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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.05pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Real-time Form 4 intelligence. Smarter insider tracking.
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.08pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
unable+5
challenges+4
loss+3
incomplete+3
incidents+2
Positive rising
success+3
successful+2
successfully+1
favorable+1
assure+1
Risk Factors (Item 1A)
23,101 words
Item 1A. Risk Factors.
In addition to the other information set forth in this annual report, you should consider carefully the risks and uncertainties described below, which could materially adversely affect our business, financial condition, results of operations, and cash flows.
Risk Factors Summary
The following is a summary of the principal risks and uncertainties described in more detail in this annual report:
• Global economic conditions and the cyclical nature of the hospitality industry could adversely affect demand for travel and lodging, and hospitality-related businesses, and, as a result, our revenues, profitability, and future growth.
• Risks relating to natural or man-made disasters, weather and climate-related events, contagious diseases, terrorist activity, and war could reduce the demand for lodging and hospitality-related businesses, which may adversely affect our financial condition and results of operations.
• We operate in a highly competitive industry, and our revenues, profits, or market share could be harmed if we are unable to compete effectively.
• New distribution channels, including potential AI platforms, alternatives to traditional hotels, significant increases in the volume of sales made through third-party internet travel intermediaries, and industry consolidation among our competitors could have an impact on consumer loyalty to our brands and hospitality-related businesses and may impact our business.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
loss+7
closure+3
volatility+1
break+1
delayed+1
Positive rising
benefiting+3
profitability+2
effective+1
successfully+1
MD&A (Item 7)
14,924 words
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part IV, Item 15, "Exhibits and Financial Statement Schedule—Consolidated Financial Statements." For our discussion and analysis of our liquidity and capital resources for the year ended December 31, 2024, compared to the year ended December 31, 2023, see Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 202 4 Form 10-K . In addition to historical data, this discussion contains forward-looking statements about our business, operations, and financial performance based on current expectations that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those discussed in "Disclosure Regarding Forward-Looking Statements" and Part I, Item 1A, "Risk Factors" included elsewhere in this annual report.
Overview
At December 31, 2025, our hotel portfolio consisted of 1,528 properties (372,763 rooms), including:
• 682 managed properties (204,841 rooms), including 127 all-inclusive resorts (45,385 rooms), all of which we operate under management and hotel services agreements with third-party owners;
• 700 franchised properties (129,242 rooms);
• 28 owned and leased properties (9,190 rooms), including 17 hotels (6,060 rooms), 6 operating leased all-inclusive resorts (1,262 rooms), 4 operating leased hotels (1,697 rooms), and 1 finance leased hotel (171 rooms), all of which we manage;
• If we are unable to establish and maintain key distribution arrangements for our properties and hospitality-related businesses, the demand for our rooms, hospitality-related services, and revenues could decrease.
• Because we derive a portion of our revenues from operations outside the United States, we are subject to various risks of doing business internationally.
• If we are unable to successfully operate the World of Hyatt loyalty program or further evolve the development and implementation of our digital platforms, loyalty for our brands, and our revenues, could be negatively impacted.
• Adverseincidents at, or adverse publicity concerning, our hotels or businesses or our corporate responsibility efforts could harm our brands and reputation, as well as adversely affect our market share, business, financial condition, or results of operations.
• Labor shortages could restrict our ability to operate our properties or grow our business or result in increased labor costs that could reduce our profits.
• If we are unable to maintain good relationships with third-party owners and franchisees and/or if our management and hotel services agreements or franchise agreements terminate, our revenues could decrease and our costs could increase.
• Our growth strategy depends on attracting third-party owners and franchisees to our platform, and future arrangements with these third parties may be less favorable to us, depending on the terms offered by our competitors.
• Some of our existing development pipeline may not be developed into new hotels or may not open on the anticipated timeline, which could affect our growth prospects.
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• If we or our third-party owners or franchisees are not able to maintain our brand standards or develop, redevelop, or renovate properties successfully, our business, profitability, and ability to compete effectively could be harmed.
• We may be unable to sell selected owned properties at acceptable terms and conditions, if at all, and are exposed to risks resulting from investments in owned and leased real estate.
• We may seek to expand our business through acquisitions of and investments in other businesses and properties, or through alliances, and these activities may be unsuccessful, divert our management's attention, or take longer or be more difficult than anticipated to integrate, including with respect to the implementation of internal controls over financial reporting.
• If we or our third-party owners, franchisees, or development partners are unable to repay or refinance loans secured by mortgaged properties, access the capital necessary to fund current operations, or implement our plans for growth, our revenues, profits, and capital resources could be reduced and our business could be harmed.
• If we become liable for losses related to loans we have provided or guaranteed to third parties or contractual arrangements with third-party owners and franchisees, our profits could be reduced.
• Cyber risk and the failure to maintain the integrity of customer, colleague, or Company data could adversely affect our business, harm our reputation, and/or subject us to costs, fines, penalties, investigations, enforcement actions, or lawsuits.
• The success of our business depends on complex internal and third-party information technology, cloud, and AI systems, and any failures, security incidents, data issues, regulatory challenges, integration difficulties, or inability to effectively develop, govern, or access these technologies could disrupt operations, reduce revenues, and harm our reputation and competitiveness.
• We have a limited ability to manage third-party risks associated with our hospitality venture investments, which could reduce our revenues, increase our costs, lower our profits, and/or increase our liabilities.
• If we are unable to successfully manage the Unlimited Vacation Club paid membership program, our results of operations, including the collection of management and royalty fees related to the program, and cash flows could be negatively impacted.
• Our debt service obligations may adversely affect our cash flow and reduce our operational flexibility, and we are exposed to counterparty and credit risk and fluctuations in the market values of our investment portfolio.
• Our failure, or the failure by third-party owners, franchisees, or hospitality venture partners, to comply with applicable laws and regulations may increase our costs, reduce our profits, or limit our growth.
• Adverse judgments or settlements resulting from legal proceedings in which we may be involved could reduce our profits or limit our ability to operate our business.
• Changes in federal, state, local, or foreign tax law, interpretations of existing tax law, or agreements or disputes with tax authorities could affect our profitability and financial condition by increasing our tax costs.
• Any failure to protect our trademarks and intellectual property could reduce the value of our brand names and harm our business.
• There can be no assurance that we will declare or pay dividends in the future or that we will repurchase shares pursuant to our share repurchase program consistent with historical amounts or at all.
• Anti-takeover provisions in our organizational documents and Delaware law, as well as agreements with our major stockholders, may discourage or prevent a change of control transaction or any attempt by stockholders to replace or remove our board of directors or management.
• Pritzker family business interests have substantial control over us and have the ability to control the election of directors and other matters submitted to stockholders for approval.
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Risks Related to the Hospitality Industry
We are subject to macroeconomic and other factors beyond our control, as well as the business, financial, operating, and other risks of the hospitality industry, all of which may adversely affect our financial results and growth.
Macroeconomic and other factors beyond our control as well as the business, financial, operating, and other risks of the hospitality industry can adversely affect demand for hospitality products and services. These factors include:
• changes and volatility in general economic conditions, including as a result of rising interest rates, and the impact on consumer discretionary spending, including the severity and duration of any economic downturn in the U.S., Americas, Europe, Asia Pacific, or global economy and financial markets;
• war, political conditions or uncertainty, civil unrest, protests, terrorist activities or threats, and heightened travel security measures instituted in response to these events;
• climate change and resource scarcity, such as water and energy scarcity;
• natural or man-made disasters, weather and climate-related events, such as hurricanes, earthquakes, tsunamis, tornadoes, droughts, floods, wildfires, oil spills, and nuclear incidents;
• changes in the desirability of particular locations or travel patterns of customers;
• decreased corporate profits, which may negatively impact corporate budgets and spending allocated to group and individual business travel;
• decreased demand for business-related travel for in-person meetings due to technological advancements in, and consumer acceptance and adaptation to, virtual meetings and conferences and/or changes in guest and consumer preferences;
• global supply chain constraints and interruptions, rising costs of construction-related labor and materials, and increased costs due to inflation or other factors that may not be fully offset by increases in revenues in our business;
• low consumer confidence, high levels of unemployment, and depressed housing prices;
• the financial and general business condition of the airline, automotive, and other transportation-related industries and its impact on travel;
• decreased airline capacities or routes and increased travel costs;
• increasing awareness around sustainability, corporate responsibility, the impact of air travel on climate change and the impact of over-tourism;
• travel-related accidents;
• oil prices and travel costs;
• statements, actions, or interventions by governmental officials related to travel and corporate travel-related activities and the resulting negative public perception of such travel and activities;
• domestic and international political and geopolitical conditions, including changes in trade policy;
• changes in taxes and governmental regulations that influence or set wages, prices, interest rates, or construction and maintenance procedures and costs;
• the costs and administrative burdens associated with compliance with applicable laws and regulations;
• changes in operating costs, including, but not limited to, labor (including minimum wage increases), energy, food, workers' compensation, benefits and healthcare, insurance, and unanticipated costs resulting from force majeure events;
• the lack of availability, or increase in the cost, of capital for us or our existing and potential property owners;
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• the attractiveness of our properties and services to consumers and potential owners and competition from other hotels and alternative lodging marketplaces, including online accommodation search and/or reservation services, and hospitality-related businesses;
• cyclical over-building in the hotel, all-inclusive, and vacation ownership industries;
• organized labor activities, which could cause a diversion of business from hotels involved in labor negotiations and loss of group business for our hotels generally as a result of certain labor tactics; and
• global outbreaks of pandemics, epidemics, endemics, or contagious diseases or fear of such outbreaks.
These factors, and the reputational repercussions of these factors, can adversely affect, and from time to time have adversely affected, individual properties, particular regions, and our business as a whole. How we manage any one or more of these factors, or any crisis, could limit or reduce demand for the services we provide or the rates our portfolio of properties are able to charge for rooms or services, which could adversely affect our financial results and growth. These factors can also increase our costs or affect our ability to develop new properties or maintain and operate our existing portfolio of properties.
The hospitality industry is cyclical and adverse global economic conditions or low levels of economic growth could adversely affect our revenues and profitability as well as cause a decline in or limitation of our future growth.
Consumer demand for our products and services is closely linked to global and regional economic conditions and is sensitive to business and personal discretionary spending levels. Changes in consumer demand and general business cycles can subject, and have subjected, our revenues to significant volatility. Adverse general economic conditions, health and safety concerns, risks or restrictions affecting or reducing travel patterns, lower consumer confidence, high unemployment, adverse political conditions, among other factors, can result in a decline in consumer demand, which can lower the revenues and profitability of our owned and leased properties, decrease the amount of management, franchise, and license fee revenues we are able to generate from our managed and franchised properties, strategic alliances, and the Unlimited Vacation Club paid membership program, and decrease the demand for vacation packages sold through ALG Vacations. In addition, a portion of our expenses associated with managing, franchising, providing services to, licensing, owning, or leasing hotels as well as residential and vacation units are fixed. These costs include certain personnel costs, interest, rent, property taxes, insurance, and utilities, all of which may increase at a greater rate than our revenues and/or may not be able to be reduced at the same rate as declining revenues. Where cost-cutting efforts are insufficient to offset declines in revenues, we could experience a material decline in margins and reduced or negative cash flows. If we are unable to decrease costs significantly or rapidly when demand for our hotels and other properties decreases, the decline in our revenues could have a particularly adverse impact on our net cash flows and profits. Economic downturns generally affect the results derived from owned and leased properties more significantly than those derived from managed and franchised properties due to the proportion of fixed costs associated with operating an owned or leased property and the greater exposure owners have to the properties' performance.
Uncertainty regarding the future rate and pace of economic growth in different regions of the world makes it difficult to predict future profitability levels. Additionally, if economic weakness were to affect any particular regions of the world, it could have an adverse impact on our revenues and negatively affect our profitability.
In addition to general economic conditions, new hotel room supply is an important factor that can affect the hospitality industry's performance. Excessive growth in lodging supply could result in returns that are substantially below expectations or result in losses, which could materially and adversely affect our revenues, profitability, and future growth prospects.
Risks relating to natural or man-made disasters, weather and climate-related events, contagious diseases, terrorist activity, and war could reduce the demand for lodging and hospitality-related businesses, which may adversely affect our financial condition and results of operations .
Hurricanes, earthquakes, tsunamis, tornadoes, droughts, wildfires, and other man-made or natural disasters, as well as the spread or fear of the spread of contagious diseases in locations where we own, lease, manage, franchise, or provide services to significant properties and areas of the world from which we draw a large number of guests, could cause property damage or a decline in the level of business and leisure travel in certain regions or as a whole and reduce the demand for lodging, which may adversely affect our financial condition and operating performance. In addition, potential concerns about public health or contagious diseases may impact travel demand and consumer confidence in the future. Actual or threatened war, terrorist activity, political unrest, civil strife, and other geopolitical uncertainty could have a similar effect on our financial condition or our growth strategy. Any one or more of these events may reduce the overall demand for hotel rooms or limit the prices we can obtain for them, both of which could adversely affect our profits and financial results.
