WEBVTT - Hyatt Hotels CEO Mark Hoplamazian Talks 2025 Profit Growth

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Turning to the travel industry, Hiatt reinstating it's full year

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<v Speaker 2>guidance after its second quarter earnings beat estimates. Bloomberg standy

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<v Speaker 2>Berger joins US now with a special guest standing Lisa,

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<v Speaker 2>Thank you so much. It is such an important earning

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<v Speaker 2>season for just that understanding the consumer and their sensitivity

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<v Speaker 2>to this economy. I'm pleased to say joining us now

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<v Speaker 2>is someone who understands the consumer very well. It is

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<v Speaker 2>Mark Hopomajian, the CEO and president of Hyatt. Mark, thank

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<v Speaker 2>you so much for joining this morning. You're out with

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<v Speaker 2>earnings moments ago. Earlier this year you had to cut

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<v Speaker 2>earnings because of your outlook on some of the weaker

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<v Speaker 2>reservation trends going forward. You've mostly held on to that look.

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<v Speaker 2>So what if anything has changed for the consumer and

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<v Speaker 2>the demand you're seeing?

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<v Speaker 1>Well, Danny, first of all, thanks for having me. You know,

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<v Speaker 1>the first point that I have to make is that

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<v Speaker 1>travel is extraordinarily resilient. It's become a necessity for both

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<v Speaker 1>leisure travelers and for business travelers. The second quarter was

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<v Speaker 1>a weaker quarter for business travel, but leisure held up really,

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<v Speaker 1>really strongly. And our US resorts were up mid single

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<v Speaker 1>digits for the first half of the year. Europe was

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<v Speaker 1>up almost seven percent in leisure, so leisure, especially the

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<v Speaker 1>luxury segment. In the luxury segments, which luxury has been

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<v Speaker 1>up about six or seven percent year to date as

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<v Speaker 1>well the higher end customer, which is that our core

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<v Speaker 1>customer base with seventy percent of our portfolio and luxury

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<v Speaker 1>and full service is alive and well. So I would

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<v Speaker 1>say a couple of things have happened right now. The

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<v Speaker 1>first is that our largest corporate customers have told us

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<v Speaker 1>they're not they're going to lean in and continue to travel,

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<v Speaker 1>and they're making more commitments, especially for customer facing events

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<v Speaker 1>and meetings. The second thing that happened is that we

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<v Speaker 1>saw bookings for twenty twenty six really improve for big

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<v Speaker 1>group meetings. And third, the Conference Board and the and

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<v Speaker 1>the Business Council released the CEO their CEO Sentiments surveyed

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<v Speaker 1>this morning and things have turned now. Tariffs and volatility

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<v Speaker 1>have declined to number three on the list from number one,

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<v Speaker 1>and their outlook with respect to potential recession has dropped dramatically.

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<v Speaker 1>So I think the attitude and mindset for a lot

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<v Speaker 1>of CEOs is shifting mark.

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<v Speaker 2>That's very fascinating because the tariff picture is still evolving

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<v Speaker 2>as we go on. So are there any pockets where

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<v Speaker 2>you're still seeing those fears of economic anxiety or to

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<v Speaker 2>your point, is it now confidence restored?

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<v Speaker 1>No, we are, And in a word, it's China. The

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<v Speaker 1>caution and conservatism in China is clear, and a lot

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<v Speaker 1>of people are uncertain about what a so called tariff

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<v Speaker 1>war or the tariff picture might do to the economy. Overall,

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<v Speaker 1>there's an increasing I think body of thought that says

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<v Speaker 1>that Beijing pays a lot of attention to sentiment, and

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<v Speaker 1>the sentiment is definitely one of a very significant caution

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<v Speaker 1>right now. So I think there's an expectation that sometime

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<v Speaker 1>in the fall there may be policy shifts that alleviate

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<v Speaker 1>some of that and bring back a stimulus for growth.

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<v Speaker 2>So I would say you jump in because I wanted

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<v Speaker 2>to get to luxury, because you mentioned that this is

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<v Speaker 2>one of the strong suits and really resilient. Of course

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<v Speaker 2>you've doubled down on the luxury strategy too, but it

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<v Speaker 2>is a time where there is more competition and maybe

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<v Speaker 2>that aspirational traveler needs a little bit more convincing that

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<v Speaker 2>they should be paying up for the one thousand plus

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<v Speaker 2>a night type of all inclusive resorts. So what do

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<v Speaker 2>you need to do in terms of strategy to convince

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<v Speaker 2>them that paying up is worth it.

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<v Speaker 1>Well, our awn inclusive business is up six or seven

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<v Speaker 1>percent year to date, eight percent if you include Europe.

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<v Speaker 1>It's been wildly resilient. We are the leader in five

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<v Speaker 1>star luxury all inclusive resort where I think the certainty

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<v Speaker 1>of what your vacation will cost you and the experience

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<v Speaker 1>on property where our colleagues are not thinking about or

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<v Speaker 1>engaged in how much something costs, but rather full on

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<v Speaker 1>human to human service makes a difference to people. And

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<v Speaker 1>so the format has really really proven to be very,

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<v Speaker 1>very popular and will continue to do so. We just

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<v Speaker 1>closed on the acquisition of apply To Hotels and Resorts

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<v Speaker 1>twenty six hundred new hotel rooms in premier beachfront locations,

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<v Speaker 1>and we have a deal to sell all of real

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<v Speaker 1>estate so we will maintain our asset lite status. It's

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<v Speaker 1>a great deal and adds sixty five million dollars in

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<v Speaker 1>new fees to our run rates, so I think we're

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<v Speaker 1>quite pleased with that. So we're definitely doubling down on luxury,

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<v Speaker 1>and we're definitely doubling down on all inclusive well mark.

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<v Speaker 2>Just to that point, it's been a really hot summer,

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<v Speaker 2>a really hectic summer. I think a lot of people

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<v Speaker 2>are looking for inspiration of where to travel right now?

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<v Speaker 2>Where is the most demands? Where are you seeing most

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<v Speaker 2>people go to? What's in fashion right now?

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<v Speaker 1>Yeah? I would say the US traveler has headed to

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<v Speaker 1>Europe this summer. We thought we would see a massive

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<v Speaker 1>decline from last year, be given the Olympics and Taylor Swift,

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<v Speaker 1>but they're back in Europe and Europeans are staying in Europe.

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<v Speaker 1>But I would say the diversity of destinations has increased,

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<v Speaker 1>a lot of interest in Central and South America and

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<v Speaker 1>the Caribbean, and Mexico continues to be in great demand

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<v Speaker 1>both amongst Europeans, and the Canadian volume into our Mexican

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<v Speaker 1>and Caribbean resorts is significantly above last year. A lot

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<v Speaker 1>of people have talked about the flyover effect where Canadians

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<v Speaker 1>are heading over the US to get to Mexican and

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<v Speaker 1>Korean destinations, and we're seeing it significantly.

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<v Speaker 2>All right, So europe staying in Europe, Canadians skipping over

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<v Speaker 2>the US. Definitely a trend there. Mark, thank you so

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<v Speaker 2>much for joining us this morning. Mark Hoplomacian, the CEO

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<v Speaker 2>of Hyatt