CHICAGO-- Hotel occupancy rates are finally stabilizing, a soon-to-be public Hyatt Hotels Corp. told potential investors Monday, offering more welcome signs to an industry that's been battered by the recession.
The hotel company, which is privately held mainly by the founding Pritzker family and which observers expect will launch its initial public offering this week, said it believes the trend to continue for the remainder of the year.
"However, we expect that there will likely be continued pressure on average room rates," the Chicago company wrote in a document filed Monday with the Securities and Exchange Commission. "The current economic environment makes it difficult for us to predict future demand for our hospitality products and services."
Hotels have been hammered in the recession as corporations cut back on business travel and leisure travelers opt to stay at home.
Late last month, competitor Starwood Hotels & Resorts Worldwide Inc., which owns Sheraton hotels, said its third-quarter profit sank 64 percent. But executives there also said occupancy rates were starting to recover.
Hyatt said its revenue per available room — an important hotel industry performance measure — sank 22 percent for the first nine months of the year. That's slightly better than the 24 percent decline recorded for the first half of the year.
Meanwhile, Hyatt said its overall revenue fell 17 percent to $2.44 billion for the nine months that ended Sept. 30. Its nine-month loss was $31 million, compared with a profit of $310 million last year.
Hyatt could raise as much as $1.14 billion when it issues at least 38 million shares — priced between $23 and $26 each. It hasn't given a date, but observers widely expect the offering to be held this week.
Most of the shares on offer are being sold by current stockholders including the Pritzkers, heirs of the company's founder, who will retain about three-quarters of outstanding shares and as much as 97 percent of the voting power.
An additional 5.7 million shares will be available to underwriters to cover over-allotments.
Hyatt owns, operates, manages or franchises 415 Hyatt-branded properties, including the Hyatt, Park Hyatt, Hyatt Regency and Grand Hyatt chains, in 45 countries.
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