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We are also subject to the risks associated with the physical effects of climate change, including changes in sea levels, water shortages, storms, flooding, droughts, wildfires, extreme temperature events, and other natural disasters. Such disasters may become more frequent or intense as a result of climate change or other factors, which may also result in changes to the cost or availability of insurance. Climate change may also result in chronic physical effects, including rising sea levels and changes in temperature and precipitation patterns. These risks may also have impacts on our properties' access to, and costs with respect to, energy, and may impose additional requirements on our properties, including energy efficiency requirements. In addition, a variety of legislation and regulations are being enacted, or considered for enactment, relating to energy and climate change, such as carbon dioxide emissions control and building codes that impose energy efficiency standards. Moreover, as climate change concerns continue to grow, legislation and regulations of this nature are expected to continue and to make compliance more costly. As a result of the foregoing, we may experience increased costs or decreased availability of certain products important to our operations, including but not limited to, insurance, water, and energy.
Risks Related to Our Business
Competition Risks
Because we operate in a highly competitive industry, our revenues, profits, or market share could be harmed if we are unable to compete effectively, and new distribution channels, including potential AI platforms, alternatives to traditional hotels, and industry consolidation among our competitors may negatively impact our business.
The segments of the hospitality industry in which we operate are subject to intense competition. Our principal competitors are other operators of full service, select service, extended-stay, all-inclusive, and wellness properties, including other major hospitality chains with well-established and recognized brands, as well as cruise line operators. Some of these major hospitality chains are larger than we are based on the number of properties or rooms in their portfolios or based on the number of geographic locations in which they operate. Some of our competitors also have significantly more members participating in their loyalty programs which may enable them to attract more customers and more effectively retain such guests. Our competitors may also have greater financial and marketing resources than we do, which could allow them to improve their properties and expand and improve their marketing efforts in ways that could adversely affect our ability to compete for guests effectively. In addition to these competitors, we also compete against smaller hotel chains and independent and local hotel owners and operators.
We also face competition from new distribution channels in the travel industry, including potential AI platforms that could change the way that guests discover, search for, and book travel. Additional sources of competition include large companies that offer online travel services as part of their business model, such as Alibaba, financial services providers such as credit card issuers, search engines such as Google, and peer-to-peer inventory sources that allow travelers to book stays on websites that facilitate the short-term rental of homes and apartments from their owners, thereby providing an alternative to hotel rooms, such as Airbnb and Vrbo. Companies or websites that provide generative AI services and recommendations, including large language models ("LLMs") like ChatGPT, Claude, Gemini, Grok, and others, represent an additional source of competition because they may currently or in the future serve as alternative distribution channels.
The hospitality industry has experienced significant consolidation, and we expect this trend may continue as companies attempt to strengthen or hold their market positions in a highly competitive and evolving industry. Consolidation by our competitors would give them increased scale and may enhance their capacity, abilities, and resources and lower their cost structure, causing us to be at a competitive disadvantage. If we lose market share or are not able to successfully attract third-party owners and franchisees to our brands as a result of this consolidation, our results of operations, cash flow, business, and overall financial condition could be materially adversely affected.
Significant increases in the volume of sales made through third-party internet travel intermediaries could have an adverse impact on consumer loyalty to our brand and could negatively affect our revenues and profits.
We expect to continue to derive most of our business from our direct distribution channels, including our digital platforms. However, consumers worldwide routinely use internet travel intermediaries such as Expedia.com, Booking.com, and Trip.com, as well as lesser-known online travel service providers, to book travel. These intermediaries initially focused on leisure travel, but now also provide offerings for corporate travel and group meetings. Some of these intermediaries are attempting to increase the importance of generic quality indicators, such as "four-star downtown hotel," at the expense of brand identification. These intermediaries hope that consumers will eventually develop brand loyalties to their reservation systems rather than to our brands. Some of these intermediaries have launched their own loyalty programs to further develop loyalties to their reservation systems. The introduction of AI into these intermediaries' platforms may also accelerate their ability to deliver quicker and more personalized travel recommendations. In addition, these intermediaries typically obtain higher commissions or other potentially significant contract concessions, increasing the overall cost of these third-party distribution channels. If the volume of sales made through internet travel intermediaries continues to increase, consumers may develop stronger loyalties to
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these intermediaries rather than to our brands, our distribution costs could increase significantly, and our business revenues and profits could be harmed.
If we are unable to establish and maintain key distribution arrangements for our properties or hospitality-related businesses, the demand for our rooms, hospitality-related services, and revenues could decrease.
The rooms at hotels and resorts that we manage, franchise, provide services to, own, or lease may be booked through third-party internet travel intermediaries and online travel service providers. We also engage third-party intermediaries, including travel agencies and meeting and event management companies, who collect fees by charging our hotels and resorts a commission on room revenues. A failure by our distributors to attract or retain their customer bases could lower demand for hotel rooms and, in turn, reduce our revenues. In addition, some of our distribution agreements are non-exclusive, short term, terminable at will, or subject to early termination provisions. The loss of distributors, increased distribution costs, or the renewal of distribution agreements on less favorable terms could adversely impact our business.
In addition, the success of ALG Vacations is dependent on distribution arrangements with various third parties such as hotel companies, travel agencies, and tour operators who provide the various components of vacation packages offered to customers, and certain cooperative marketing agreements with governments in various jurisdictions to market a particular destination for travel. In addition, certain of our marketing and distribution agreements are generally terminable at will by either party with short notice periods. The loss of participation by third-party providers or the failure to maintain distribution arrangements or cooperative agreements on favorable terms could adversely impact these businesses.
We compete for guests, customers, management and hotel services agreements, franchise agreements, and residential and vacation units based on a variety of factors.
We compete for guests at hotels and resorts and for customers of our services as well as the Unlimited Vacation Club business that we manage based primarily on brand name recognition and reputation, location, customer satisfaction, room rates, quality of service, amenities, quality of accommodations, security, and the ability to earn and redeem loyalty program points.
We compete for management and hotel services agreements based primarily on the value and quality of our management and hotel services, brand name recognition and reputation, loyalty program penetration, the level of our management fees, room rate expectations, costs associated with system-wide services, the terms of our management and hotel services agreements, including compared to the terms our competitors offer, and the economic advantages to the property owner of retaining our management and hotel services and using our brand name. We compete for franchise agreements based primarily on brand name recognition and reputation, loyalty program penetration, the room rate that can be realized, costs associated with system-wide services, and the royalty fees charged. Other competitive factors for management and hotel services agreements and franchise agreements are relationships with property owners and investors, availability and affordability of financing, marketing support, loyalty programs, reservation and e-commerce system capacity and efficiency, distribution channels, limitations on the expansion of one or more of our brands in certain geographic areas due to restrictions previously agreed to in order to secure management and franchise opportunities, and the ability to provide capital that may be necessary to obtain management and hotel services agreements and franchise agreements.
The residential and vacation units which we manage, own, or to which we provide services or license our trademarks compete with other properties principally on the basis of location, quality of accommodations, price, financing terms, quality of service, terms of property use, opportunity to exchange for time at other vacation properties, as applicable, and brand name recognition and reputation. In addition, our residential units compete with peer-to-peer inventory sources that allow travelers to book stays on websites that facilitate the short-term rental of homes and apartments from owners, such as Airbnb, Vrbo, and Vacasa, and residential projects affiliated with branded hospitality companies. Our vacation ownership business also competes with national and independent vacation ownership club operators and owners reselling their interests in these properties, which could reduce demand or prices for new vacation units.
Operational Risks
The risks of doing business internationally, or in a particular country or region, could lower our revenues, increase our costs, reduce our profits, or disrupt our business.
Our operations outside the United States represented approximately 30% of our revenues for the year ended December 31, 2025. Our properties outside of the United States represented approximately 55% of the rooms in our system-wide inventory at December 31, 2025. Over the long term, we expect our international operations will continue to account for an increasing portion of our total revenues and rooms.
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As a result, we are subject to the risks of doing business outside the United States, including:
• the costs of complying with laws, regulations, and policies, including taxation policies, of foreign governments relating to investments and operations; the costs or desirability of complying with local practices and customs; and the impact of various anti-corruption and other laws affecting the activities of U.S. companies abroad;
• currency exchange rate fluctuations or currency restructurings;
• evolving local data residency requirements that require data to be stored only in and, in some cases, also to be accessed only from within a certain jurisdiction;
• U.S. taxation of income earned abroad;
• limitations on the redeployment of non-U.S. earnings;
• import and export licensing requirements and regulations, as well as unforeseen changes in regulatory requirements, including the imposition of tariffs or embargoes, export regulations, controls, and other trade restrictions;
• political and economic instability;
• health and safety protocols, including fire, life, and safety, at our portfolio of properties;
• the complexity of managing an organization doing business in many jurisdictions;
• uncertainties as to local laws and enforcement of contract and intellectual property rights and occasional requirements for onerous contract clauses; and
• rapid changes in government, economic, and political policies; political or civil unrest; acts of war or terrorism; or the threat of international boycotts or U.S. anti-boycott legislation.
While these factors and the impact of these factors are difficult to predict, any one or more of them could lower our revenues, affect our operations, increase our costs, reduce our profits, or disrupt our business.
In addition, conducting business in currencies other than U.S. dollars subjects us to fluctuations in currency exchange rates, currency devaluations, or restructurings that could have a negative impact on our financial results. Our exposure to foreign currency exchange rate fluctuations or currency restructurings is expected to continue to grow if the relative contribution of our operations outside the United States increases.
We occasionally enter into foreign exchange hedging agreements with financial institutions to reduce certain of our exposures to fluctuations in currency exchange rates. However, these hedging agreements may not eliminate foreign currency risk entirely and involve costs and risks of their own, such as ongoing management time and expertise and external costs related to executing hedging agreements.
The World of Hyatt loyalty program and our digital platforms build loyalty for our brands and drive hotel revenues which could be negatively impacted if we are unable to successfully operate the World of Hyatt loyalty program or further evolve the development and implementation of our digital platforms.
The World of Hyatt loyalty program is an experience platform for engagement with our most loyal guests and customers, providing increased benefits and recognition as they continue to engage with Hyatt. We believe World of Hyatt will continue to develop loyalty by fostering personal relationships and creating emotional connections that inspire brand preference. The success of our business depends in part on attracting new consumers, enhancing digital platforms that are preferred by guests and customers, and driving continued participation in the loyalty program. If guests, customers, third-party owners, or franchisees do not accept the loyalty platform or if we are unable to operate the loyalty program successfully, our business could be adversely impacted. Further, our digital platforms are focused on driving outstanding guest experiences that differentiate Hyatt and drive revenue through direct bookings but may not deliver all or part of the expected benefits. If our digital platforms do not evolve in a way that is able to adapt to future technology or keep pace with changes in consumer preferences and customer needs, our hotel performance could become increasingly challenged.
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Adverseincidents at, or adverse publicity concerning, our hotels or businesses or our corporate responsibility efforts could harm our brands and reputation, as well as adversely affect our market share, business, financial condition, or results of operations.
Our brands and our reputation are among our most important assets. Our reputational value is based, in part, on the external perceptions of Hyatt, the quality of our hotels and services, and our corporate and management integrity. We may experience harm to our reputation, loss of consumer confidence, or a negative impact to our results of operations as a result of an incident involving the potential safety or security of our guests, customers, colleagues, or visitors at our properties; adverse publicity regarding safety or security of travel destinations around the globe or at our competitors' properties, or in respect of our third-party vendors or owners and the industry; or any media coverage resulting therefrom.
Additionally, our reputation could be harmed if we fail, or are perceived to fail, to comply with various regulatory requirements or if we fail to meet stakeholder expectations in a number of areas such as health, safety and security; data security; human capital; corporate culture; group events with controversial groups or speakers; sustainability; responsible tourism; environmental stewardship; supply chain management; climate change; human rights; circular economy; biodiversity and natural capital; geopolitical crises; philanthropy and support for local communities; and corporate governance. Various policymakers, including the European Union and State of California, have adopted or are considering adopting requirements for companies to undertake certain disclosures or other actions regarding climate or other environmental and social matters that have historically been addressed primarily through corporate responsibility programs. Policymakers' approaches are not uniform, which may increase the cost or complexity of compliance and any associated risks. We manage a broad range of corporate responsibility matters, taking into consideration their expected impact on the sustainability of our business over time, and the potential impact of our business on society and the environment. Such efforts can be costly and complex, and we may not ultimately accomplish our desired goals or initiatives, either as intended or at all. Despite our efforts, consumer travel preferences may shift due to sustainability-related concerns or costs. In addition, stakeholder expectations regarding such matters are evolving, and navigating these issues will require us to successfully manage engagement with stakeholders of differing, or in some cases conflicting, views on these matters. Adverseincidents with respect to our corporate responsibility efforts could impact the value of our brands or our reputation, the cost of our operations, and relationships with investors and stakeholders, all of which could adversely affect our business and results of operations.
The continued expansion in the use and influence of social media has compounded the potential scope of negative publicity that could be generated, which may lead to litigation or governmental investigations or the damage of our reputation. Adverseincidents have occurred at our properties in the past and may occur in the future. Negativeincidents could lead to tangible adverse effects on our business, including lost sales, boycotts, reduced enrollment and/or participation in the loyalty program, or paid membership program that we manage, disruption of access to our digital platforms, loss of development opportunities, or reduced colleague retention and increased recruiting difficulties. In addition, the increasing prevalence and adoption of generative AI tools and LLMs, including ChatGPT, Claude, Gemini, Grok, and others, means that information about Hyatt, our brands, and our properties can be accessed quickly and easily. The manner in which these AI tools decide what information to provide in response to a given user query may also result in our properties receiving less attention by users of these tools. In cases where the information provided is inaccurate, incomplete, misguided, or misleading, the reputation of Hyatt and our brands could be impacted based on the contents of information provided, and there is no guarantee that our efforts to correct such issues will be successful. Any decline in the reputation or perceived quality of our brands or corporate image could adversely affect our market share, business, financial condition, or results of operations. Many of our suppliers, customers, and other stakeholders may be subject to similar risks, which may expand or create new risks, including in ways that may not be known to us.
