Hyatt surges on 173% earnings beat, 2026 turnaround projected
Hotel operator projects $235M net income in 2026 after $52M loss, announces $375M capital returns
Hyatt Hotels Corporation shares rose sharply Thursday after the hotel operator reported fourth-quarter earnings that dramatically exceeded analyst expectations and provided an optimistic 2026 outlook projecting a return to profitability.
The Chicago-based company reported adjusted diluted earnings per share of $1.33 for the fourth quarter of 2025, crushing Wall Street estimates that had ranged between $0.34 and $0.50. The 173% beat over the midpoint of analyst projections came despite a reported net loss of $0.21 per share for the quarter, as adjusted net income reached $126 million.
"We are pleased with our strong fourth quarter and full year 2025 results, which reflect the ongoing recovery in travel demand and the strength of our luxury and resort portfolio," the company stated in its earnings release.
Revenue per available room (RevPAR), a key metric for hotel operators, grew 4.0% across comparable system-wide hotels during the fourth quarter compared with the same period in 2024. The performance was even stronger at Hyatt's all-inclusive resorts, where comparable Net Package RevPAR surged 8.3% in the quarter. For the full year 2025, all-inclusive resorts delivered 8.6% Net Package RevPAR growth, underscoring the company's strategic focus on the luxury segment.
The headline-grabbing element of Thursday's announcement was Hyatt's 2026 guidance, which projects a dramatic turnaround from the company's recent financial performance. Hyatt expects net income attributable to shareholders of $235 million to $320 million in 2026, a sharp reversal from the $52 million net loss reported for full year 2025.
The company also forecasts adjusted free cash flow of $580 million to $630 million for 2026, representing an increase of 22% to 33% from the $474 million generated in 2025. This improved cash flow generation is expected to support significant capital returns to shareholders.
Hyatt's board of directors declared a quarterly dividend of $0.15 per share for the first quarter of 2026, payable March 12 to shareholders of record as of March 2. The company also announced plans to return $325 million to $375 million to shareholders in 2026 through a combination of dividends and share repurchases. Hyatt ended 2025 with $678 million remaining in its share repurchase authorization after buying back $293 million of stock during the year.
Analysts have grown increasingly bullish on Hyatt's prospects, particularly as the company positions itself to benefit from major international events. Goldman Sachs initiated coverage in January with a buy rating and $198 price target, citing the potential boost from the 2026 FIFA World Cup. The firm estimates the tournament could drive an 80-90 basis point uplift to domestic RevPAR.
"We see a clear path to improved profitability driven by our asset-light transformation, growing fee-based revenue, and disciplined expense management," the company noted, highlighting six asset sales in the near term that will support capital returns. Hyatt is pursuing an aggressive expansion strategy, with plans to open more than 50 luxury and lifestyle hotels worldwide by 2026.
Hyatt's strategic shift toward an asset-light model continues to gain traction, with the company reporting 7.3% net rooms growth for full year 2025. This expansion, combined with improving operational metrics, has analysts maintaining an overall positive outlook. The stock currently trades around $168.63, with the average analyst price target at $175.91, suggesting potential upside of approximately 4% from current levels.
The company's 2026 outlook projects system-wide RevPAR growth of 1.0% to 3.0% and net rooms growth of 6.0% to 7.0%, reflecting continued expansion despite modest revenue growth expectations. Adjusted EBITDA is forecast between $1.155 billion and $1.205 billion for the year, essentially flat to slightly down from 2025 levels.
Hyatt's fourth-quarter results and optimistic 2026 guidance suggest the hotel operator has successfully navigated the post-pandemic travel recovery and is well-positioned for sustainable growth. The company's focus on luxury properties, all-inclusive resorts, and international expansion appears to be resonating with travelers, while its disciplined capital allocation strategy should support continued shareholder returns.