Hyatt Hotels Corp

NYSE:H

Q1-2025 Earnings Call

[Operator]

Good morning, and welcome to the Hyatt First Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to Adam Rohman, Senior Vice President of Investor Relations and Global SG&A. Thank you. Please go ahead.

[Adam Rohman, executive]

Thank you, and welcome to Hyatt's First Quarter 2025 Earnings Conference Call. Joining me on today's call are Mark Hoplamazian, Hyatt's President and Chief Executive Officer; and Joan Bottarini, Hyatt's Chief Financial Officer.

Before we start the call, I would like to remind everyone that our comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K, quarterly reports on Form 10-Q and other SEC filings. These risks could cause our actual results to be materially different from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued today along with the comments on this call, are made only as of today and will not be updated as actual events unfold. In addition, you can find a reconciliation of non-GAAP financial measures referred to in today's remarks under the Financials section of our Investor Relations website and in this morning's earnings release.

An archive of this call will be available on our website for 90 days. Additionally, we posted an investor presentation containing supplemental information on our Investor Relations website this morning. Please note that unless otherwise stated, references to occupancy, average daily rate and RevPAR reflect comparable system-wide hotels on a constant currency basis. Percentage changes disclosed during the call are on a year-over-year basis, unless otherwise noted.

With that, I'll now turn the call over to Mark.

[Mark Hoplamazian, executive]

Thank you, Adam. Good morning, everyone, and thank you for joining us today. I'm very proud of our many accomplishments in the first quarter, including strong RevPAR and adjusted EBITDA growth, the introduction of the Hyatt Select brand and being selected to the 100 best companies to work for annual list of U.S. companies according to Fortune and Great Places To Work for the 12th consecutive year.

While we began to experience greater macro uncertainty during the first quarter, we delivered great results because of our durable asset-light business model and Hyatt's culture of care.

Before I comment on our results, I'd like to provide a brief update on the Playa transaction. On April 28, we extended the tender offer period until May 23, 2025, at which time we will evaluate if all closing conditions are met. We continue to advance discussions for the sale of Playa's real estate and expect to be in a position to enter into an agreement to sell the real estate in the near future. We will continue to provide updates on all aspects of the Playa transaction as we have additional information to share.

We're also making progress to sell several of our owned properties, including 1 that is under a signed PSA, 2 that are under a letter of intent and 3 hotels in a formal marketing process. We remain under contract for the sales of Hyatt Grand Central New York and Andaz's London Liverpool Street, but do not expect either of those transactions to close this year. We will continue to share additional updates as these transactions progress, and consistent with the past statements, expect that we will continue to reduce our ownership of hotels.

Turning to growth, we were very busy on the development front and ended the quarter with a pipeline of approximately 138,000 rooms, a 7% increase over last year. New signings replaced the rooms that opened during the quarter, and development interest in our brands remains very strong. We signed several exciting projects during the quarter, including the Park Hyatt Carmina in Italy, the Grand Hyatt [indiscernible] Hills in India and a Hyatt [indiscernible] in downtown Cincinnati to name a few. We are encouraged by the continued deal flow that we expect will translate to greater signings and expansion of our pipeline.

We achieved net rooms growth of 10.5% during the quarter. We welcomed the Venetian Resort Las Vegas in January, and we are thrilled for our World of Hyatt members and group customers to experience these hotels on the Las Vegas Strip. Other notable full service openings during the quarter included Andaz Doha and Hyatt Regency Bangkok airport. In February, we opened the first Hyatt Studios Hotel in Mobile, Alabama. Hyatt Studios Mobile Tilman's corner is off to an impressive start including strong bookings through high direct channels and great feedback from guests and developers. We are excited about the future growth by Studios and the momentum we are building to expand our brand presence in the upper mid-scale segment in the United States.

We expect to further accelerate our upper midscale segment growth in the United States with the introduction of our newest brand, Hyatt Select, an upper mid-scale transient conversion brand, which we announced earlier this year. The brand expands Hyatt's offerings to travelers seeking shorter stays in secondary and tertiary markets. The Hyatt Select brand is flexible for both new builds and conversions designed to deliver attractive returns for owners and offers an opportunity for us to expand our owner network.

As you will recall, during our 2023 Investor Day, we discussed the opportunity to grow our domestic brand footprint, especially in suburban, interstate and small metro markets, and we believe Hyatt Select, along with Hyatt Studios are the perfect brands for growth in these markets. There's strong interest in the Hyatt Select brand from owners who are looking for conversion opportunities and access the Hyatt powerful commercial platform, especially in markets where Hyatt has significant white space for growth. We are very excited about the potential of this brand and the opportunity to provide more options for our members and guests in new markets.