Labor shortages could restrict our ability to operate our properties or grow our business or result in increased labor costs that could reduce our profits.
Our success depends in large part on the ability to attract, retain, train, manage, and engage our colleagues. Our properties are staffed 24 hours a day, seven days a week by thousands of colleagues around the world. If we and our third-party owners or franchisees are unable to attract, retain, train, and engage skilled colleagues, the ability to manage and staff properties adequately could be impaired, which could reduce customer satisfaction and limit our ability to grow and expand our business.
We have experienced challenges hiring for certain on-property and corporate positions due to various factors, such as competition for labor from other industries, and these circumstances could continue or worsen in the future to an extent and for durations that we are not able to predict. Labor shortages have resulted and could continue to result in higher wages and initial hiring costs, increasing our labor costs, which could reduce our revenues and profits.
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Management and Hotel Services, Franchising, Ownership, Development, and Financing Risks
If we are unable to maintain good relationships with third-party owners and franchisees and/or if we terminate agreements with defaulting third-party owners and franchisees, our revenues could decrease and we may be unable to maintain or expand our presence.
We earn fees for the provision of management, franchising, and hotel services to hotels and other properties and expect franchise ownership to continue to increase over time. The viability of our management and franchising business depends on our ability to establish and maintain good relationships with third-party owners and franchisees. Third-party developers, property owners, and franchisees are focused on maximizing the value of their investment and working with a management company or franchisor that can help them be successful. The effectiveness of our management, the value of our brands, and the rapport we maintain with our third-party owners and franchisees impact renewals of existing agreements and are also important factors for existing or new third-party owners or franchisees considering doing business with us. Our relationships with these third parties generate additional management and hotel services agreement and franchise agreement expansion opportunities that support our growth. As such, if we are unable to maintain good relationships with these third parties, our revenues could decrease or we may be unable to maintain or expand our presence. In addition, if third-party owners or franchisees breach the terms of our agreements with them, we may elect to exercise our termination rights, which would eliminate our revenues from these properties and cause us to incur expenses related to terminating these relationships. These risks become more pronounced during economic downturns.
Contractual and other disagreements with third-party owners or franchisees could make us liable to them or result in litigation costs or other expenses, which could lower our profits.
Our management and hotel services agreements and franchise agreements require us and third-party owners or franchisees to comply with operational and performance conditions that are subject to interpretation and could result in disagreements. Additionally, some courts have applied principles of agency law and related fiduciary standards to managers of third-party hotel properties like us, which means, among other things, that property owners may assert the right to terminate management and hotel services agreements even where the agreements do not expressly provide for termination. In the event of any such termination, we may need to enforce our right to damages or negotiate damages that may not equal expected profitability over the term of the agreement.
We generally seek to resolve any disagreements with our third-party owners or franchisees amicably. Formal dispute resolution occurs through arbitration, if provided under the applicable management and hotel services agreement or franchise agreement, or through litigation. We cannot predict the outcome of any such arbitration or litigation, the effect of any adverse judgment of a court or arbitrator against us, or the amount of any settlement we may enter into with any third party.
If our management and hotel services agreements or franchise agreements terminateprematurely or we elect to make cure payments due to failures to meet performance tests or upon the occurrence of other stated events, our revenues could decrease and our costs could increase.
Our management and hotel services agreements and franchise agreements may terminateprematurely in certain cases. Some of our management and hotel services agreements provide early termination rights to owners of the hotels we manage or provide services to upon the occurrence of a stated event, such as the sale of the hotel or our failure to meet a specified performance test, and some of our management and hotel services agreements grant hotel owners the right to terminate the agreement and convert the hotel to a Hyatt franchise agreement.
Generally, termination rights under performance tests are based on the property's individual performance, its performance when compared to a specified set of competitive hotels branded by other hotel operators, or both. Some agreements require a failure of one test, and other agreements require a failure of more than one test, before termination rights are triggered. These termination rights are usually triggered if we do not meet the performance tests over multiple years. Generally, we have the option to cure performance failures by making an agreed-upon cure payment. However, our cure rights may be limited, and the failure to meet the performance tests may result in the termination of our management and hotel services agreement. In the past, we have (1) failed performance tests, received notices of termination, and elected to make cure payments, (2) failed performance tests and negotiated an alternative resolution, and (3) failed performance tests and elected not to make a cure payment. When any termination notice is received, we evaluate all relevant facts and circumstances at the time in deciding whether to cure. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 15 to our Consolidated Financial Statements" for additional information related to performance cure payments. In addition, some of our management and hotel services agreements give third-party owners the right to terminate upon payment of a termination fee to us after a certain period of time, upon sale of the property, or another stated event. Our franchise agreements typically require franchisees to pay a fee to us before terminating. In addition, if an owner files for bankruptcy, our management and hotel services agreements and franchise agreements may be terminable under applicable law. If a management and hotel services agreement or franchise
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agreement terminates, we would lose the revenues we derive from that agreement and could incur costs related to ending our relationship with the third party and exiting the property.
Our growth strategy depends on attracting third-party owners and franchisees to our platform, and future arrangements with these third parties may be less favorable to us, depending on the terms offered by our competitors.
Our growth strategy includes entering into and maintaining various arrangements with property owners. The terms of our management and hotel services agreements and franchise agreements are influenced by contract terms offered by our competitors, among other things. We cannot assure you that any of our current arrangements will continue or that we will be able to enter into future arrangements, renew agreements, or enter into new agreements in the future on terms that are as favorable to us as those that exist today.
Some of our existing development pipeline may not be developed into new hotels or may not open on the anticipated timeline, which could materially adversely affect our growth prospects.
At December 31, 2025, our executed contract base consisted of approximately 830 hotels, or approximately 148,000 rooms. The commitments of owners and developers with whom we have agreements are subject to numerous conditions, and the eventual development and construction of our pipeline not currently under construction is subject to numerous risks, including, in certain cases, obtaining governmental and regulatory approvals and adequate financing. As a result, we cannot assure you that our entire development pipeline will be completed and developed into new hotels or that those hotels will open when anticipated, which may impact our net rooms growth. We also cannot assure you that consumer demand will meet the new supply as hotels open. The current macroeconomic environment and rising interest rates have resulted in, and could continue to result in, difficulties for certain hotel owners and franchisees to obtain commercially viable financing, which may negatively impact our future development pipeline.
If we or our third-party owners or franchisees are not able to maintain our current brand standards or we are not able to develop new initiatives, including new brands, successfully, our business and profitability could be harmed.
We manage, franchise, and provide services to properties owned by third parties under the terms of management and hotel services agreements and franchise agreements and expect franchise ownership to continue to increase significantly over time. These agreements require third-party owners or franchisees to comply with standards that are essential to maintaining our brand integrity and reputation. We depend on third-party owners or franchisees to comply with these requirements by maintaining and improving properties through investments, including investments in furniture, fixtures, amenities, and personnel. If our third-party owners or franchisees fail to make investments necessary to maintain or improve the properties we manage, franchise, or provide services to, our brand preference and reputation could suffer. Moreover, third-party owners or franchisees may be unwilling or unable to incur the cost of complying with brand standards for new and existing brands as such brands may evolve from time to time. This could result in poor hotel performance, cause us to absorb costs to ensure that brand standards come to market in a timely fashion, or result in us exerting resources to terminate agreements with such third-party owners or franchisees. Moreover, as we continue to increase our franchised hotel presence, our ability to maintain brand standards may become increasingly challenging.
In addition, we are continually evaluating and executing new initiatives, including new brands or marketing programs for new and acquired brands. We have invested capital and resources in owned and leased real estate, property development, brand development, and brand promotion. If such initiatives are not well received by our colleagues, guests, and owners, they may not have the intended effect. We may not be able to recover the costs incurred in developing, launching, or promoting new or acquired brands or other initiatives or to realize their intended or projected benefits, which could lower our profits.
Certain of our contractual arrangements with third-party owners require us to guarantee payments to the owners if specified levels of operating profit are not achieved by their hotels.
The terms of certain guarantees to hotel owners may require us to fund shortfalls if the hotels do not attain specified levels of operating profit. This guaranteed funding to hotel owners may not be recoverable to us and could lower our profits and reduce our cash flows. Through acquisitions, we acquired certain management and hotel services agreements with performance guarantees based on annual performance levels and with expiration dates between 2027 and 2045. We have in the past, and could in the future, be required to make payments, which could be material, pursuant to these guarantees. While neither the cumulative payments to date, nor expected payments, under our performance guarantees have been, or are expected to be, significant to our liquidity, future payments under these performance guarantees may adversely affect our financial performance and results of operations. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 15 to our Consolidated Financial Statements" for additional information related to our guarantees.
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We are exposed to the risks resulting from investments in owned and leased real estate, which could increase our costs, reduce our profits, limit our ability to respond to market conditions, or restrict our growth strategy.
Real estate ownership and leasing is subject to risks not applicable to managed or franchised properties, which could adversely affect our results of operations, cash flow, business, and overall financial condition, including:
• governmental regulations relating to real estate ownership;
• real estate, insurance, zoning, tax, environmental, and eminent domain laws;
• the ongoing need for owner-funded capital improvements and expenditures to maintain or upgrade properties;
• risks associated with mortgage debt, including the possibility of default, fluctuating interest rate levels, and the availability of replacement financing;
• risks associated with the possibility that cost increases will outpace revenue increases and that in the event of an economic slowdown, the high proportion of fixed costs will make it difficult to reduce costs to the extent required to offset declining revenues;
• fluctuations in real estate values or potential impairments in the value of our assets; and
• the relative illiquidity of real estate compared to some other assets.
We plan to continue to sell selected properties; however, we may be unable to sell selected owned properties at acceptable terms and conditions, if at all.
As part of our capital strategy, we have sold, and plan to continue from time to time to sell, certain properties, subject to a management and hotel services agreement or franchise agreement, with the primary purpose of reinvesting the proceeds to support the growth of our business, return capital to our stockholders, and/or to repay indebtedness. As we actively market and look to sell selected properties, general economic conditions, rising interest rates, and/or property-specific issues may negatively affect the value of our properties, prevent us from selling properties on acceptable terms or at expected values, or prevent us from selling properties within committed timeframes. We cannot guarantee that we will be able to consummate any such sales on commercially reasonable terms or at all, or that we will realize any anticipated benefits from such sales. Real estate investments often cannot be sold quickly. Dispositions of real estate assets can be particularly difficult in a challenging economic environment as financing alternatives are often limited for potential buyers. As a result, economic conditions and rising interest rates may prevent potential purchasers from obtaining financing on acceptable terms, if at all, thereby delaying or preventing our ability to sell the properties selected for disposition.
We may seek to expand our business through acquisitions of and investments in other businesses and properties, or through alliances, and these activities may be unsuccessful or divert our management's attention, and the success of any acquisition will depend, in part, on our ability to integrate the acquisition with our existing operations, including with respect to the implementation of internal controls over financial reporting.
We consider strategic and complementary acquisitions of and investments in other businesses, properties, brands, or other assets as part of our growth strategy. For instance, (i) in 2021, we acquired Apple Leisure Group ("ALG"), a leading luxury resort-management services, travel, and hospitality group, which also included the Unlimited Vacation Club paid membership program and ALG Vacations; (ii) in 2023, we completed the acquisitions of Dream Hotel Group's lifestyle hotel brands and management platform and Mr & Mrs Smith's boutique and luxury global travel platform, (iii) in 2024, we completed the acquisition of Standard International's lifestyle hotel brands and management platform and acquired a controlling financial interest in a consolidated hospitality venture that manages Bahia Principe Hotels & Resorts-branded properties and owns the Bahia Principe brand, and (iv) in 2025, we completed the Playa Hotels Acquisition. We may also pursue opportunities in alliance with existing or prospective owners of managed or franchised properties. In many cases, we will be competing for these opportunities with third parties that may have substantially greater financial resources than we do. Acquisitions of or investments in hospitality companies, businesses, properties, brands, or assets, as well as these alliances, are subject to risks that could affect our business, including risks related to:
• spending cash and incurring debt;
• assuming contingent liabilities;
• contributing properties or related assets to hospitality ventures that could result in recognition of losses;
• creating additional transaction, integration, and operating expenses; or
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• issuing shares of stock that could dilute the interests of our existing stockholders.
We cannot assure you that we will be able to identify opportunities or complete transactions on commercially reasonable terms or at all, or that we will realize any anticipated benefits from such acquisitions, investments, or alliances. There may be high barriers to entry in many key markets and scarcity of available development and investment opportunities in desirable locations. Similarly, we cannot assure you that we will be able to obtain financing for acquisitions or investments on attractive terms or at all, or that the ability to obtain financing will not be restricted by the terms of our revolving credit facility, our outstanding notes or bonds, or other indebtedness we may incur.
