v3.24.3
SEGMENT INFORMATION
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
Our reportable segments are components of the business which are managed discretely and for which discrete financial information is reviewed regularly by the CODM to assess performance and make decisions regarding the allocation of resources. Our CODM is our President and Chief Executive Officer. We define our reportable segments as follows:
•Management and franchising—This segment derives its earnings primarily from the provision of management, franchising, and hotel services, or the licensing of our intellectual property to, (i) our property portfolio, (ii) our co-branded credit card programs, and (iii) other hospitality-related businesses, including the Unlimited Vacation Club following the UVC Transaction. This segment also includes revenues for reimbursed costs primarily related to payroll at managed properties where we are the employer, as well as costs associated with system-wide services and the loyalty program operated on behalf of owners of managed and franchised properties. The intersegment revenues relate to management fees earned from our owned and leased hotels and commission fees earned from certain ALG Vacations bookings, both of which are eliminated in consolidation.
•Owned and leased—This segment derives its earnings from owned and leased hotel properties located predominantly in the United States but also in certain international locations, and for purposes of segment Adjusted EBITDA, includes our pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA, based on our ownership percentage of each venture. Adjusted EBITDA includes intercompany management fee expenses paid to our management and franchising segment, which are eliminated in consolidation. Intersegment revenues relate to promotional award redemptions earned by our owned and leased hotels related to our co-branded credit card programs and are eliminated in consolidation.
•Distribution—This segment derives its earnings from distribution and destination management services offered through ALG Vacations and the boutique and luxury global travel platform offered through Mr & Mrs Smith. Prior to the UVC Transaction, this segment also included earnings from a paid membership program offering benefits exclusively at certain all-inclusive resorts in Mexico, the Caribbean, and Central America. Adjusted EBITDA includes intercompany commission fee expenses paid to our management and franchising segment, which are eliminated in consolidation.
Within overhead, we include unallocated corporate expenses.
During the nine months ended September 30, 2024, we revised our definition of Adjusted EBITDA to exclude transaction and integration costs (see Note 1), and we recast prior-period results to provide comparability. The revised definition excludes transaction costs previously recognized in general and administrative expenses and integration costs. Previously, only transaction costs recognized in gains (losses) on sales of real estate and other and other income (loss), net were excluded from Adjusted EBITDA. As these costs may vary in frequency or magnitude, we believe the revised definition presents a more representative measure of our core operations, assists in the comparability of results, and provides information consistent with how our management evaluates operating performance.
Our CODM evaluates performance based on gross fee revenues; owned and leased revenues; distribution revenues; other revenues; and Adjusted EBITDA. Our CODM does not evaluate our operating segments using discrete asset information. Adjusted EBITDA, as we define it, is a non-GAAP measure. We define Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus our pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA based on our ownership percentage of each owned and leased venture, adjusted to exclude interest expense; benefit (provision) for income taxes; depreciation and amortization; amortization of management and hotel services agreement and franchise agreement assets and performance cure payments, which constitute payments to customers ("Contra revenue"); revenues for reimbursed costs; reimbursed costs that we intend to recover over the long term; transaction and integration costs; equity earnings (losses) from unconsolidated hospitality ventures; stock-based compensation expense; gains (losses) on sales of real estate and other; asset impairments; and other income (loss), net.
Summarized consolidated financial information by segment was as follows:
Three Months Ended September 30, 2024
Management and franchisingOwned and leasedDistributionOverheadEliminationsTotal
Base management fees$105 $— $— $— $(8)$97 
Incentive management fees53 — — — (1)52 
Franchise and other fees121 — — — (2)119 
Gross fees279 — — — (11)268 
Contra revenue(27)— — — — (27)
Net fees252 — — — (11)241 
Rooms and packages— 201 — — (3)198 
Food and beverage— 58 — — — 58 
Other — 31 — — — 31 
Owned and leased— 290 — — (3)287 
Distribution— — 221 — — 221 
Other revenues12 — — — 1 13 
Revenues for reimbursed costs867 — — — — 867 
Total revenues$1,131 $290 $221 $— $(13)$1,629 
Intersegment revenues (1)$10 $3 $— $— $— $13 
Adjusted EBITDA$210 $63 $38 $(36)$— $275 
Depreciation and amortization$19 $37 $17 $8 $— $81 
(1) Intersegment revenues are included in gross fee revenues, owned and leased revenues, and other revenues and eliminated in Eliminations.
