to a new deal between Apple and OpenAI) and will have an “on-screen awareness” that will ultimately allow Siri to be the more agent-like action on user content across apps.”

Heard

“This was a historic day for Apple and Cook & Co. did not disappoint in our opinion.”

—Dan Ives, managing partner of Wedbush Securities, wrote in a note to investors on Monday about the tech giant’s AI announcements.

“Apple is on the right path to deploy AI across its ecosystem while laying the foundation for the company’s multi-year AI strategy for the strongest installed base of 2.2 billion iOS devices in the coming years,” Ives said.