The success of any such acquisitions will also depend, in part, on our ability to integrate the acquisition with our existing operations. The inability to integrate completed acquisitions in an efficient and timely manner could result in reputational harm or have an adverse impact on our results of operations. Integration efforts may also take longer than we anticipate and involve unexpected costs. If we are unable to successfully integrate an acquired business, we may not realize the benefits that were expected at the time of acquisition. We may experience difficulty with integrating acquired businesses, properties, or other assets, including difficulties relating to:
• coordinating sales, distribution, loyalty, membership, and marketing functions;
• the failure to integrate and or interface internal systems, programs, and internal controls;
• the application of different accounting policies, assumptions, or judgments with respect to operational or financial results;
• effectively and efficiently integrating information technology and other systems;
• issues not discovered as part of the transactional due diligence process and/or unanticipated liabilities or contingencies of acquired businesses, including with respect to commercial disputes or cyber incidents and information technology failures or delays, matters related to data privacy, data localization, and the handling of personally identifiable information or other matters; and
• preserving the important licensing, distribution, marketing, owner, customer, labor, and other relationships of the acquired assets.
Further, we are required to assess the effectiveness of the internal control over financial reporting for companies we acquire or that are consolidated in our financial reporting pursuant to the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act"). In order to comply with the Sarbanes-Oxley Act, we will need to implement or enhance internal control over financial reporting at any company we acquire or consolidate, and we may identify control deficiencies that require remediation as part of our evaluation and testing of internal controls. Companies we acquire or consolidate may not have had previous public reporting obligations and therefore may not have instituted or evaluated internal controls in the context of the Sarbanes-Oxley Act. Implementing, remediating, or enhancingeffective internal controls as part of our integration of acquisitions or investments may be time-consuming, and we may encounter difficulties assimilating or integrating internal controls. We may be required to hire or engage additional resources and incur substantial costs to implement the necessary new internal controls as part of our acquisition or investment activities. Any failure to implement and maintain effective internal control over financial reporting could result in material weaknesses in our internal controls, and could result in a material misstatement of our consolidated financial statements or otherwise cause us to fail to meet our financial reporting obligations, which could have an adverse effect on our business, financial condition, results of operations, or stock price.
In addition, as a result of any acquisition activity, we may assume management and hotel services agreements and franchise agreements with terms that are not as favorable as other agreements within our portfolio and may result in loss of business over time. Any such acquisitions, investments, or alliances could also demand significant attention from our management team that would otherwise be available for our regular business operations, which could harm our business.
Timing, budgeting, and other risks could result in delays or cancellations of our efforts to develop, redevelop, or renovate the properties that we own or lease, or make these activities more expensive, which could reduce our profits or impair our ability to compete effectively.
We must maintain and renovate the properties that we own and lease in order to remain competitive, maintain the value and brand standards of our properties, and comply with applicable laws and regulations. The cost of funding renovations and capital improvements may exceed budgeted amounts. Additionally, the timing of renovations and capital improvements has in the past, and could in the future, affect property performance, including occupancy and ADR, particularly if we need to close a
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significant number of rooms or other facilities, such as ballrooms, meeting spaces, or restaurants. Moreover, the investments that we make may fail to improve the performance of the properties in the manner that we expect.
Economic and other conditions may adversely impact the valuation of our assets resulting in impairment charges that could have a material adverse impact on our results from operations.
We hold significant amounts of goodwill, intangible assets, property and equipment, operating lease right-of-use ("ROU") assets, and investments. We evaluate our assets for impairment quarterly based on various factors, including actual operating results, trends of projected revenues and profitability, potential or actual terminations of underlying management and hotel services agreements and franchise agreements, pending third-party offers, and significant adverse changes in the business climate. During times of economic distress, declining demand and declining earnings often result in declining asset values. As a result, we have incurred impairment charges, and may incur charges in the future, which could be material and may adversely affect our profits.
If our third-party owners and franchisees, including our hospitality venture partners, are unable to repay or refinance loans secured by mortgaged properties, our revenues, profits, and capital resources could be reduced and our business could be harmed.
Many of the properties owned by third parties, franchisees, or our hospitality ventures are pledged as collateral for mortgage loans entered into when such properties were purchased or refinanced. If our third-party owners, franchisees, or our hospitality venture partners are unable to repay or refinance maturing indebtedness on favorable terms or at all, the lenders could declare a default, accelerate the related debt, and repossess the property. Any sales or repossessions could, in certain cases, result in the termination of our management and hotel services agreements or franchise agreements and eliminate anticipated revenues, profits, and cash flows, which could negatively affect our results of operations.
If we or our third-party owners, franchisees, or development partners are unable to access the capital necessary to fund current operations or implement our plans for growth, our profits could be reduced and our ability to compete effectively could be diminished.
The hospitality industry is a capital-intensive business requiring significant capital expenditures to develop, operate, maintain, and renovate properties. Access to the capital that we or our third-party owners, franchisees, or development partners need to finance the construction of new properties or to maintain and renovate existing properties is critical to the continued growth of our business and our revenues.
The availability of capital or the conditions under which we or our third-party owners, franchisees, or development partners can obtain capital can have a significant impact on the overall level, cost, and pace of future development and therefore, the ability to grow our revenues. Credit markets have, and may continue, to experience significant disruptionseverely reducing liquidity and credit availability which has in the past, and could continue to, result in difficulties for certain third-party owners and franchisees to obtain commercially viable financing. Such disruptions may diminish the ability and desire of existing and potential development partners to access capital necessary to develop properties. Our ability to access additional capital could also be limited by the terms of our revolving credit facility, our outstanding notes, bonds, or other indebtedness we may incur, which restricts or may restrict our ability to incur debt under certain circumstances. Additionally, if one or more of the financial institutions that support our revolving credit facility fail, we may not be able to find a replacement, which would reduce the availability of funds that we can borrow under the facility.
If we are forced to spend larger than anticipated amounts of cash from operating activities to operate, maintain, or renovate existing properties, then our ability to use cash for other purposes, including acquisition or development of other businesses, properties, brands, or other assets could be limited and our profits could be reduced. Similarly, if we cannot access the capital we need to fund our operations or implement our growth strategy, we may need to postpone or cancel planned renovations or developments of our owned or leased properties, which could impair our ability to compete effectively and harm our business.
If we become liable for losses related to loans we have provided or guaranteed to third parties, our profits could be reduced.
At times, we make loans to our third-party owners, franchisees, or hospitality venture partners, and in other circumstances, we may provide senior secured financing or subordinated forms of financing to third-party owners or franchisees. We could sufferlosses if third-party owners, franchisees, or hospitality venture partners default on loans we provide. Additionally, we may provide financial guarantees to third-party lenders related to the timely repayment of all or a portion of the associated debt on certain properties. We typically obtain reimbursement agreements from our hospitality venture partners or other third parties with the intent to limit our exposure to our share of the debt. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 6 to our Consolidated Financial Statements" for additional information related to our loans
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and other financing arrangements and "Exhibits and Financial Statement Schedule—Note 15 to our Consolidated Financial Statements" for additional information related to our guarantees.
We are exposed to counterparty and credit risk and fluctuations in the market values of our investment portfolio.
Cash balances not required to fund our daily operating activities are invested in interest-bearing investments with a greater focus placed on capital preservation than on investment return. The majority of our cash and cash equivalent balances are held on deposit with high quality financial institutions that hold long-term ratings of at least BBB or Baa from S&P Global ("S&P") or Moody's Investors Service, Inc. ("Moody's"), respectively, and in AAA-rated money market funds. As such, we are exposed to counterparty risk on our cash and cash equivalent balances. We also have established investment accounts for purposes of investing portions of cash resources for the World of Hyatt loyalty program, certain benefit programs, and our captive insurance company. Although we have not recognized any significant losses to date on these investments, any significant declines in their market values could materially adversely affect our financial condition and results. Credit ratings and pricing of these investments can be negatively affected by liquidity, credit deterioration, financial results, economic risk, political risk, sovereign risk, or other factors. As a result, the value and liquidity of our investments could decline and result in impairments and/or credit loss reserves, which could materially adversely affect our financial condition and results of operations.
Technology and Information Systems Risks
Cyber risk and the failure to maintain the availability or security of our systems or customer, colleague, or Company data could adversely affect our business, harm our reputation, and/or subject us to costs, fines, penalties, investigations, enforcement actions, or lawsuits.
We collect, use, and retain large volumes of customer data, including payment card numbers and other personal information for business, marketing, and other purposes, and our various information technology systems capture, process, summarize, and report such data. We also maintain personal information and other data about our colleagues, as well as other forms of proprietary business information such as trade secrets. We store and process such customer, colleague, and Company data both at onsite facilities and at third-party owned facilities including, for example, in third-party hosted cloud environments. We also rely on the availability of information technology systems to operate our business, including communications; reservations; digital platforms, including the loyalty program and the paid membership program that we manage; guest services; payments; and other general operations. The availability and protection of customer, member, colleague, and Company data, as well as the continuous operation of our systems, are critical to our business. Our customers and colleagues expect that we, as well as our third-party owners, franchisees, licensees, hospitality venture partners, and service providers, will adequately protect their personal information and that our services will be continuously available.
The regulations and contractual obligations applicable to security and privacy are increasingly demanding, both in the United States and in other jurisdictions where we operate, and cyber threat actors regularly target the hospitality industry, including our business. In addition, the scope and complexity of the cyber threat landscape could affect our ability to adapt to and comply with changing regulatory obligations and expectations. Because of the scope and complexity of our information technology structure, our reliance on third-party hardware, software, and services to support and protect our structure and data, and the constantly evolving cyber threat landscape, our systems are vulnerable to cybersecurity risks that threaten the confidentiality, integrity, and availability of our information technology systems and confidential information, including from diverse threat actors and diverse attack vectors, including cyberterrorists, state actors, opportunistic hackers and hacktivists, malware (including ransomware), third-party disruptions, failures, or unauthorized access, as well as malfeasance by insiders, human or technological error, negligence, fraud, and as a result of bugs, misconfigurations, or exploitedvulnerabilities in software or hardware. Moreover, our systems, colleagues, and customers have been, and we expect will continue to be, targeted by social engineering/phishing attacks or account takeover tactics that may, among other things, aim to obtain funds or information fraudulently. These or similar occurrences, whether accidental or intentional, have in the past, and could in the future, result in an interruption in the operation of our systems or theft, unauthorized access, disclosure, destruction, encryption by ransomware, loss, and fraudulent or unlawful use of customer, colleague, or Company data, all of which has in the past, and could in the future, impact our business, result in operational interruptions, inefficiencies or loss of business, create negative publicity, cause harm to our reputation, or subject us to remedial and other costs, fines, penalties, investigations, enforcement actions, or lawsuits, including class actions. Additionally, we increasingly rely on third-party owners, franchisees, licensees, and hospitality venture partners who operate their own networks and systems and engage with their own service providers, and a security incident involving such networks or systems could lead to an interruption in, or other adverse effects on, our business, resulting in operational inefficiencies, potential exposure to fines or litigation, or loss of business, and negative publicity and reputational harm.
In addition, we may be subject to data risks and cybersecurity vulnerabilities as part of acquisition activities. Our due diligence and post-acquisition assessments of an acquiree's cybersecurity controls and procedures and information technology
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systems may not be sufficient to detect current or prior security incidents that have not yet been detected or to identify security measures that are not sufficient to appropriately address security risks to data and business continuity. Any such security incidents may pose material cybersecurity risks, including risks of theft, unauthorized access, disclosure, loss, and fraudulent use of customer, colleague, or Company data.
We have previously detected and disclosed prior incidents involving cyber threat actors who have attacked our systems, as well as those operated by third parties. We expect ongoing attempts to gain access to our systems and those operated by our third-party owners, franchisees, licensees, hospitality venture partners, and vendors. We also may be victims of current or future software supply chain incidents, even if those incidents are not directly targeted at Hyatt. We continue to use an evolving privacy and security risk management framework utilizing risk assessments to identify priorities for enhancements and security updates. While we implement security measures designed to safeguard our systems and data and have business continuity measures, and intend to continue implementing additional measures in the future, our implementation efforts may be incomplete or our measures may not be sufficient or timely enough to maintain the confidentiality, security, or availability of the data we collect, store, and use to operate our business. We work to continuously evaluate our security posture throughout our business and make changes to our operating processes and improve our defenses. Nonetheless, there can be no assurance that our cybersecurity risk management program and processes, including our policies, procedures, standards, and controls, will be fully implemented, complied with, or effective in protecting our systems and information. Attackers are also increasingly sophisticated and using techniques and tools, including AI, that can circumvent security controls, evade detection, and remove forensic evidence. As a result, we may be unable to detect, investigate, remediate, or recover from future attacks or incidents, or to avoid a material adverse impact to our systems, information, or business. Additionally, any integration of AI in our or any third party's operations, products or services is expected to pose new or unknown cybersecurity risks and challenges. Furthermore, although we carry cyber insurance that is designed to protect us against certain losses related to cyber risks, that insurance coverage may not be sufficient or available to cover all expenses or other losses that may occur, such as brand and reputational damage, loss of customers, loss of business partners, regulatory investigations, penalties and fines, legal claims, including class actions, brought by customers or employees, significant system or data restoration, hardware replacement, remediation or compliance costs, and/or other liabilities that may arise in connection with cyberattacks, security compromises, and other related incidents. Any future occurrences could result in costs and business impacts that may not be covered or may be in excess of any available insurance that we, or our third-party owners, franchisees, licensees, or hospitality venture partners, may have arranged. Furthermore, in the future such insurance may not be available on commercially reasonable terms, or at all. As a result, future incidents could have a material impact on our business and adversely affect our financial condition and results of operations.