Now turning to operating results. This morning, we reported system-wide RevPAR growth of 5.7% for the quarter, which was positively impacted by the shift of Easter from the first quarter in 2024 to the second quarter in 2025. RevPAR growth was strongest among our luxury brands, in line with the trends that we have seen over the last 2 years as high-end consumers continue to prioritize travel. Leisure transient RevPAR was flat to last year, reflecting the shift of Easter and increased approximately 4% across our luxury brands. We also saw solid results across our all-inclusive resorts in the Americas as net package RevPAR was up over 4%, compared to the first quarter of 2024. Business transient RevPAR grew 12% in the quarter, driven by our large corporate customers and group RevPAR increased 9% in the quarter as the timing of Easter positively impacted both customer segments.

Our strong brand portfolio and growth into new markets and customer segments is clearly resonating with guests driving the success of our award-winning World of Hyatt loyalty program. We added over 2 million members during the first quarter, ending the quarter with approximately 56 million members, a 22% increase over the first year. Loyalty room night penetration grew 170 basis points compared to last year as our members realize the benefits of our program, deepening their engagement with Hyatt and contribute to greater direct bookings. We also continue to see strong co-brand credit card spend, which increased significantly compared to last year.

As we look forward, we are seeing mixed indicators as it relates to future booking activity. Based on what is currently on the books and recent booking trends, we expect RevPAR growth in our international markets to outperform the United States. We're also seeing positive bookings for our own inclusive portfolio, where pace is up approximately 7% in the second quarter for the Americas.

In the United States, group pace for full-service managed properties is up approximately 3%, compared to 2024 for the last 3 quarters of the year. We expect group to positively contribute to RevPAR growth in the U.S. for the remainder of the year, but we do anticipate growth in the second quarter to be softer due to the timing of Easter. As we look further out, group production for 2026 and beyond increased by double digits in the quarter, driven by corporate bookings and pace in 2026 is up over 10%.

We are seeing softer booking trends for near-term leisure and business transient bookings in the United States, which have been down in the high single digits versus last year over the last few weeks with the greatest impact in our upscale brands. Our larger corporate customers are still on the road traveling for business. And while transient remains short term, we believe that if visibility to macroeconomic policy improves, bookings could accelerate from what we have seen over the past few weeks. These trends informed our decision to adjust our full year outlook, which Joan will review in a few minutes. But before I turn the call over to Joan, I want to highlight the benefits of our asset-light business model in the face of macroeconomic uncertainty.

Through our asset-light transformation, we have grown our room base significantly and now have over 80% of asset-light earnings compared to approximately 40% at the time of our IPO in 2009. During the 2008 financial crisis, a 1% drop in RevPAR led to a nearly 2.5% drop in adjusted EBITDA due to our higher mix of owned and leased earnings. Today, as we benefit from a greater asset-light earnings mix, we anticipate a 1% change in RevPAR would be to an approximate 1.4% change in adjusted EBITDA using the midpoint of our earnings model, which can be referenced on Page 14 of our supplemental investor deck. This sensitivity illustrates the positive benefits of our asset-light model, which is more durable and predictable through economic cycles.

We have consistently invested in growth as a key part of our capital allocation strategy, which has enabled us to realize the benefits of scale. We believe our broader distribution across luxury, lifestyle, all inclusive and more recently upper mid-scale segments positions us to meet our guests and customers in more places and engage them more frequently. As a result, our expanded reach and growing membership base have contributed to a pipeline that is now 5x larger than it was in 2008, fueling the potential for continued fee growth well into the future. We've sharpened our customer focus, reinforced our financial foundation and significantly enhanced our organizational agility, enabling us to respond more swiftly and effectively as market dynamics evolve.

Our teams closest to the customer are making more data informed decisions, leveraging new tools that deliver tailored insights resulting in quick, high-quality decision-making. We remain committed to investing in talent, systems and processes that strengthen our agility and ensure we continue delivering exceptional value to all stakeholders regardless of the macroeconomic backdrop.

I would like to close by expressing my gratitude to all Hyatt colleagues who live our purpose every day by caring for each of our stakeholders, especially in uncertain times. Joan will now provide more details on our operating results. Joan, over to you.

[Joan Bottarini, executive]

Thanks, Mark, and good morning, everyone. As we shared during our last earnings call, we expected first quarter RevPAR growth to exceed the high end of our full year range, and we were pleased with our exceptionally strong 5.7% RevPAR growth. As Mark mentioned, business transient and group travel meaningfully contributed to RevPAR growth and the highest end chain scales outperformed with our luxury brand categories up over 8%, leading to over 2 percentage points of RevPAR index gains.

In the United States, RevPAR increased 5.4%. The shift of Easter and the presidential inauguration in Washington, D.C. positively impacted growth by approximately 150 basis points and group and business transient segments each delivered double-digit growth in the quarter.

RevPAR in the Americas, excluding the United States, increased 2.3% and net package RevPAR for our all-inclusive properties in the Americas increased 4.1%.

