Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Turning to the travel industry, Hiatt reinstating it's full year
Speaker 2: guidance after its second quarter earnings beat estimates. Bloomberg standy
Speaker 2: Berger joins US now with a special guest standing Lisa,
Speaker 2: Thank you so much. It is such an important earning
Speaker 2: season for just that understanding the consumer and their sensitivity
Speaker 2: to this economy. I'm pleased to say joining us now
Speaker 2: is someone who understands the consumer very well. It is
Speaker 2: Mark Hopomajian, the CEO and president of Hyatt. Mark, thank
Speaker 2: you so much for joining this morning. You're out with
Speaker 2: earnings moments ago. Earlier this year you had to cut
Speaker 2: earnings because of your outlook on some of the weaker
Speaker 2: reservation trends going forward. You've mostly held on to that look.
Speaker 2: So what if anything has changed for the consumer and
Speaker 2: the demand you're seeing?
Speaker 1: Well, Danny, first of all, thanks for having me. You know,
Speaker 1: the first point that I have to make is that
Speaker 1: travel is extraordinarily resilient. It's become a necessity for both
Speaker 1: leisure travelers and for business travelers. The second quarter was
Speaker 1: a weaker quarter for business travel, but leisure held up really,
Speaker 1: really strongly. And our US resorts were up mid single
Speaker 1: digits for the first half of the year. Europe was
Speaker 1: up almost seven percent in leisure, so leisure, especially the
Speaker 1: luxury segment. In the luxury segments, which luxury has been
Speaker 1: up about six or seven percent year to date as
Speaker 1: well the higher end customer, which is that our core
Speaker 1: customer base with seventy percent of our portfolio and luxury
Speaker 1: and full service is alive and well. So I would
Speaker 1: say a couple of things have happened right now. The
Speaker 1: first is that our largest corporate customers have told us
Speaker 1: they're not they're going to lean in and continue to travel,
Speaker 1: and they're making more commitments, especially for customer facing events
Speaker 1: and meetings. The second thing that happened is that we
Speaker 1: saw bookings for twenty twenty six really improve for big
Speaker 1: group meetings. And third, the Conference Board and the and
Speaker 1: the Business Council released the CEO their CEO Sentiments surveyed
Speaker 1: this morning and things have turned now. Tariffs and volatility
Speaker 1: have declined to number three on the list from number one,
Speaker 1: and their outlook with respect to potential recession has dropped dramatically.
Speaker 1: So I think the attitude and mindset for a lot
Speaker 1: of CEOs is shifting mark.
Speaker 2: That's very fascinating because the tariff picture is still evolving
Speaker 2: as we go on. So are there any pockets where
Speaker 2: you're still seeing those fears of economic anxiety or to
Speaker 2: your point, is it now confidence restored?
Speaker 1: No, we are, And in a word, it's China. The
Speaker 1: caution and conservatism in China is clear, and a lot
Speaker 1: of people are uncertain about what a so called tariff
Speaker 1: war or the tariff picture might do to the economy. Overall,
Speaker 1: there's an increasing I think body of thought that says
Speaker 1: that Beijing pays a lot of attention to sentiment, and
Speaker 1: the sentiment is definitely one of a very significant caution
Speaker 1: right now. So I think there's an expectation that sometime
Speaker 1: in the fall there may be policy shifts that alleviate
Speaker 1: some of that and bring back a stimulus for growth.
Speaker 2: So I would say you jump in because I wanted
Speaker 2: to get to luxury, because you mentioned that this is
Speaker 2: one of the strong suits and really resilient. Of course
Speaker 2: you've doubled down on the luxury strategy too, but it
Speaker 2: is a time where there is more competition and maybe
Speaker 2: that aspirational traveler needs a little bit more convincing that
Speaker 2: they should be paying up for the one thousand plus
Speaker 2: a night type of all inclusive resorts. So what do
Speaker 2: you need to do in terms of strategy to convince
Speaker 2: them that paying up is worth it.
Speaker 1: Well, our awn inclusive business is up six or seven
Speaker 1: percent year to date, eight percent if you include Europe.
Speaker 1: It's been wildly resilient. We are the leader in five
Speaker 1: star luxury all inclusive resort where I think the certainty
Speaker 1: of what your vacation will cost you and the experience
Speaker 1: on property where our colleagues are not thinking about or
Speaker 1: engaged in how much something costs, but rather full on
Speaker 1: human to human service makes a difference to people. And
Speaker 1: so the format has really really proven to be very,
Speaker 1: very popular and will continue to do so. We just
Speaker 1: closed on the acquisition of apply To Hotels and Resorts
Speaker 1: twenty six hundred new hotel rooms in premier beachfront locations,
Speaker 1: and we have a deal to sell all of real
Speaker 1: estate so we will maintain our asset lite status. It's
Speaker 1: a great deal and adds sixty five million dollars in
Speaker 1: new fees to our run rates, so I think we're
Speaker 1: quite pleased with that. So we're definitely doubling down on luxury,
Speaker 1: and we're definitely doubling down on all inclusive well mark.
Speaker 2: Just to that point, it's been a really hot summer,
Speaker 2: a really hectic summer. I think a lot of people
Speaker 2: are looking for inspiration of where to travel right now?
Speaker 2: Where is the most demands? Where are you seeing most
Speaker 2: people go to? What's in fashion right now?
Speaker 1: Yeah? I would say the US traveler has headed to
Speaker 1: Europe this summer. We thought we would see a massive
Speaker 1: decline from last year, be given the Olympics and Taylor Swift,
Speaker 1: but they're back in Europe and Europeans are staying in Europe.
Speaker 1: But I would say the diversity of destinations has increased,
Speaker 1: a lot of interest in Central and South America and
Speaker 1: the Caribbean, and Mexico continues to be in great demand
Speaker 1: both amongst Europeans, and the Canadian volume into our Mexican
Speaker 1: and Caribbean resorts is significantly above last year. A lot
Speaker 1: of people have talked about the flyover effect where Canadians
Speaker 1: are heading over the US to get to Mexican and
Speaker 1: Korean destinations, and we're seeing it significantly.
Speaker 2: All right, So europe staying in Europe, Canadians skipping over
Speaker 2: the US. Definitely a trend there. Mark, thank you so
Speaker 2: much for joining us this morning. Mark Hoplomacian, the CEO
Speaker 2: of Hyatt