The success of our business depends on complex internal and third-party information technology, cloud, and AI systems, and any failures, security incidents, data issues, regulatory challenges, integration difficulties, or inability to effectively develop, govern, or access these technologies could disrupt operations, reduce revenues, and harm our reputation and competitiveness.
Our success depends on the efficient and uninterrupted operation of our information technology systems and technology services delivered to Hyatt by third-party or cloud providers. For example, we depend on our central reservation system, which allows bookings by hotels directly, via telephone through our global care centers, by travel agents, through our digital platforms, and through online reservations agencies. We have made significant progress migrating to a new central reservation system, which we expect to be able to facilitate a more efficient booking process for our hotels; however, we may experience delays or system interruptions in connection with the migration over the course of 2026. Integration of complex systems and technology presents significant challenges in terms of costs, human resources, and development of effective internal controls. Integration of a third-party system also presents the risk of operational or security inadequacy or interruption, which could materially affect our ability to effectively operate our business. In addition, we depend on information technology to run our day-to-day operations, including, among others, hotel services and amenities such as guest check-in and check-out, guest room access, housekeeping and room service, and systems for tracking and reporting our financial results and the financial results of our hotels.
Our information technology systems and technology services delivered to Hyatt by third-party or cloud providers are vulnerable to damage or interruption from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, the exploitation of security "bugs," misconfigurations and criticalvulnerabilities, break-ins, critical software failures, and similar events. The occurrence of any of these natural or man-made disasters or unanticipatedproblems at any of our information technology facilities or any of our global care centers or at our third-party or cloud providers could cause interruptions or delays in our business, loss of data, or render us unable to process reservations.
In addition, if our information technology systems or technology services delivered to Hyatt by third-party or cloud providers are unable to provide the information communications capacity that we need or if these information technology systems sufferproblems caused by installing system enhancements, we could experience similar failures or interruptions. If our
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information technology systems or technology services delivered to Hyatt by third-party or cloud providers fail and redundant systems or disaster recovery plans are not adequate to address such failures or if our property and business interruption insurance does not sufficiently compensate us for any losses that we may incur, our revenues and profits could be reduced and the reputation of our brands and our business could be harmed.
We incorporate AI solutions into our information systems, offerings, services, and features, including proprietary AI and machine learning algorithms and models which we develop or fine tune, and these solutions, and future generative AI solutions, may become more important in our operations over time. As with many technological innovations, there are significant risks involved in developing, maintaining, and deploying these technologies, and we cannot assure that the usage of or our investments in such technologies will always enhance our products or services or be beneficial to our business, including our efficiency or profitability. In particular, if the models underlying our AI technologies are: incorrectly designed or implemented; trained or reliant on incomplete, inadequate, inaccurate, biased, or otherwise poor quality data, or on data to which we do not have sufficient rights or in relation to which we and/or the providers of such data have not implemented sufficient legal compliance measures; used without sufficient oversight and governance to ensure their responsible use; and/or adversely impacted by unforeseendefects, technical challenges, cybersecurity threats or material performance issues, the performance of our products, services and business, as well as our reputation, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.
Additionally, the ever-increasing use and evolution of technology, including AI and cloud-based computing and agentic AI solutions, creates opportunities for the potential loss or misuse of personal data that forms part of any data set and was collected, used, stored, or transferred to run our business, and unintentional dissemination or intentionaldestruction of confidential information stored in our environment or our third-party providers' systems, portable media, or storage devices, which may result in significantly increased business and security costs, a damaged reputation, administrative penalties, or costs related to defending legal claims. If the content, analyses, or recommendations that AI programs assist in producing are, or are alleged to be, deficient, misleading, inaccurate, incomplete, or biased, our business, financial condition, and results of operations and our reputation may be adversely affected. AI programs may be costly and require significant expertise to develop, may be difficult to configure and manage, and require periodic upgrades. While we take measures designed to ensure the accuracy of AI generated content, those measures may not always be successful, and in some cases, we may need to rely on end users to report such inaccuracies.
There is also a risk that we may not have access to the technology and qualified AI personnel resources to adequately incorporate ongoing advancements into our AI initiatives, including access to the licensing of key intellectual property or provision of key hardware from third parties. Our competitors or other third parties may incorporate AI into their offerings more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Our competition may have access to greater financial and technological resources, giving them a competitive advantage in recruiting, motivating, and retaining sought-after AI professionals. AI also presents emerging ethical issues and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability. The rapid evolution of AI, including existing and potential further government regulation of AI, will require significant resources to develop, test, evaluate, and maintain our platform, offerings, services, and features to help us implement AI ethically in order to minimize unintended, harmful impact.
In addition to our proprietary AI technologies, we use AI technologies licensed from third parties in our technologies and our ability to continue to use such technologies at the scale we need may be dependent on access to specific third-party software and infrastructure. We cannot control the availability or pricing of such third-party AI technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers. If any such third-party AI technologies become incompatible with our solutions or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI technologies are offered or terminate their relationship with us, our solutions may become less appealing to our customers and our business will be harmed. In addition, to the extent any third-party AI technologies are used as a hosted service, any disruption, outage, or loss of information through such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider. In addition, to the extent our use of technologies is or becomes concentrated on a limited number of third-party providers, we may be unable to transition to alternative providers without significant cost, delay, or operational disruption.
If we fail to stay current with developments in technology necessary for our business, our operations could be harmed and our ability to compete effectively could be diminished.
Sophisticated information technology and other systems are instrumental for the hospitality industry, including systems used for our central reservations, revenue management, property management, and loyalty program, as well as technology systems that we make available to our guests. These information technology and other systems include not only our own, but
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also any systems that we obtain through acquisition activity, and all such systems must be refined, updated, or replaced with more advanced systems on a regular basis. Developing and maintaining these systems may require significant capital to scale appropriately for our business requirements. If we are unable to replace or introduce information technology and other systems as quickly as our competitors or within budgeted costs or schedules when these systems become outdated or require replacement or if we are unable to achieve the intended benefits of any new information technology or other systems, our operations could be harmed and our ability to compete effectively could be diminished.
Hospitality Venture Risks
We have a limited ability to manage third-party risks associated with our hospitality venture investments, which could reduce our revenues, increase our costs, lower our profits, and/or increase our liabilities.
We participate in numerous hospitality ventures with third parties. We may also buy and develop properties in hospitality ventures with the sellers of the properties, affiliates of the sellers, developers, or other third parties. Our hospitality venture partners may have shared or majority control over the operations of our hospitality ventures. As a result, our investments in hospitality ventures involve risks that are different from the risks involved in investing in real estate independently. These risks include the possibility that our hospitality ventures or our partners:
• go bankrupt or otherwise are unable to meet their capital contribution obligations, especially in times of adverse economic conditions;
• have economic or business interests or goals that are or become inconsistent with our business interests or goals;
• are in a position to take action contrary to our instructions, our requests, our policies, our objectives, or applicable laws;
• subject the property to liabilities exceeding those contemplated;
• take actions that reduce our return on investment; or
• take actions that harm our reputation or restrict our ability to run our business.
For these and other reasons, it could be more difficult for us to sell our interest in any hospitality venture or to pursue the venture's activities, which could reduce our ability to address any problems we may have with those properties or respond to market conditions in the future and could lead to impairments of such investments. As a result, our investments in hospitality ventures could lead to impasses with our partners or situations that could harm the hospitality venture, which could reduce our revenues, increase our costs, and lower our profits.
In addition, in conjunction with financing obtained for our hospitality ventures, we may provide completion guarantees, debt repayment guarantees, or standard indemnifications to lenders for loss, liability, or damage occurring as a result of our actions or actions of the other hospitality venture owners.
As part of a prior transaction, we agreed to guarantee a portion of our hospitality venture partner's investment upon the occurrence of certain events, and we agreed to indemnify our hospitality venture partner, the primary obligor to the foreign taxing authorities, for obligations the entity may incur as a result of pre-existing uncertain tax positions as of the date of the transaction. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 4 to our Consolidated Financial Statements" for additional information.
If our hospitality ventures fail to provide accurate and/or timely information that is required to be included in our consolidated financial statements, we may be unable to accurately report our financial results.
Preparing our consolidated financial statements requires us to have access to information regarding the results of operations, financial position, and cash flows of our hospitality ventures. Any deficiencies in our hospitality ventures' internal controls over financial reporting may affect our ability to report our financial results accurately or prevent fraud. Such deficiencies could also result in restatements of, or other adjustments to, our previously reported or announced financial results, which could diminish investor confidence and reduce the market price of our Class A common stock. Additionally, if our hospitality ventures are unable to provide this information for any meaningful period or fail to meet expected deadlines, we may be unable to satisfy our financial reporting obligations or file our periodic reports in a timely manner.
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Cash distributions from our hospitality ventures could be limited by factors outside our control that could reduce our return on investment and our ability to generate liquidity from these hospitality ventures.
Although our hospitality ventures may generate positive cash flow, in some cases, these hospitality ventures may be unable to distribute that cash to the hospitality venture partners. Additionally, in some cases, our hospitality venture partners control distributions and may choose to leave capital in the hospitality venture rather than distribute it. Because our ability to generate liquidity from our hospitality ventures depends on the hospitality ventures' ability to distribute capital to us, tax considerations or decisions of our hospitality venture partners could reduce our return on these investments.
If we are unable to successfully manage the Unlimited Vacation Club paid membership program, our results of operations, including the collection of management and royalty fees related to the program, and cash flows could be negatively impacted.
We manage the Unlimited Vacation Club business under a long-term management agreement and license and royalty agreement, and our ability to manage the paid membership program successfully is dependent on a variety of factors, including the offering of preferred rate inventory, access to sales locations – which are primarily onsite at participating all-inclusive resorts, our ability to effectively manage costs associated with member acquisition, and our ability to timely collect membership fees. Significant sales efforts are required to enroll new members and upgrade or maintain current memberships, and these efforts can require considerable time and expense. The program's success is also dependent on our ability to manage and maintain good relationships with third-party owners to continue selling Unlimited Vacation Club memberships onsite and negotiate other favorable sales locations, and failure to do so could have a material adverse effect on the success and future growth of the program, which could reduce our fee revenues. If we are unable to manage the program successfully, our results of operations, including the collection of management and royalty fees related to the program, and cash flows could be negatively impacted.
Indebtedness Risks
Our indebtedness exposes us to a variety of financial and operational risks.
The terms of the indenture governing our Senior Notes, as defined in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Notes," and those of our revolving credit facility subject us to the following:
• a risk that cash flows from operations will be insufficient to meet required payments of principal and interest;
• restrictive covenants, including covenants related to maintaining certain financial ratios; and
• the risk that any additional increases in benchmark rates by the U.S. Federal Reserve and other international central banks, as occurred in 2023, will result in higher interest rates applicable to our fluctuating rate indebtedness, including borrowings under our revolving credit facility, which in turn could reduce our cash flows available for other corporate purposes, including investments in our portfolio, limit our ability to refinance existing debt when it matures, or increase interest costs on any debt that is refinanced.
See Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" for additional information related to restrictions under our financial covenants and the terms of the indenture governing our Senior Notes.
Although we anticipate we will be able to repay or refinance our existing indebtedness when it matures, there can be no assurance we will be able to do so, or that the terms of such refinancing will be favorable. Similarly, although we do not expect changes in interest rates to have a material effect on profits or cash flows, primarily due to our current limited reliance on borrowings tied to fluctuating rates, there can be no assurance that interest rates will not increase significantly from current levels.
A substantial decrease in operating cash flows or consolidated EBITDA as defined in our revolving credit facility, or a substantial increase in our expenses may make it difficult for us to meet our existing debt service requirements and restrictive covenants. As a result, we could be forced to sell assets and/or modify our operations. Our existing leverage may also impair our ability to obtain additional financing for acquisitions, working capital, capital expenditures, or other purposes, if necessary, or require us to accept terms otherwise unfavorable to us.
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Rating agency downgrades may increase our cost of capital.
The interest rate on borrowings and the facility fee under our revolving credit facility are determined by a pricing grid, which is dependent in part on our credit ratings by S&P, Moody's, and Fitch Ratings, Inc. ("Fitch"). Lower ratings result in a higher cost of funds. Therefore, if these independent rating agencies were to downgrade our credit ratings or if we no longer have a credit rating from any agency, the cost of our borrowing and the amount of the facility fee under our revolving credit facility will increase as specified in the pricing grid. Additionally, any future downgrade of our credit ratings by the rating agencies could reduce or limit our access to the capital markets and further increase our cost of capital.
Risks Related to Laws, Regulations, and Insurance
Our failure, or the failure by third-party owners, franchisees, or hospitality venture partners, to comply with applicable laws and regulations may increase our costs, reduce our profits, or limit our growth.
Our businesses, properties, and colleagues are subject to a variety of laws and regulations around the globe. Generally, these laws and regulations address our sales and marketing and advertising efforts, our handling of privacy issues and customer data, our anti-corruption efforts, our ability to obtain licenses for business operations such as sales of food and liquor, and matters relating to immigration, the environment, health and safety, health care, gaming, competition, and trade, among other things. Regulations related to the Unlimited Vacation Club business that we manage varies by jurisdictions and future regulations or changes to existing regulations may affect the business and the growth prospects of the Unlimited Vacation Club paid membership program.