In Greater China, RevPAR was flat to last year as we lapped the strongest quarter of growth in 2024, but we increased our market share by approximately 1%. International inbound travel from the broader Asia Pacific region increased 14% compared to last year. Asia Pacific, excluding Greater China, had another great quarter, with RevPAR up 11.2%. And RevPAR in Japan, India, Australia and South Korea were up a combined 14%. International inbound continues to be an important driver of results in the region. RevPAR in Europe grew by 8.5%, compared to the same period last year. Leisure travel in the region grew by 8% from growth in both rate and demand.

We reported gross fees in the quarter of $307 million, up 16.9%. Our record level of fees was driven by strong RevPAR performance, new hotel openings, and growth in non-RevPAR fees. Owned & Lease segment adjusted EBITDA increased by 18% when adjusted for the net impact of asset sales. Distribution segment adjusted EBITDA improved by 9.6% when excluding the impact of the UVC transaction. Performance in the quarter was driven by higher pricing, effective cost management and favorable FX. In total, adjusted EBITDA was $273 million in the first quarter, an increase of approximately 24% after adjusting for assets sold in 2024.

In the first quarter, we repurchased approximately $149 million of Class A common stock and have approximately $822 million remaining under our share repurchase authorization. During the quarter, we issued $1 billion of senior notes. And on April 11, we closed on a $1.7 billion delayed draw term loan. We intend to use the net proceeds from our senior notes offering and the future proceeds to be drawn from the new term loan to finance the Playa acquisitions. We remain committed to our investment grade profile. And as we've previously disclosed, we plan to use proceeds from the asset sales to pay down this incremental debt.

As of March 31, 2025, our balance sheet remains strong with total liquidity of approximately $3.3 billion including approximately $1.5 billion in capacity on our revolving credit facility and approximately $1.8 billion of cash and cash equivalents and short-term investments. Again, $1 billion of our cash on hand is expected to fund a portion of the Playa acquisition.

I'll now cover our full year outlook for 2025 with the full details to be found on Page 3 of our earnings release. As a reminder, our outlook does not include acquisition or disposition activity beyond what we have completed as of today. We continue to monitor the dynamic macroeconomic environment, and while we had a very strong first quarter the trends that Mark mentioned have led us to adjust our RevPAR expectations for the remainder of this year. We have seen signs of slowing customer booking behavior, particularly in short-term leisure and business transient demand. At this time, we anticipate RevPAR growth to moderate in the balance of the year. Our full year 2025 RevPAR range of 1% to 3% and implies RevPAR growth for the balance of the year of between flat to up 2%. For the United States, after a strong first quarter with RevPAR up over 5% to last year, we expect RevPAR for the balance of the year to be around flat compared to last year.

For Greater China, visibility remains limited, but as we lap easier comparisons to last year, we believe RevPAR could be flat to slightly up for the balance of the year. We anticipate our properties in Asia Pacific, excluding Greater China, will have the strongest growth in RevPAR of any geographic region as they continue to benefit from significant international inbound travel.

We are maintaining our net rooms growth outlook range of 6% to 7%, driven by organic growth. Gross fees are expected to be in the range of $1.185 billion to $1.215 billion, a 9% increase at the midpoint of our range compared to last year. Adjusted EBITDA is expected to be in the range of $1.08 billion to $1.135 billion, a 9% increase at the midpoint of our range compared to last year when adjusting for the impact of asset sales. As a reminder, owned assets sold in 2024 accounted for $80 million worth of owned and leased segment adjusted EBITDA last year.

Adjusted free cash flow is expected to be in the range of $450 million to $500 million, which excludes $117 million of deferred cash taxes, expected to be paid in 2025 related to asset sales that took place in 2024 as well as approximately $43 million of costs related to the planned acquisition of Playa.

Our capital allocation strategy remains consistent. We are committed to our investment-grade rating, identifying opportunities to invest in growth that create value for our shareholders, paying a quarterly dividend and returning excess cash in the form of share repurchases. We expect to return additional capital to shareholders in 2025 beyond quarterly dividends and our year-to-date share repurchases.

In closing, we're proud of our first quarter results, which highlight the strength of our asset-light business model. We believe our commercial and growth strategy, the quality of our brand portfolio and operational agility position us well to navigate this dynamic environment, and we remain committed to delivering against our long-term financial and strategic objectives.

And this concludes our prepared remarks, and we're now happy to take your questions.

[Operator]

[Operator Instructions] Our first question comes from Shaun Kelley from Bank of America.

[Shaun Kelley, analyst]

Mark or Joan, just wondering if you could give us a little update on sort of how you expect some of your line items or business units to perform in, let's call it, this choppier macro environment. Specifically, a little color on your expectations around distribution, given I think you called out some slower bookings. And then own and lease and incentive management fees as these are tough for a lot of people to model and understand the kind of sensitivity points given when RevPAR especially gets down to around the 0 level, which I think you're implying for the balance of the year?