Nine Months Ended September 30, 2024
Management and franchisingOwned and leasedDistributionOverheadEliminationsTotal
Base management fees$321 $— $— $— $(26)$295 
Incentive management fees178 — — — (8)170 
Franchise and other fees345 — — — (5)340 
Gross fees844 — — — (39)805 
Contra revenue(56)— — — — (56)
Net fees788 — — — (39)749 
Rooms and packages— 598 — — (17)581 
Food and beverage— 222 — — — 222 
Other — 107 — — — 107 
Owned and leased— 927 — — (17)910 
Distribution— — 818 — — 818 
Other revenues31 — 26 — 1 58 
Revenues for reimbursed costs2,511 — — — — 2,511 
Total revenues$3,330 $927 $844 $— $(55)$5,046 
Intersegment revenues (2)$38 $17 $— $— $— $55 
Adjusted EBITDA$635 $204 $120 $(119)$1 $841 
Depreciation and amortization$57 $121 $56 $23 $— $257 
(2) Intersegment revenues are included in gross fee revenues, owned and leased revenues, and other revenues and eliminated in Eliminations.
Three Months Ended September 30, 2023
Management and franchisingOwned and leasedDistributionOverheadEliminationsTotal
Base management fees$104 $— $— $— $(10)$94 
Incentive management fees54 — — — (3)51 
Franchise and other fees100 — — — (2)98 
Gross fees258 — — — (15)243 
Contra revenue(12)— — — — (12)
Net fees246 — — — (15)231 
Rooms and packages— 225 — — (8)217 
Food and beverage— 73 — — — 73 
Other— 39 — — — 39 
Owned and leased— 337 — — (8)329 
Distribution— — 229 — — 229 
Other revenues28 — 50 — 1 79 
Revenues for reimbursed costs754 — — — — 754 
Total revenues$1,028 $337 $279 $— $(22)$1,622 
Intersegment revenues (3)$14 $8 $— $— $— $22 
Adjusted EBITDA$192 $72 $31 $(42)$— $253 
Depreciation and amortization$19 $45 $29 $7 $— $100 
(3) Intersegment revenues are included in gross fee revenues, owned and leased revenues, and other revenues and eliminated in Eliminations.
Nine Months Ended September 30, 2023
Management and franchisingOwned and leasedDistributionOverheadEliminationsTotal
Base management fees$310 $— $— $— $(29)$281 
Incentive management fees179 — — — (12)167 
Franchise and other fees278 — — — (6)272 
Gross fees767 — — — (47)720 
Contra revenue(34)— — — — (34)
Net fees733 — — — (47)686 
Rooms and packages— 647 — — (23)624 
Food and beverage— 242 — — — 242 
Other— 118 — — — 118 
Owned and leased— 1,007 — — (23)984 
Distribution— — 832 — — 832 
Other revenues103 — 134 — 1 238 
Revenues for reimbursed costs2,267 — — — — 2,267 
Total revenues$3,103 $1,007 $966 $— $(69)$5,007 
Intersegment revenues (4)$46 $23 $— $— $— $69 
Adjusted EBITDA$577 $230 $123 $(125)$1 $806 
Depreciation and amortization$58 $136 $84 $19 $— $297 
(4) Intersegment revenues are included in gross fee revenues, owned and leased revenues, and other revenues and eliminated in Eliminations.
The table below provides a reconciliation of net income attributable to Hyatt Hotels Corporation to consolidated Adjusted EBITDA:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net income attributable to Hyatt Hotels Corporation$471 $68 $1,352 $194 
Interest expense50 41 128 105 
Provision for income taxes137 33 259 107 
Depreciation and amortization81 100 257 297 
Contra revenue27 12 56 34 
Revenues for reimbursed costs(867)(754)(2,511)(2,267)
Reimbursed costs881 764 2,570 2,302 
Transaction and integration costs8 8 26 31 
Equity (earnings) losses from unconsolidated hospitality ventures13 (7)(32)(4)
Stock-based compensation expense (Note 15) (1)
9 12 55 60 
(Gains) losses on sales of real estate and other
(514)(18)(1,267)(18)
Asset impairments35 6 52 13 
Other (income) loss, net
(70)(26)(152)(93)
Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA14 14 48 45 
Adjusted EBITDA$275 $253 $841 $806 
(1) Includes amounts recognized in general and administrative expenses and distribution expenses.