Privacy
In the operation of our business, we collect, store, use, and transmit large volumes of personal data regarding colleagues, guests, customers, owners, licensees, franchisees, and our own business operations, including credit card numbers, reservation and loyalty data, and other personal data, in various information systems that we maintain and in systems maintained by third parties, including those of our owners, franchisees, licensees, and service providers. The integrity and protection of this personal data is critical to our business. The information, security, and privacy requirements imposed by global laws and governmental regulation, our contractual obligations, and the requirements of the payment card industry continue to change often, have become increasingly stringent in many jurisdictions and may vary significantly by jurisdiction. Our systems and the systems maintained or used by our owners, franchisees, licensees, and service providers may not be able to satisfy these changing legal and regulatory requirements or may require significant additional investments or time to do so. We have incurred, and may in the future incur, significant additional costs to meet these requirements, obligations, and expectations, and in the event of alleged or actual noncompliance, we may experience increased operating costs, increased exposure to payment obligations and litigation, and increased risk of damage to our reputation and brand.
Franchising Business
Our franchising business is subject to various laws, as well as to regulations enacted by the Federal Trade Commission ("FTC"). The FTC also regulates the manner and substance of our disclosures to prospective franchisees. In addition, a number of U.S. states and foreign countries require franchisors to register the franchise offering with the applicable governmental body and/or to make extensive disclosures to potential franchisees in connection with offers and sales of franchises in those states and countries. Further, a number of U.S. states and countries have "franchise relationship laws" or "business opportunity laws" that, among other restrictions, limit the ability of franchisors to terminate franchise agreements or to withhold consent to the renewal or transfer of agreements. Failure to comply with those laws, where applicable, can limit a franchisor's ability to enter into new franchise agreements or enforce the terms of existing franchise agreements and may create liability for fines, penalties, and civil judgments.
Vacation Units
Our licensed vacation units are subject to extensive state regulation in both the state in which the property is located and the states in which the property is marketed and sold. Marketing for these properties is also subject to federal regulation of certain marketing practices, including federal telemarketing regulations.
International Operations
Our business operations in countries outside the United States are subject to a number of U.S. federal laws and regulations, including restrictions imposed by the Foreign Corrupt Practices Act ("FCPA") as well as trade sanctions administered by the Office of Foreign Assets Control ("OFAC") and the Commerce Department. The FCPA is intended to prohibit bribery of foreign officials or parties and requires public companies in the United States to keep books and records that accurately and fairly reflect those companies' transactions. OFAC and the Commerce Department administer and enforce
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economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations, and individuals. Some of our business operations are also subject to the laws and regulations of non-U.S. jurisdictions, including the U.K. Bribery Act and anti-corruption legislation in the countries in which we conduct operations.
If we, our hospitality ventures, or our third-party owners and franchisees fail to comply with these laws and regulations, we could be exposed to claims for damages, financial penalties, reputational harm, incarceration of our colleagues, or restrictions on our operation or ownership of hotels and other properties, including the termination of our management, franchise, and ownership rights. These restrictions could increase our costs of operations, reduce our profits, or cause us to forgo development opportunities that would otherwise support our growth.
Adverse judgments or settlements resulting from legal proceedings in which we may be involved in the normal course of our business could reduce our profits or limit our ability to operate our business.
In the normal course of our business, we are often involved in various legal proceedings. The outcome of these proceedings cannot be predicted. If any of these proceedings were to be determined adversely to us or a settlement involving a payment of a material sum of money were to occur, there could be a material adverse effect on our financial condition and results of operations. Additionally, we could become the subject of future claims by third parties, including current or former third-party owners or franchisees, guests who use our properties, our employees, our investors, or regulators. Any significant adverse judgments or settlements would reduce our profits and could limit our ability to operate our business. Further, we may incur costs related to claims for which we have appropriate third-party indemnity if such third parties fail to fulfill their contractual obligations.
Changes in federal, state, local, or foreign tax law, interpretations of existing tax law, or agreements or disputes with tax authorities could affect our profitability and financial condition by increasing our tax costs.
Our global operations subject us to income taxes (e.g., corporate income, withholding, and other taxes in lieu of corporate income tax) and non-income taxes (e.g., sales, use, value added, goods and services, payroll, property, and franchise taxes in numerous jurisdictions). Our future tax expenses and liabilities could be affected by changes in tax laws or the interpretation of the tax laws, as well as changes in our business operations. Our future tax expenses could be affected by changes in the composition of earnings in jurisdictions with differing tax rates, changes to our transfer pricing methodologies, changes in the valuation of our deferred tax assets and liabilities, including net operating losses, or changes in determinations regarding the jurisdictions in which we are subject to tax. From time to time, the U.S. federal, state, local, and foreign governments make substantive changes to tax rules and the application thereof.
The Organization for Economic Cooperation and Development introduced Base Erosion and Profit Shifting Pillar Two rules that impose a global minimum tax rate of 15%. Numerous countries, including European Union member states, enacted legislation effective as of January 1, 2024, with general implementation of a global minimum tax as of January 1, 2025. We do not expect a material impact to our effective tax rate or cash flows based on currently enacted legislation and will continue to closely monitor evolving legislation and guidance that could change our current assessment.
Legislative and tax treaty changes and the interpretation thereof could result in materially higher corporate taxes than would be incurred under existing or prior tax law or interpretation and could adversely impact profitability. As tax authorities increase their efforts to increase revenues, changes in tax laws and the frequency of tax audits could increase our future tax liabilities.
We are subject to ongoing and periodic audits by the Internal Revenue Service ("IRS") and various state, local, and foreign tax authorities and currently are engaged in disputes with certain of such tax authorities. We are a party to certain agreements with tax authorities that reduce or defer the amount of tax we pay. The ultimate results of these agreements, or the expiration of such agreements, or changes in circumstances or in the interpretation of such agreements, could increase our tax costs. We believe we have established adequate reserves for potential tax liabilities, but the final amount of taxes, interest and penalties, in connection with any tax audit, could exceed the amount of such reserves, which could reduce our profits and cash position.
Negotiations of collective bargaining agreements, attempts by labor organizations to organize additional groups of our colleagues, or changes in labor laws could disrupt our operations, increase our labor costs, or interfere with the ability of our management to focus on executing our business strategies.
Certain of our properties are subject to collective bargaining agreements, similar agreements, or regulations enforced by governmental authorities. If relationships with our colleagues, other field personnel, or the unions that represent them become adverse, the properties we manage, own, or lease could experience labor disruptions such as strikes, lockouts, and public demonstrations. Labor disruptions, which are generally more likely when collective bargaining agreements are being
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renegotiated, could harm our relationship with our colleagues or cause us to lose guests. Further, adverse publicity in the marketplace related to union messaging could further harm our reputation and reduce customer demand for our services. Labor regulation, including minimum wage legislation, could lead to higher wage and benefit costs, changes in work rules that raise operating expenses, legal costs, and limitations on our ability or the ability of our third-party owners and franchisees to take cost saving measures during economic downturns. Collective bargaining agreements may also limit our ability to make timely staffing or labor changes in response to declining revenues.
We and our third-party owners and franchisees may also become subject to additional collective bargaining agreements in the future. Potential changes in the federal regulatory scheme could make it easier for unions to organize groups of our colleagues. If such changes take effect, more of our colleagues or other field personnel could be subject to increased organizational efforts, which could potentially lead to disruptions or require more of our management's time to address unionization issues. These or similar agreements, legislation, or changes in regulations could disrupt our operations, hinder our ability to cross-train and cross-promote our colleagues due to prescribed work rules and job classifications, reduce our profitability, or interfere with the ability of our management to focus on executing our business strategies.
Our franchisees and their hotel operators also currently may be or may become subject to collective bargaining agreements. Labor disruptions, labor regulation, and negotiation of labor agreements may be disruptive to a franchisee's operations which could impact our franchise fee revenues or harm our reputation. We do not participate in the negotiations of collective bargaining agreements covering unionized labor employed by third-party owners and franchisees.
Any failure to protect our trademarks and intellectual property could reduce the value of our brand names and harm our business.
The reputation and perception of our brands are critical to our success in the hospitality industry. We regularly apply to register our trademarks in the United States and other countries. However, we cannot assure you that those trademark registrations will be granted or that the steps we take to protect our trademarks or intellectual property in the United States and other countries will be adequate to prevent others, including third parties or former colleagues, from copying or using our trademarks or intellectual property without authorization. Our intellectual property is also vulnerable to unauthorized use in some countries outside the United States, where we may not be adequately protected by local law. If our trademarks or intellectual property are copied or used without authorization, the value of our brands, their reputation, our competitive advantages, and our goodwill could be harmed.
Monitoring the unauthorized use of our intellectual property is difficult. We may need to resort to litigation to enforce our intellectual property rights. Litigation of this type could be costly, force us to divert our resources, lead to counterclaims or other claimsagainst us, or otherwise harm our business.
Third-party claims that we infringe on their intellectual property rights could subject us to damages and other costs and expenses.
Third parties may make claimsagainst us for infringing their intellectual property rights. Any such claims, even those without merit, could:
• be expensive and time consuming to defend;
• force us to stop providing products or services that use the intellectual property that is being challenged;
• force us to redesign or rebrand our products or services;
• divert our management's attention and resources;
• force us to enter into royalty or licensing agreements to obtain the right to use a third-party's intellectual property; or
• force us to pay significant damages.
In addition, we may be required to indemnify third-party owners and franchisees of the hotels we manage, franchise, or provide services to for any losses they incur as a result of any such third-party infringementclaims. Any necessary royalty or licensing agreements may not be available to us on acceptable terms. Any costs, lost revenues, changes to our business, or management attention related to intellectual property claimsagainst us, whether successful or not, could impact our business.
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The extensive environmental requirements to which we are subject could increase our environmental costs and liabilities, reduce our profits, or limit our ability to run our business.
Our operations and properties are subject to extensive environmental laws and regulations of various federal, state, local, and foreign governments, including requirements addressing:
• health and safety;
• the use, management, storage, and disposal of hazardous substances and wastes;
• discharges of waste materials into the environment, such as refuse or sewage;
• water discharge and supply;
• air emissions;
• pollution; and
• environmental sustainability considerations, including biodiversity and climate change.
We could be subject to liability under some of these laws for the costs of investigating or remediating hazardous substances or wastes on, under, or in real property we currently or formerly manage, own, lease, or develop, or third-party sites where we sent hazardous substances or wastes for disposal. We could be held liable under these laws regardless of whether we knew of, or were at fault in connection with, the presence or release of any such hazardous or toxic substances or wastes. Some of these laws make each covered person responsible for all of the costs involved, even if more than one person may have been responsible for the contamination. Furthermore, a person who arranges for hazardous substances or wastes to be transported, disposed of, or treated offsite, such as at disposal or treatment facilities, may be liable for the costs of removal or remediation if those substances are released into the environment by third parties at such disposal or treatment facilities. The presence or release of hazardous or toxic substances or wastes, or the failure to properly clean up such materials, could cause us to incur significant costs, or jeopardize our ability to develop, use, sell, or rent real property we own, lease, or operate or to borrow using such property as collateral.
Other laws and regulations require us to manage, abate, or remove materials containing hazardous substances such as mold, lead, or asbestos during demolitions, renovations, or remodeling at properties that we manage, own, lease, or develop or to obtain permits for certain of our equipment or operations. The costs of such management, abatement, removal, or permitting could be substantial. Further, we may be subject to common law claims by third parties based on damages and costs resulting from violations of environmental regulations or from contamination associated with one or more of our properties. Complying with these laws and regulations, or addressing violations arising under them, could increase our environmental costs and liabilities, reduce our profits, or limit our ability to run our business. The identification of new areas of contamination, a change in the extent or known scope of contamination, a change in cleanup requirements, or the adoption of new requirements governing our operations could have a material adverse effect on our results of operations, financial condition, and business.
In addition, existing environmental laws and regulations may be revised or reinterpreted or new more stringent laws and regulations related to global climate change, air quality, or other environmental, health, and safety concerns may be adopted or become applicable to us. For example, compliance with future corporate responsibility and other climate-related legislation and regulation, and our efforts to achieve science-based emissions reduction and other targets, could be difficult and costly. As a result, we may experience significant increased operating and compliance costs, and operating disruptions or limitations, which could adversely affect our results of operations, financial condition, and business.
If the insurance that we, our third-party owners, hospitality ventures, franchisees, or licensees carry does not sufficiently cover damage or other potential losses or liabilities involving properties that we own, lease, manage, franchise, or provide services to, our profits could be reduced.
We, our third-party owners, hospitality ventures, franchisees, and licensees carry insurance from solvent insurance carriers that we believe is adequate for foreseeable losses and with terms and conditions that are reasonable and customary. Nevertheless, market forces beyond our control could limit the scope of the insurance coverage that we, our third-party owners, hospitality ventures, franchisees, or licensees can obtain or restrict our ability, our third-party owners', our hospitality ventures', our franchisees', or our licensees' ability to buy insurance coverage at reasonable rates. In the event of a substantial loss, the insurance coverage that we, our third-party owners, hospitality ventures, franchisees, or licensees carry may not be sufficient to pay the full value of our financial obligations, our liabilities, or the replacement cost of any lost investment or property loss. In addition, there are other risks or losses that may fall outside of the general coverage limits of our policies, may be uninsurable, or for which the cost of insurance is too expensive to justify. In some cases, these factors could result in certain losses being
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completely uninsured. As a result, we could lose some or all of the capital we have invested in a property as well as the anticipated future revenues, profits, management fees, franchise fees, or license fees from the property; we could remain obligated for performance guarantees in favor of third-party owners and franchisees or for their debt or other financial obligations; we could suffer an uninsured or underinsured property loss; or we may not have sufficient insurance to cover awards or damages resulting from our liabilities. If the insurance that we, our third-party owners, hospitality ventures, franchisees, or licensees carry does not sufficiently cover damages or other losses or liabilities, our profits could be adversely affected.