[Mark Hoplamazian, executive]

Thanks, Shaun. It's Mark. I'll start and on sort of a macro commentary and then I think Joan can cover the specifics on the O&L and distribution that you asked. So generally speaking, I think, look, it's obviously a choppy environment. Having said that, the first quarter was solid really across the board. And we are seeing strength in the very near term. The pace as we get into the end of April into May is coming off a bit in terms of leisure and that is looking forward, except for our all-inclusive business, which remains very solid. So our own inclusive business in terms of pace in the second quarter is up 7%. If you look at the actualized revenues in April for our all-inclusive business, it's up 9%. Of course, that includes Easter effects, but 7% of that 9% growth was ADR.

And Q3 pace at this point is flat. Q2 has 88% of the business book and Q3 has got 45% of the business books. So the leisure picture is much weaker in the U.S. resorts than it is in the non-U.S. Americas. We have seen increases in Canadian travelers into Mexico and the Caribbean. And -- but overall, that segment is actually holding up very nicely on the leisure front.

On business transient and group on business transient, first of all, very, very strong first quarter, up [ 12%], and as we look into the current outlook, the -- it really is a tale of sort of 3 segments. Luxury is very strong as far into the future, which is really through the end of May, as we can see. Upper upscale is also positive through the end of May. Now these are not huge percentages of the total volume. These are all of our negotiated accounts but very, very positive. The place where it's negative is in upscale, it's select service. And so BT is coming off in select service overall.

Our negotiated accounts -- our biggest accounts, I should say, are actually positive in select service, but the overall business transient pace is definitely off on the select service side. And then on group, we're up for the remainder of the year, just under 3%, somewhere in the 2.5% to 3% range. That will -- if that holds, which right now, we don't have any reason to believe it won't, will yield a total year of up about 4.5% to 5%, closer to -- right in the middle of that actually. And I think that that's actually a very good result for the year. What's most encouraging is with about 50% of the business on the books for 2026 we're seeing an over 10% pace increase, including really healthy rate increases.

So I would say, as we sit here right now, the near term is definitely disrupted. It's very important to recognize that 70% of our portfolio is luxury and upper upscale. And so as we look at how this is unfolding the tracking by segment and price point has actually become really important to understanding the total story.

So that's kind of the macro picture at this point. I would say there are risks, of course, the GDP figures that just came out are not encouraging. I don't -- it doesn't necessarily feel like we're on the precipice of some massive contraction, but I'm not an economist because if I were, I'd have like 5 opinions about that same topic. So I'll spare you my speculations. But then I think Joan can talk about the other 2 pieces of your question.

[Joan Bottarini, executive]

Sure, Shaun. I'll just comment on the owned segment and distribution. So owned is a smaller portfolio now, less than 20% of our earnings mix. And there's a higher concentration to luxury. So the performance that we're seeing in those chain scales is obviously helping the portfolio in the quarter. And also because of the shift in Easter, New York had a really good quarter, and we have a couple of owned hotels there. As we look forward, this portfolio, we expect to be -- to continue to be strong. We have a concentration in the U.S. So we're watching that closely as far as the short-term pickup. We have a Q3 difficult comp because of the European hotels and what we generated last year in Paris with the Olympics.

But all in all, on balance, the owned portfolio is performing strongly and margins are up in the quarter, up over last year, 70 basis points, which is really a result of our teams in the field and our asset management teams really pushing on productivity and costs that we can't control.

[Mark Hoplamazian, executive]

And Joan, I would just add that, that strength that you just described continued through April.

[Joan Bottarini, executive]

That's right. We had actually very good April. Part of that was actually driven by New York too continuing to be strong on the business side. For distribution, we had a good quarter in the first quarter, and it was a little bit better than expectations, actually. As our teams are being very, very disciplined about cost efficiencies. They're seeing -- they are seeing some slowdown in booking activity at the lower chain scales, not into some of the 5-star locations in Mexico and the Caribbean, but in lower chain scales. So they're working hard to make sure that we're very disciplined about the cost structure and driving pricing in those upper chain scales that they're delivering to. So that really helped results in the quarter, and we had a little boost from FX to -- in that segment.

As we look towards the remainder of the year, again, we think we're watching the bookings closely. We do think that the $5 million to $10 million upside to last year will probably be closer to around flat, which means a slight pullback in the last 3 quarters of the year relative to the first quarter, but nothing material. And again, the teams have some levers at their disposal as they manage through the business into the coming weeks where -- that's where visibility is. It's really in the next couple of weeks.

[Operator]

Our next question comes from Michael Bellisario from Baird.

[Michael Bellisario, analyst]

Just want to dig in a little bit more on the booking trends. Are you seeing cancellations? Or is it all just less bookings at this point? And then on group what markets, what customer types are you seeing the hesitancy from and that 3% pace for the remainder of the year. Where was that 90 days ago?

