NEW YORK, NY--Standard & Poor's Ratings Services has placed its 'BBB+' corporate credit rating on Global Hyatt Corp. on CreditWatch with negative implications.(Grand Hyatt Cairo, Egypt, top right photo)
"The CreditWatch listing reflects a worsening expectation in 2009 for revenue per available room in the U.S. at a time when Global Hyatt's leverage profile is weak for the 'BBB+' rating," said Standard & Poor's credit analyst Emile Courtney.
"The CreditWatch listing reflects a worsening expectation in 2009 for revenue per available room in the U.S. at a time when Global Hyatt's leverage profile is weak for the 'BBB+' rating," said Standard & Poor's credit analyst Emile Courtney.
"Although the company does not publicly disclose its financial statements, we expect that year-over-year comparable EBITDA is likely to deteriorate at a pace that is in line with other lodging companies with a similar exposure to owned hotels and to the upscale and luxury lodging segments."
With business and leisure travel demand worsening and prospects for a long and moderate U.S. recession, we now expect that revenue per available room (RevPAR) in the U.S. in 2009 could decline in the mid-to-high single digits range, compared with our previous expectation for a decline of 5% or more. (Cosmopolitan Resort & Casino, Las Vegas, NV, middle left photo)
Given current underperformance industry-wide in upscale and luxury price segments in the U.S., RevPAR for Hyatt's predominantly U.S.-based upscale and luxury portfolio could decline at a high-single-digits pace in 2009.
We stated in June 2008, when we revised the company's outlook to negative, that Global Hyatt may pursue a more aggressive financial policy of using debt to finance its strategic growth initiatives, and that this could result in downward ratings pressure if the U.S. lodging industry weakened further.
We stated in June 2008, when we revised the company's outlook to negative, that Global Hyatt may pursue a more aggressive financial policy of using debt to finance its strategic growth initiatives, and that this could result in downward ratings pressure if the U.S. lodging industry weakened further.
In resolving the CreditWatch listing, we will consider our outlook for the U.S. lodging industry and Hyatt's portfolio, as well as intermediate term expectations regarding management's growth strategies
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(Hyatt Montreal, Canada, bottom right photo)
Media Contact:
Mimi Barker, New York (1) 212.438.5054, mimi_barker@standardandpoors.com
Analyst Contacts:
Emile Courtney, CFA, New York (1) 212-438-7824
Liz Fairbanks, New York (1) 212-438-7459
(Hyatt Montreal, Canada, bottom right photo)
Media Contact:
Mimi Barker, New York (1) 212.438.5054, mimi_barker@standardandpoors.com
Analyst Contacts:
Emile Courtney, CFA, New York (1) 212-438-7824
Liz Fairbanks, New York (1) 212-438-7459
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