The Iran Threat Reduction and Syria Human Rights Act of 2012 could result in investigations by the U.S. Government against our Company and could harm our reputation and brands.
The Iran Threat Reduction and Syria Human Rights Act of 2012 ("ITRSHR Act") expanded sanctions against Iran and Syria. In addition, the ITRSHR Act instituted disclosure requirements in annual and quarterly reports for public companies engaged in, or affiliated with an entity engaged in certain activities involving the Government of Iran, involving other entities and persons targeted under certain OFAC sanctions, or otherwise involving specified activities under the ITRSHR Act. A company subject to Section 219 of the ITRSHR Act must make detailed disclosures about certain activities knowingly conducted by it or any of its affiliates. We did not identify any 2025 activities required to be disclosed. In the event Hyatt were to engage in certain activities that are subject to disclosure pursuant to Section 219 of the ITRSHR Act and Section 13(r) of the Exchange Act, we would be required to separately file, concurrently with any ITRSHR Act disclosure, a notice to the SEC that such activities were disclosed in our quarterly or annual report filings, which notice must also contain the information required by Section 13(r) of the Exchange Act. The SEC is required to post this notice of disclosure on its website and send the report to the President and certain Congressional committees. The President thereafter is required to initiate an investigation and, within 180 days of initiating such an investigation, to determine whether sanctions should be imposed on the Company. Disclosure of such activities, even if they are not subject to sanctions under applicable law, and any sanction actually imposed on us or our affiliates as a result of these activities, could harm our reputation and brands and have a negative impact on our results of operations.
Risks Related to Share Ownership and Other Stockholder Matters
Our stock price has been and could be volatile in the future, and holders of Class A common stock may not be able to resell shares at or above the price paid.
The stock market in general, and hospitality companies in particular, including us, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the underlying businesses. This market volatility, as well as general economic, market, or political conditions, could reduce the market price of our Class A common stock in spite of our operating performance. In addition, companies that own or lease a greater proportion of properties have at times experienced disproportionatevolatility and price and volume fluctuations, and we expect this dynamic could continue. These broad market and industry factors may seriouslyharm the market price of our Class A common stock, regardless of our actual operating performance.
In addition to the risks described in this section, several factors that could cause the price of our Class A common stock in the public market to fluctuate significantly include, among others, the following:
• quarterly variations in our operating results compared to market expectations;
• annual variations in our operating results compared to our guidance;
• withdrawals or suspensions of our guidance;
• announcements of acquisitions of or investments in other businesses and properties or dispositions;
• announcements of new services or products or significant price reductions by us or our competitors;
• size of our public float;
• future conversions to and sales of our Class A common stock by current holders of Class B common stock in the public market, or the perception in the market that the holders of a large number of shares of Class B common stock intend to sell shares;
• stock price performance of our competitors;
• fluctuations in stock market prices and volumes in the United States and abroad;
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• low investor confidence;
• default on our indebtedness or foreclosure of our properties;
• changes in senior management or key personnel;
• downgrades or changes in financial estimates by securities analysts or negative reports published by securities analysts about our business or the hospitality industry in general;
• negative earnings or other announcements by us or other hospitality companies;
• downgrades in our credit ratings or the credit ratings of our competitors;
• issuances or repurchases of equity or debt securities;
• a decision to pay or not to pay dividends;
• cyber incidents and information technology failures;
• terrorist activities or threats of such activities, civil or political unrest, or war; and
• global economic, legal, and regulatory factors unrelated to our performance.
Volatility in the market price of our Class A common stock may prevent investors from being able to sell their Class A common stock at or above the price at which they purchased the stock. As a result, investors may suffer a loss on their investment.
Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company's securities. This litigation, if instituted against us, could result in substantial costs, reduce our profits, divert our management's attention and resources, and/or harm our business.
There can be no assurance that we will declare or pay dividends in the future or that we will repurchase shares pursuant to our share repurchase program consistent with historical amounts or at all.
Our dividend policy or share repurchase program may change from time to time, and we may not declare dividends or repurchase shares in any particular amounts, in amounts consistent with historical practice, or at all. Our repurchase program does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares and the timing and amount of repurchases, if any, will depend on several factors, including market and business conditions, applicable debt covenants, the timing and amount of cash proceeds from asset dispositions, the timing and amount of any like-kind exchange transactions and other tax-planning matters, the trading price of our Class A common stock, the nature of other investment opportunities, and other factors as our board of directors may deem relevant from time to time. Dividend payments or repurchase activity could have a negative effect on our stock price, increase volatility, or fail to enhance shareholder value. The actual declaration and payment of future dividends, the amount of any such dividends, and the establishment of record and payment dates, if any, are subject to determination by our board of directors after its review of our business strategy, applicable debt covenants, financial performance and position, and other factors as our board of directors may deem relevant from time to time. Our declaration and payment of future dividends is subject to risks and uncertainties, including: deterioration of our financial performance or position, inability to declare a dividend in compliance with applicable laws or debt covenants, an increase in our cash needs or decrease in available cash, and the business judgment of the board of directors that a declaration of a dividend is not in the best interest of our stockholders.
Reports published by securities or industry analysts, including projections in those reports that exceed our actual results, could adversely affect our stock price and trading volume.
Securities research analysts have established and publish their own quarterly projections for our business. These projections may vary widely from one another and may not accurately predict the results we actually achieve. Our stock price may decline if our actual results do not match securities research analysts' projections. Similarly, if one or more of the analysts who writes reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, or the hospitality industry in general, our stock price could decline. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, our stock price or trading volume could decline.
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Anti-takeover provisions in our organizational documents and Delaware law, as well as agreements with our major stockholders, may discourage or prevent a change of control, even if a sale of Hyatt would be beneficial to our stockholders, which could cause our stock price to decline and prevent attempts by our stockholders to replace or remove our current board of directors or management.
Our amended and restated certificate of incorporation and bylaws, as well as agreements with our major stockholders, contain provisions that may make it difficult to remove our board of directors and management and may discourage or delay "change of control" transactions that certain stockholders may view as beneficial or could involve the payment of a premium over prevailing market prices for our Class A common stock. These provisions include, among others:
• Our amended and restated certificate of incorporation provides for a dual class ownership structure, in which our Class B common stock is entitled to ten votes per share and our Class A common stock is entitled to one vote per share. As a result of this structure, our major stockholders have significant influence or actual control over matters requiring stockholder approval.
• Voting agreements entered into with or among our major stockholders require these stockholders to vote their shares consistent with the recommendation of our board of directors, assuming in certain instances that a majority of a minimum of three independent directors (excluding for such purposes any Pritzker) or, in the case of transactions involving us and an affiliate, all of such minimum of three independent directors (excluding for such purposes any Pritzker) agree with the recommendation. While the voting agreements are in effect, they may provide our board of directors with effective control over matters requiring stockholder approval.
• Lock-up agreements entered into with stockholders party to our 2007 Stockholders' Agreement limit the ability of these stockholders to sell their shares to any person who would be required to file a Schedule 13D with the SEC disclosing an intent to acquire the shares other than for investment purposes and, in certain instances, to competitors of ours in the hospitality, lodging, or gaming industries.
• Stockholders party to our 2007 Stockholders' Agreement have agreed, subject to certain limited exceptions, to "standstill" provisions that prevent the stockholders from acquiring additional shares of our common stock, making or participating in acquisition proposals for us, or soliciting proxies in connection with meetings of our stockholders, unless the stockholders are invited to do so by our board of directors.
• Our board of directors is divided into three classes, with each class serving for a staggered three-year term, which prevents stockholders from electing an entirely new board of directors at an annual meeting.
• Our directors may be removed only for cause, which prevents stockholders from being able to remove directors without cause other than those directors who are being elected at an annual meeting.
• Our amended and restated certificate of incorporation does not provide for cumulative voting in the election of directors. As a result, holders of our Class B common stock will control the election of directors and the ability of holders of our Class A common stock to elect director candidates will be limited.
• Vacancies on our board of directors, and any newly created director positions created by the expansion of the board of directors, may be filled only by a majority of remaining directors then in office.
• Actions to be taken by our stockholders may only be effected at an annual or special meeting of our stockholders and not by written consent.
• Special meetings of our stockholders can be called only by the Chairman of the Board or by our corporate secretary at the direction of our board of directors.
• Advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors and propose matters to be brought before an annual meeting of our stockholders may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our Company.
• Our board of directors may, without stockholder approval, issue series of preferred stock, or rights to acquire preferred stock, that could dilute the interest of, or impair the voting power of, holders of our common stock or could also be used as a method of discouraging, delaying, or preventing a change of control.
• An affirmative vote of the holders of at least 80% of the voting power of our outstanding capital stock entitled to vote is required to amend any provision of our certificate of incorporation or bylaws.
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Pritzker family business interests have substantial control over us and have the ability to control the election of directors and other matters submitted to stockholders for approval, which will limit your ability to influence corporate matters or result in actions that you do not believe to be in our interests or your interests.
Our Class B common stock is entitled to ten votes per share and our Class A common stock is entitled to one vote per share. At January 31, 2026, Pritzker family business interests beneficially own, in the aggregate, 50,861,078 shares, or approximately 95.7%, of our Class B common stock, and 766,775 shares, or approximately 1.9%, of our Class A common stock, representing approximately 54.7% of the outstanding shares of our common stock and approximately 89.0% of the total voting power of our outstanding common stock. As a result, consistent with the voting agreements contained in the Amended and Restated Global Hyatt Agreement and the Amended and Restated Foreign Global Hyatt Agreement, Pritzker family business interests will be able to exert a significant degree of influence or actual control over our management and affairs and over matters requiring stockholder approval, including the election of directors, a merger, consolidation, or sale of all or substantially all of our assets and any other significant transaction. While the voting agreements are in effect, they may provide our board of directors with the effective control over matters requiring stockholder approval. Because of our dual class ownership structure, Pritzker family business interests will continue to exert a significant degree of influence or actual control over matters requiring stockholder approval, even if they own less than 50% of the outstanding shares of our common stock. This concentrated control will limit your ability to influence corporate matters, and the interests of Pritzker family business interests may not coincide with our interests or your interests. As a result, we may take actions that you do not believe to be in our interests or your interests and that could depress our stock price. See also "—Voting agreements entered into with or among our major stockholders, including Pritzker family business interests, will result in a substantial number of our shares being voted consistent with the recommendation of our board of directors, and may limit your ability to influence the election of directors and other matters submitted to stockholders for approval."
In addition, the difference in the voting rights between our Class A common stock and Class B common stock could diminish the value of the Class A common stock to the extent that investors or any potential future purchasers of our common stock ascribe value to the superior voting rights of the Class B common stock.
Disputes among Pritzker family members and among Pritzker family members and the trustees of the Pritzker family trusts may result in significant distractions to our management, disrupt our business, have a negative effect on the trading price of our Class A common stock, and/or generate negative publicity about Hyatt and the Pritzker family.
In the past, disputes have arisen between and among certain Pritzker family members, and between and among beneficiaries of the Pritzker family trusts and the trustees of such trusts, with respect to, among other things, the ownership, operation, governance, and management of certain Pritzker family business interests. In connection with certain of these disputes, claims were alleged, and in certain cases, proceedings were initiated, against certain Pritzker family members, including Thomas J. Pritzker, our executive chairman, and other Pritzker family members, some of whom have been or are our directors, and against the trustees, including Thomas J. Pritzker in his former capacity as a co-trustee of the Pritzker family U.S. situs trusts. Such past allegations related to, among others, trust management and administration and violations of certain trustee duties, including fiduciary duties. Some of these disputes led to significant negative publicity for the Pritzker family. These disputes were resolved with no admissions or finding of any misconduct.
Disputes among Pritzker family members, and between and among beneficiaries of the Pritzker family trusts and the trustees of such trusts, including with respect to Hyatt, may arise or continue in the future. If such disputes occur, they may result in significant distractions to our management, disrupt our business, have a negative effect on the trading price of our Class A common stock, and/or generate negative publicity about Hyatt and Pritzker family members, including Pritzker family members involved with Hyatt.
Voting agreements entered into with or among our major stockholders, including Pritzker family business interests, will result in a substantial number of our shares being voted consistent with the recommendation of our board of directors, and may limit your ability to influence the election of directors and other matters submitted to stockholders for approval.
Pritzker family business interests, which beneficially own at January 31, 2026, directly or indirectly, 51,627,853 shares, or 54.7% of our total outstanding common stock and control approximately 89.0% of our total voting power, have entered into a voting agreement with respect to all shares of common stock beneficially owned by Pritzker family business interests. During the term of the voting agreement, which expires on the date upon which more than 75% of the Company's fully diluted shares of common stock is owned by non-Pritzker family business interests, Pritzker family business interests have agreed to vote their shares of our common stock consistent with the recommendation of our board of directors with respect to all matters assuming agreement as to any such matter by a majority of a minimum of three independent directors (excluding for such purposes any Pritzker) or, in the case of transactions involving us and an affiliate, assuming agreement of all of such minimum of three independent directors (excluding for such purposes any Pritzker). In addition, at January 31, 2026, the stockholders party to the
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2007 Stockholder's Agreement beneficially own, in the aggregate, approximately 4.3% of our outstanding Class B common stock, representing approximately 4.0% of the total voting power of our outstanding common stock. Pursuant to the 2007 Stockholder's Agreement, the stockholders party thereto have entered into a voting agreement with us, with respect to the shares of common stock that they beneficially own, and have agreed to vote their shares of common stock consistent with the recommendation of our board of directors, without any separate requirement that our independent directors agree with the recommendation. This voting agreement expires on the date that Thomas J. Pritzker is no longer chairman of our board of directors. See Part I, Item 1, "Business—Stockholder Agreements."