[Mark Hoplamazian, executive]

Yes. I think -- well, first of all, I guess, while government only represents a couple of percent of our total group business, there were significant cancellations in government. So a small percentage of our total, but significant cancellations. This is a year that so far has been dominated by corporate. Corporate is up in all respects and especially in bookings into the future, association is actually off. So we've seen really, really strong pace development from corporate.

In terms of sectors, the key sectors that really drive our business, both on the business transient and the group side, that is [indiscernible], consulting and banking and finance on the -- this is on the BT side, the business transient side are up. They're all up double digits in Q1. And so those are the key sectors that are firing on all cylinders at this point.

So I would say the key differentiation that we're seeing at this moment is association pullback versus corporate lean forward.

[Joan Bottarini, executive]

Yes. I would just add -- sorry, I would just add too, when we look globally, really the international markets are stronger, notably stronger when we look at the transient pacing both on the business transient and the leisure transient side. So it's -- there really is -- the U.S. is a little bit slower than in the last couple of weeks than international. So when you look on a global basis, actually, business is up and leisure on a global basis is slightly down, but that, again, is driven by the 2 different, very different dynamics we're seeing international versus U.S.

[Operator]

Our next question comes from Ben Chaiken from Mizuho.

[Benjamin Chaiken, analyst]

[ I would love ] to give more color on the progress around Playa. Language in the release seems to suggest a little faster time line than what's indicated the last time we spoke when I think you're referencing 2027. Not sure if that read is fair. And then any color on the number of potential buyers would be great?

[Mark Hoplamazian, executive]

Yes, I think, as I mentioned, we expect to be in a position to be able to sign a deal with respect to asset dispositions, and really beyond that, it's a bit difficult to say further by virtue of some uncertainties on timing and so forth. By way of reminder, we established the end of '27 in relation to a total sell-down commitment of $2 billion in the aggregate. That wasn't just -- it was unspecific as to whether it was going to be acquired Playa assets or existing owned assets in our portfolio. So that was the reference to 2027.

We have a very long history of establishing goals and providing some guidance on our activities on the portfolio side that we absolutely feel certain that we can accomplish. We have actually beaten every single goal that we've ever set both in terms of time, in terms of dollars and in terms of valuation. So that is a -- that's a track record that we are extremely proud of and intend to maintain.

[Operator]

Our next question comes from Richard Clarke from Bernstein.

[Richard Clarke, analyst]

So just a question on the construction landscape, what level of cost inflation are your developers seeing? And is that having any impact on maybe your U.S. construction. And any update on the percentage of your pipeline that is under construction that was I think, 25% the last quarter?

[Mark Hoplamazian, executive]

Thank you, Richard. A couple of things. First, I had the great pleasure to be at the grand opening of the first Hyatt studios that opened in Mobile, Alabama. And during that time, I spent all of my time talking to the other developers, the developer of that hotel and other developers that came, there are quite a few of them. Many of them were involved in the creation of the brand to begin with. And to a person, they said that they are putting contingencies in their cost estimations right now that range as high as 20% in terms of cost to build. However, the retiring part of that conversation was that at least 2 different developers talked about having stood up -- well, in 1 case, they themselves stood up and in another case, they have identified case good manufacturers in the United States that they are now working with on an accelerated basis to limit any impact of tariffs with respect to imported case goods.

A lot of the other materials, as you can imagine, building materials don't ship well in terms of cost, given the weight meaning drywall, lumber, steel, et cetera, and certainly, ready-mix concrete is a hyperlocal business. Those are all not affected by -- these are all factor -- building cost factors that are not impacted by tariffs at all.

So I'm actually -- I was really taken by the ingenuity and the creativity of the group that I talked to. And I think we're going to see more and more of that, that is discovering and standing up onshore providers of case goods, which historically has been almost entirely coming out of China carpeting, and other hardware is largely sourced from U.S. manufacturers against -- again, I think a lot of that has to do with -- it has to do with shipping costs and so forth. So I'm not saying it's not going to -- we're going to escape by and not have any impact from tariffs whatsoever. I am saying that necessity is the mother of invention, and our developers are really showing some great ingenuity in how they're approaching this.

And by the way, with respect to the proportion of the pipeline that's under construction, it's actually about 30% on '25. And secondly, the pipeline activity in the first quarter is very vibrant. We opened over 4,000 rooms out of the pipeline in the first quarter, and we added a bit more than that in the quarter. And I think you know this well, Richard, because you've been a student of the industry for a long time, but the first quarter is notoriously a slow quarter for signings. So we're quite happy with that, and we're especially happy to see the activity that's underway in the sort of feeder system into the deals that we're currently negotiating, which we have confidence we're going to end up signing.

So I would say the activity on the pipeline front feels better to me than it did a year ago. And I think our performance year-to-date is actually quite strong.

[Operator]

Our next question comes from Patrick Scholes from Truist Securities.

[Charles Scholes, analyst]

A quick question for you on the Playa transaction. What, if anything, at this point would make you not go forward with this deal?

