Hyatt Hotels: Struggling Quarter, Unsatisfying Explanations, a report by UNITE HERE

UNITE HERE, the hospitality industry union, has released an analysis examining Hyatt’s poor Q1 2013 performance in connection to group business decline. The report, “Struggling Quarter, Unsatisfying Explanations,” looks at disappointing earnings by Hyatt Hotels Corporation (NYSE: H) compared to its peers and questions whether the company’s labor problems are contributing to its poor group results.

Group business accounts for approximately 45% of room revenue at Hyatt’s U.S. full-service managed properties and a meaningful amount of food and beverage revenue. The report analyzes the following points:

• Hyatt reported a 16% decrease in EPS, largely caused by a 5.8% decline in group room revenue at domestic, full-service hotels.
• Competitors (HOT, MAR, and HST) fared much better -- posting EPS increases of 21%, 42%, and 14%, respectively, despite the timing of Easter and the decline in government spending.
• Hyatt is the only hotel company with a long-running labor dispute and system-wide boycott by its largest union.
• Organizations ranging from The College Board to the Human Rights Campaign to Major League Baseball have shifted business from Hyatt hotels since the boycott was announced.

Hyatt’s lack of candor with investors and analysts is a noted concern following this quarter’s results. Hyatt has been communicating with employees, customers and prospective customers about the boycott. Yet, it has failed to address the impact of one of the most high profile labor disputes and boycotts in the country in its quarterly communications.

In July 2012, UNITE HERE announced a global boycott of Hyatt hotels. The boycott has been endorsed by many of the nation’s largest labor, civil rights, women’s and LGBT advocacy organizations. Over 200 Democratic elected leaders from 37 different states have signed the boycott pledge and the Governor of Massachusetts, Deval Patrick, has asked that no state business be conducted in Boston-area Hyatts.

UNITE HERE represents more than 250,000 workers throughout the U.S. and Canada in the hospitality, gaming, and food service industries.

http://www.hyatthurts.org/wp-content/uploads/Hyatt-Struggling-Quarter.pdf