Good morning,
“The evidence we see is that corporations are prioritizing travel and getting their people back together. Culture is important,” Hyatt Hotels Corporation CFO Joan Bottarini told me.
Corporate travel demand is “very strong,” Bottarini says. “In the month of May, one of the statistics that we reported was that group bookings were up 46% for the rest of this year compared to May 2019,” she explains. “People are working remotely, and now that restrictions have been eased, it’s a priority to make sure people are gathering and building relationships in person, again.”
Return to travel for employees is “particularly led by consulting companies and technology companies as they return to the road,” Bottarini says. Some of Hyatt’s biggest corporate clients initially thought that post-pandemic travel for employees would be a fraction of what it was in previous years, Bottarini explains. “We’re actually seeing some of those companies return to pre-pandemic travel levels,” she says. “People’s assumptions are being challenged as they see other revenue-generating business professionals on the road.”
As group and business travel gained momentum, leisure transient revenue remained at record levels, up 18% in May compared to May of 2019, the company reported on Monday. It was bolstered by a strong performance over Memorial Day weekend, where revenue per available room (RevPAR) in the Americas was approximately 24% above Memorial Day weekend of 2019. And summer holiday booking levels are up 20-40% across Hyatt’s portfolio in the Americas compared to 2019. There’s a “robust summer travel season ahead,” according to Hyatt, which manages and franchises luxury and business hotels, resorts, and vacation properties across the globe.
But with inflation at a 40-year high and a possible recession looming, I asked Bottarini how Hyatt approaches cost savings.
“We’ve employed data and analytics at the property level, and one of the biggest costs that we have is labor.” The data helps answer the question: “How can we improve productivity?” she says.
“I’ll give you an example—the front desk,” Bottarini explains. “If you have somebody working from 8 a.m. to 4 p.m., but everybody is checking in from 1 to 6 p.m., the hours should perhaps be noon to 7 p.m., and have somebody on-site during those periods where there’s less demand.” Refining productivity on behalf of owners has also provided Hyatt employees flexibility in their schedules that they’ve wanted, she says.
“Not everyone can work the 8 a.m. to 4 p.m. traditional schedules,” she says. “As we’ve been listening to our colleagues about how we can improve their experience, [flexibility] is one of the top areas.”
Regarding hotel room prices, “cost structure is something, at the property level, that our general managers are extremely focused on,” Bottarini says. “They have the ability to price hotels daily. So they’re looking at the demand in the market and what they’re able to achieve to fill their inventory.”
I asked Bottarini what lessons were learned from past economic slowdowns. “Over the past two years, we’ve built what I would say is an incredible muscle for scenario planning to work out the different outcomes,” she explains. Making quick decisions about how to maximize profit became normalcy, she says. “Our teams on properties have greater autonomy to make decisions than they’ve had historically,” Bottarini says.
Bottarini has been an executive at Hyatt for 22 years, beginning her role as CFO in 2018. “I love the practice of finance,” she says. “I love numbers.” As CFO, I asked her what she notices when checking into a Hyatt. “I think about how we engage with people in our hotels, have genuine interaction, and really connect with guests,” Bottarini says.
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
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