[Mark Hoplamazian, executive]

Well, we have a committed transaction and we're in the middle of a tender offer. There are conditions to the completion of the tender offer. I'm not going to enumerate all of them, and this is not by any means an exhaustive list, but a few really important ones. First, getting to an 80% tendered percentage, that is 80% of the shares tendering. Second would be clearance of all antitrust clearances that are required. And third, we don't get to 100% in the tender, then there's a process that you go through that's prescribed that will take some number of weeks to complete in order to acquire the remaining shares. So those are the key conditions. And so I hope that helps to sort of outline what's ahead of us.

[Charles Scholes, analyst]

Can I have a follow-up. How confident at this juncture do you feel about those key conditions being met or satisfied?

[Mark Hoplamazian, executive]

We're confident that we'll get through this. I think the antitrust -- predictions on antitrust, if you look backwards over the last 4 to 8 years have -- this is not U.S., by the way, it's primarily Mexico that we're talking about have been maybe a little less predictable than they seem to be now. But -- so with respect to the tender and so forth, I really don't think that's going to end up being a constraint. I think we're just in a waiting pattern right now for clearance from -- on antitrust. I think that's the one that we're focused on. Yes, but I think we will get to the tender level that we have as a minimum requirement.

[Operator]

Our next question comes from Chad Beynon from Macquarie.

[Chad Beynon, analyst]

With respect to the 2025 outlook, has anything changed with the non-hotel-related fees, and with any softness that you've seen recently in the leisure traveler does that usually correlate with kind of what you see in that line?

[Joan Bottarini, executive]

No, Chad, on the non-hotel-related fees, in the first quarter, we had a very strong result, up significantly in our franchise and other fees. Some of that was boosted by the UVC transaction, so which closed in last year in the middle of the quarter. So that did help us in the first quarter, but we're anticipating healthy growth in both franchise and other non-RevPAR related fees for the rest of the year.

And then I don't know if this is behind your question, but maybe just a little bit of color. As we think about the other fee streams, incentive management fees, again, strong in the quarter across all actually dimensions of our fee growth. One thing that is important is the health of the U.S. market and the China market, which we've described China being flat in the quarter. And we anticipate as we look through the rest of the year that, that could improve based on what we're seeing. In fact, April was a little bit better in China. And then in -- for the U.S., the same comment I would make is that the short-term bookings being a little bit softer, we -- what we see evolves in the environment, we could see some pickup because the bookings are short term right now. And again, April was positive in the U.S.

So it's a matter of watching this really closely and making sure that our teams are going to market where the demand is coming, and that's what we're focused on in light of some booking activity that's a little bit softer than we would have anticipated a couple of months ago. And that should help us sustain these fee growth numbers through the rest of the year. We've got a -- we posted 17% growth in the first quarter, and we anticipate the full year at the midpoint will be 9%. So still strong growth for the remaining 3 quarters of the year.

[Operator]

Our next question comes from Stephen Grambling from Morgan Stanley.

[Stephen Grambling, analyst]

I think last quarter, we talked about this a little bit. But as we think about your co-brand credit card, is there a path to this being potentially renegotiated early as some of your peers have? And any reason to believe that your terms would be different than some of those recent renewals?

[Joan Bottarini, executive]

So Stephen, we don't have an update today to share, and we will absolutely provide an update when we have more information. We do believe we're going to achieve a very competitive new deal because of our brand portfolio, our distribution, the growth, the options we provide. So serving the high-end traveler helps us in this regard. And of course, the performance of the World of Hyatt program is also a key contributor to why we think we'll have a successful deal when we get to be able to share the negotiation specifics with you.

[Stephen Grambling, analyst]

Great. And then I think that you touched on this with Chad's question, but have you seen any big deviation in the spend on your existing co-brand credit card, whether it's shifting more towards goods versus services that may mirror some of what you're seeing on the other side on the -- from a RevPAR standpoint?

[Joan Bottarini, executive]

No, really strong results that we've been -- we've seen personally and what we've heard from our issuers. So nothing that is concerning at all or materially different than that strong result.

[Operator]

Our next question comes from Duane Pfennigwerth from Evercore ISI.

[Duane Pfennigwerth, analyst]

On the favorable all-inclusive pacing, you briefly mentioned or alluded to Canadians over flying the U.S. I wondered if you had any stats on how the point-of-sale might be changing for all inclusive, is U.S. point-of-sale stable? Or are you seeing other geographies meaningfully perk up?

[Mark Hoplamazian, executive]

The -- I think the answer is yes, that in this case. I think we're seeing an increase in Canadian flow and consistency from Americans. The percentage increase from Canada was high in the first quarter in terms of actual stays. But the U.S. is the dominant peer market. So I would say that a lot -- a big proportion of the total performance for state business in the first quarter and the pacing is coming from the U.S. I would describe the move up significant percentage increase of Canadians is a bit of a cascade out of some U.S. resorts. But I found this maybe most acute actually in a non all-inclusive resorts that we have in the Bahamas, where in the first quarter, they experienced very significant increase in Canadian travelers. And anecdotally, at least some of that had to do with, as you described it, a fly over.

So I think it's absolutely a current phenomenon, but -- and U.S. is positive. But the Canadian travelers are basically adding a boost to overall results in Q1 and in terms of the pace that we see in the next couple of months.

[Duane Pfennigwerth, analyst]

And then I just wonder, big picture. I know you have a longer-term goal, but how should we be thinking about dispositions this year, excluding potential Playa transaction?

[Mark Hoplamazian, executive]

Sure. I have to say, I think it's a little less predictable in terms of timing at this point. One of the things that has been a byproduct of policy decisions and policy volatility in fiscal matters is disruption in the fixed income markets. And that's -- you already understand that. And that does create disruptions. And I wouldn't go so far as to call it dislocation, just disruptions in capital formation and most importantly, not necessarily capital availability, but pricing. And so I feel like there's some measure of awareness and thinking about how best to finance property acquisitions at this point in time. Some of the properties that we have for sale are actually in Europe. So the capital formation there is a little more straightforward.

So we absolutely have an expectation that we will close on some of the things that we enumerated earlier. But timing-wise, it's right now as we sit here at this moment, not very predictable in terms of the actual effectuation of those.

[Operator]

Our next question comes from Smedes Rose from Citi.

[Bennett Rose, analyst]

I just wanted to follow up a little bit on that on the potential real estate dispositions, maybe you've obviously been through a lot of cycles. You know this space very well. You've been very successful at it. You mentioned sort of difficulties maybe around financing. And I'm just wondering, are you more inclined to offer seller financing in some circumstances? Have you gotten maybe pushback around pricing from potential buyers given increased uncertainty? Or are they kind of just looking through all of it? And any thoughts maybe just on more sort of institutional interest in the all-inclusive space, which I think you talked about a little bit on the last quarter, which we haven't seen so much of in terms of real estate ownership and just sort of any thoughts there?

[Mark Hoplamazian, executive]

Yes. So first of all, thanks, Smedes, I appreciate the question. The fact is that any time you effectuate a trade you are, by definition, locking in whatever is available at that moment at the pricing that's available at that moment. And there is a trade-off if like we do believe that there's great long-term value creation longer term -- medium to long-term value creation in the asset base. And so what you don't want to do is end up getting basically crystallizing a sale that is unduly, I would say, maybe in some cases, if it were to be unduly influenced by the cost of debt. So there are many ways to ameliorate that or mitigate it and one of which is to do what you asked about, which is seller financing.

So my inclination at this point in time is to evaluate exactly how the different sources of capital, whether they be banks or nonbank lenders are pricing risk seeing how we might step in on a highly asymmetric risk-reward basis to provide either credit support or other kind of seller financing that would allow for more efficient borrowing for buyers with great confidence that we've got great asset coverage and a very appropriate risk-weighted return. So that's how we're thinking about it, and we've been applying that sort of thinking for our entire [indiscernible] here, but it becomes even more relevant in today's world.

I would say that the valuation point goes to the quality of the assets. I think the key from my perspective is -- and we've said this for at least a decade now that the quality of the portfolio that we've got matters. The resiliency of the performance of our hotels matters. The current performance of our portfolio matters. And you heard Joan talk about how well our Owned & Lease portfolio is doing. And I can tell you -- what you can read through my own comments about our all-inclusive segment as an indication of performance in that segment. So really, let's not forget that, that valuation is and multiples actually have to be multiplied by earnings. And with sustained and improving earnings over time, valuations can and should be maintained and increase. So that's really -- this is all the balancing act. I mean I've covered the whole waterfront now, but that's the way in which we are engaged in all of this, whether that's all-inclusive assets that we will come into ownership of through Playa or our existing portfolio.

[Operator]

Our next question comes from Conor Cunningham from Melius Research.

[Conor Cunningham, analyst]

Sorry to get back to sort of the short-term question, but just -- I'm just trying to understand what's going on, on business transient and leisure in general. There's obviously a lot of noise from the calendar shifts and whatnot. But has demand stabilized in April? Like if you exclude all the calendar stuff, is it now stable from where it was before the uncertainty kind of [indiscernible] the market?

And then just -- as you think about international, you talked about it outperforming in the U.S. that all makes sense. But it seems like the entities are at much different spots. So if you could just talk about where you see the most upside and potential more muted outcomes that would be helpful.

[Joan Bottarini, executive]

So Conor, maybe I -- you touched on it, and it's actually a way that we're sitting here as we're processing the numbers, is that April was an unusual month because of the holiday, the Easter holiday and the holiday being later in the month, too. So you have -- you sort of have the spring break that existed for several weeks prior to the Easter holiday. We are looking at preliminary numbers for April, and they're positive. So while we've been seeing some bookings slowing, April still has positive results and very strong continued momentum outside of the U.S. in markets in Asia outside of Greater China, even though I also mentioned Greater China was positive in the month, and in our all inclusion business, you've heard the pace numbers, we were sharing at 7% in the Americas, the all-inclusive segment.

So that's where the mix comment comes. And so we're watching it closely. We will, I think, look at May and June as indicators of what you're suggesting with respect to a more "normalized" period in this uncertain environment where we can actually track what's landing because it is still short term.

I mean the one callout that is probably a bit more of a -- as we look at the chain scale because luxury has been outperforming and the upscale segment have been underperforming. They've been a bit weaker. So that's the area that I think we'll be watching that closely, in particular, in May and June when we have a little bit more of a clear calendar. And in a month, it should be healthy from a business perspective on a normalized basis. So that will give us -- and next quarter's call, we'll be able to give you a really good insight into those 2 months, May and June.

[Operator]

Our next question comes from Brandt Montour from Barclays.

[Brandt Montour, analyst]

I was curious if you could give us an update on the ground signing momentum in China. And specifically, Mark, I was hoping you could kind of talk a little bit about a bigger-picture question or idea that's been in the news a lot lately of America Inc. And if you're seeing any sort of hesitation from local developers in China in terms of signing on with an American brand?

[Mark Hoplamazian, executive]

Thanks for that, Brandt. The signing activity in China started off as we expected it would slow in the first quarter, that's not atypical. The continued activity in the upper mid-scale brand, UrCove by Hyatt has been very strong. The pipeline for those hotels, we have more than 70 hotels now. So altogether, that would put us close to 130 hotels under that brand. So the expansion of the pipeline even as we continue to open more and more of those hotels is very encouraging.

I think it's a format, and with our brand associated with it, a desirable alternative for business travelers who are definitely looking to stay in central locations. These are hotels that are largely developed from adaptive reuse of office buildings and residential buildings in very, very central locations, but at a lower price point. And so I would say it's been strongest among our -- across our portfolio. I think the pipeline under construction in China is lower than the overall 30% that I cited earlier. That still has to do with projects that during the hard shutdowns 2 years ago were either suspended or pushed. And so we're continuing to monitor that.

I think one thing that we have deliberately done to mitigate any concerns about the financial base behind the pipeline has been to work with state-owned enterprises and larger state-owned enterprises. And we have joint ventures with 2, we have actually 3 joint ventures in total, but 2 of them are with companies that are ultimately owned by the state. And so our progression with them in growing the portfolio has been very consistent, and I think is very reliable.

There have been news reports about Chinese consumers trading away from American products that is on the good -- consumer goods front. We don't see that same dynamic in our business.

[Operator]

Our last question today will come from Kevin Kopelman from [indiscernible].

[Unknown Analyst]

I just had just a follow-up on the RevPAR comments. First, could you clarify the 0% to 2% that you're thinking of for the rest of the year, is that also a good range for how you're thinking about the second quarter? And on all-inclusive, can you help us translate the pacing numbers that you gave for how you're thinking about net package RevPAR in Q2, understanding obviously that it all right now?

[Joan Bottarini, executive]

Sure, Kevin. The first question, and I'm going to ask you to repeat the second question around the second quarter. The answer is yes. We expect around to be in that same range between 0% to 2%. I told you the numbers for April that are preliminary. So we're tracking, I would say, to the higher end of the range in April, and that's boosted by leisure because of Easter in the month and also boosted by the international markets, Asia Pacific outside of Greater China and Europe in the month of April. So the answer is yes, and that's kind of a little bit of context of where we're tracking quarter-to-date.

[Unknown Analyst]

Great. And [indiscernible] yes, I'm not all inclusive. Just kind of the pacing -- you [indiscernible] the pacing data point, which looked really good. If you could just help translate that for us to how net package RevPAR might be looking for the second quarter compared to the first compared to the first?

[Joan Bottarini, executive]

Yes, you can expect a high single-digit pacing number is going to be about a mid-single-digit result on the net package RevPAR similar to the first quarter. And that is strong. And actually, on the books is healthy because we have a little bit more visibility into that business because it takes a little bit more time as travelers make the decisions about the second quarter. So we feel good about that result for all-inclusive in Q2.

[Mark Hoplamazian, executive]

Yes. I would say we feel really good about it in Q2 because 88% of the business is already booked. So there's not a lot much -- yes, there's not a lot of open to buy, so to speak or remaining revenue that we need to generate in order to meet those numbers.

Well, thanks, everybody. I appreciate all of you for taking your time this morning, and we appreciate your interest in Hyatt. We look forward to welcoming you into our hotels and resorts so that you can not only experience the power of the care of the Hyatt family, but also give our RevPAR boost, which we would greatly appreciate. So thanks, and we'll talk to you soon.

[Operator]

This concludes today's conference call. Thank you for participating, and have a wonderful day. You may all disconnect.