While the voting agreements are in effect, they may provide our board of directors with effective control over matters requiring stockholder approval, including the election of directors, a merger, consolidation, or sale of all or substantially all of our assets and any other significant transaction. This is because the number of our shares that are required by the voting agreements to be voted consistent with the recommendation of our board of directors will be sufficient to determine the outcome of the election of directors and other matters submitted to stockholders for approval. This will limit your ability to influence the election of directors and other matters submitted to stockholders for approval, even if you do not believe those actions to be in our interests or your interests. For instance, the voting agreements may have the effect of delaying or preventing a transaction that would result in a change of control, if our board of directors does not recommend that our stockholders vote in favor of the transaction, even if you or some or all of our major stockholders believe that the transaction is in our interests or your interests. On the other hand, the voting agreements may result in our stockholders approving a transaction that would result in a change of control, if our board of directors recommends that our stockholders vote in favor of the transaction, even if you or some or all of our major stockholders believe that the transaction is not in our interests or your interests.
A significant number of shares of Class A common stock issuable upon conversion of Class B common stock could be sold into the market, which could depress our stock price even if our business is doing well.
Future sales in the public market of Class A common stock issuable upon conversion of Class B common stock, or the perception in the market that the holders of a large number of shares of Class B common stock intend to sell shares, could reduce the market price of our Class A common stock. At January 31, 2026, we had 41,336,292 shares of Class A common stock outstanding and 53,131,473 shares of Class B common stock outstanding.
At January 31, 2026, 41,314,039 shares of Class A common stock are freely tradable in the public market without restriction or further registration under the Securities Act of 1933, as amended (the "Securities Act") unless these shares are held by any of our "affiliates," as that term is defined in Rule 144 under the Securities Act ("Rule 144"). The remaining 22,253 outstanding shares of Class A common stock and 53,131,473 outstanding shares of Class B common stock are deemed "restricted securities," as that term is defined in Rule 144. Restricted securities may be sold in the public market only if they are registered under the Securities Act or they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act ("Rule 701"). Of these restricted securities, 2,270,395 shares of Class B common stock are held by stockholders party to the 2007 Stockholders' Agreement and are otherwise eligible to be sold at any time, subject to the applicable rights of first refusal, "drag along" rights and other restrictions contained in the 2007 Stockholders' Agreement. See Part I, Item 1, "Business—Stockholder Agreements—2007 Stockholders' Agreement." Another 22,253 shares of Class A common stock that are deemed restricted securities are otherwise eligible to be sold at any time.
The rest of the restricted securities, consisting of 50,861,078 shares of Class B common stock, together with 766,775 shares of Class A common stock previously registered, are subject to contractual lock-up and certain other restrictions contained in the Amended and Restated Global Hyatt Agreement and the Amended and Restated Foreign Global Hyatt Agreement as described in Part I, Item 1, "Business—Stockholder Agreements." These contractual restrictions may be amended, waived, or terminated by the parties to those agreements in accordance with the terms of such agreements without our consent and without notice; the 25% limitation on sales of our common stock may, with respect to each 12 month period, be increased to a higher percentage or waived entirely by the unanimous affirmative vote of our independent directors (excluding for such purposes any Pritzker). All such shares of Class A common stock, including shares of Class A common stock issuable upon conversion of shares of Class B common stock, will be eligible for resale in compliance with Rule 144 or Rule 701 to the extent the lock-up restrictions contained in the Amended and Restated Global Hyatt Agreement or the Amended and Restated Foreign Global Hyatt Agreement, as applicable, are waived or terminated with respect to such shares.
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Assuming the lock-up restrictions contained in the Amended and Restated Global Hyatt Agreement and the Amended and Restated Foreign Global Hyatt Agreement are not amended, waived, or terminated and that there are no transfers of shares amongst Pritzker family stockholders, and further assuming the parties to these agreements sell the maximum amount permitted to be sold during the first time period that such shares are eligible to be sold as set forth below, and subject to any applicable restrictions contained in such agreements and the provisions of Rule 144 and/or Rule 701, the securities eligible to be sold by Pritzker family stockholders under the Amended and Restated Global Hyatt Agreement and the Amended and Restated Foreign Global Hyatt Agreement will be available for sale in the public market as follows:
Time Period
Number of Shares (1)
During the 12 month period from November 5, 2025 through November 4, 2026
During the 12 month period from November 5, 2026 through November 4, 2027
During the 12 month period from November 5, 2027 through November 4, 2028
During the 12 month period from November 5, 2028 through November 4, 2029
During the 12 month period from November 5, 2029 through November 4, 2030
During the 12 month period from November 5, 2030 through November 4, 2031
During the 12 month period from November 5, 2031 through November 4, 2032
(1) The foregoing numbers are based on information at January 31, 2026 and assume that the maximum number of shares permitted to be sold during each period set forth above are, in fact, sold during each such period. To the extent any shares are not sold during the first time period that such shares are eligible to be sold as described above, the number of shares that may be sold in subsequent time periods may change.
In addition, at December 31, 2025, 7,560,515 shares of our Class A common stock were reserved for issuance under the Fifth Amended and Restated Hyatt Hotels Corporation Long-Term Incentive Plan (as amended, the "LTIP") and under the Playa Hotels N.V. 2017 Omnibus Incentive Plan (the "Playa Hotels Plan") for awards previously granted to continuing employees. These shares of Class A common stock will become eligible for sale in the public market once those shares are issued or awarded under our LTIP and the Playa Hotels Plan, subject to provisions of various award agreements and Rule 144, as applicable. In addition, 630,191 shares of our Class A common stock were reserved for issuance under the Hyatt Hotels Corporation Second Amended and Restated Employee Stock Purchase Plan ("ESPP"), 1,169,195 shares of our Class A common stock remained available for issuance pursuant to the Amended and Restated Hyatt Corporation Deferred Compensation Plan ("DCP"), and 300,000 shares of Class A common stock remained available for issuance pursuant to the Hyatt International Hotels Retirement Plan, commonly known as the Field Retirement Plan ("FRP").
If any of these holders causes a large number of securities to be sold in the public market, the sales could reduce the trading price of our Class A common stock. These sales also could impede our ability to raise future capital. See also "—If holders of shares of our Class B common stock convert their shares of Class B common stock into shares of Class A common stock and exercise their registration rights, a significant number of shares of our Class A common stock could be sold into the market, which could reduce the trading price of our Class A common stock and impede our ability to raise future capital."
We also may issue shares of our Class A common stock from time to time as consideration for future acquisitions and investments. If any such acquisition or investment is significant, the number of shares that we may issue may in turn be significant.
If holders of shares of our Class B common stock convert their shares of Class B common stock into shares of Class A common stock and exercise their registration rights, a significant number of shares of our Class A common stock could be sold into the market, which could reduce the trading price of our Class A common stock and impede our ability to raise future capital.
Holders of 53,131,473 shares of our Class B common stock or 56.2% of our total outstanding shares of common stock at January 31, 2026, including Pritzker family business interests, have rights, subject to certain conditions, to require us to file registration statements registering sales of shares of Class A common stock acquired upon conversion of such Class B common stock or to include sales of such shares of Class A common stock in registration statements that we may file for ourselves or for other stockholders. In order to exercise such registration rights, the holder must be permitted to sell shares of its common stock under applicable lock-up restrictions. See "—A significant number of shares of Class A common stock issuable upon conversion of Class B common stock could be sold into the market, which could depress our stock price even if our business is doing well" and Part I, Item 1, "Business—Stockholder Agreements" for additional information with respect to these lock-up provisions. Subject to compliance with applicable lock-up agreements, shares of Class A common stock sold under the registration statements can be freely sold in the public market. In the event such registration rights are exercised and a large number of shares of Class A common stock issuable upon conversion of shares of Class B common stock are sold in the public market, such sales could reduce the trading price of our Class A common stock. These sales also could impede our ability to
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raise future capital. Additionally, we will bear all expenses in connection with any such registrations other than underwriting discounts.
Following our decision in May 2023 to file a shelf registration statement on Form S-3 pursuant to Rule 415 of the Securities Act, certain stockholders party to the Registration Rights Agreement, dated as of October 12, 2009, among Hyatt and the Pritzker family business interests party thereto, elected to exercise their piggyback registration rights with respect to 9,245,902 shares of Class A common stock issuable upon conversion of shares of Class B common stock. On May 19, 2023, the Company filed an automatic effective shelf registration statement with the SEC to register the resale of such aggregate 9,245,902 shares. In connection with such registration, all other holders of registration rights, including trustees of trusts for the benefit of Thomas J. Pritzker and his lineal descendants, including Jason Pritzker, elected not to exercise their piggyback registration rights.
Subsequent to November 4, 2025, a trust for the benefit of Karen L. Pritzker and/or certain of her lineal descendants engaged in sales representing an aggregate of 12,000 shares of Class A common stock issuable upon conversion of Class B common stock. After giving effect to these transactions, as well as sales prior to November 4, 2025 by certain trusts for the benefit of Jennifer N. Pritzker and/or certain of her lineal descendants that resulted in such entities holding fewer shares than are registered for resale on the May 2023 shelf registration statement, as of the date of this filing, 8,434,635 shares of the 9,245,902 shares originally registered for resale on the May 2023 shelf registration statement continue to be eligible to be sold pursuant to the May 2023 shelf registration statement during the 12 month period from November 5, 2025 through November 4, 2026 under the lock-up restrictions contained in the Amended and Restated Global Hyatt Agreement and the Amended and Restated Foreign Global Hyatt Agreement. Subsequent to November 4, 2026, and assuming no further sales, 8,446,635 of the 9,245,902 shares originally registered for resale on the May 2023 shelf registration statement will continue to be eligible to be sold pursuant to the May 2023 shelf registration statement. Additional shares may be registered on the shelf registration statement in the future as such shares are eligible to be sold in accordance with the registration rights agreements and lock-up restrictions. See "—A significant number of shares of Class A common stock issuable upon conversion of Class B common stock could be sold into the market, which could depress our stock price even if our business is doing well" for additional information with respect to the lock-up provisions.
The sale of shares registered under the registration statement in the public market, or the perception that such sales may occur could reduce the trading price of our Class A common stock or impede our ability to raise future capital.
Non-U.S. holders who own more than 5% of our Class A common stock or substantial amounts of our Class B common stock may be subject to U.S. federal income tax on gain realized on the disposition of such stock.
Because we have significant U.S. real estate holdings, we may be a "United States real property holding corporation" ("USRPHC") for U.S. federal income tax purposes, but we have made no determination to that effect. There can be no assurance that we do not currently constitute or will not become a USRPHC. As a result, a "non-U.S. holder" may be subject to U.S. federal income tax on gain realized on a disposition of our Class A common stock if such non-U.S. holder has owned, actually or constructively, through certain family members, related entities, and options, more than 5% of our Class A common stock at any time during the shorter of (a) the five-year period ending on the date of disposition and (b) the non-U.S. holder's holding period in such stock.
If we were, or were to become, a USRPHC, a non-U.S. holder may be subject to U.S. federal income tax on gain realized on the disposition of our Class B common stock. Such tax would apply if on the date such non-U.S. holder actually or constructively acquired Class B common stock, and on any date on which such non-U.S. holder acquires additional Class B common stock, the aggregate fair market of the Class B common stock it actually and constructively owns is greater than 5% of the fair market value of our Class A common stock on such date. Certain dispositions of substantial amounts of Class B common stock by non-U.S. holders may be subject to withholding under Section 1445 of the Internal Revenue Code.
General Risk Factors
The loss of our senior executives or key field personnel, such as our general managers, could significantly harm our business.
Our ability to maintain our competitive position is dependent to a large degree on the efforts and skills of our senior executives. We have entered into employment letter agreements with certain of our senior executives. However, we cannot guarantee that these individuals will remain with us. Finding suitable replacements for our senior executives could be difficult. We currently do not have a life insurance policy or key person insurance policy with respect to any of our senior executives. Losing the services of one or more of these senior executives could adversely affect our strategic relationships, including relationships with our third-party owners, franchisees, hospitality venture partners, and vendors, and limit our ability to execute our business strategies.
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We also rely on the general managers to run daily hotel operations and oversee our colleagues. These general managers are trained professionals in the hospitality industry and have extensive experience in many markets worldwide. The failure to retain, train, or successfully manage our general managers, either by us or our third-party owners or franchisees, could negatively affect our operations.
• 21 managed properties and 2 franchised properties owned or leased by unconsolidated hospitality ventures (7,477 rooms);
• 72 franchised properties (10,147 rooms) operated by an unconsolidated hospitality venture in connection with a master license agreement by Hyatt; including 6 properties (1,246 rooms) that are leased by the unconsolidated hospitality venture; and
• 23 all-inclusive resorts (11,866 rooms) operated by a consolidated hospitality venture.
Our property portfolio also included:
• 22 vacation units (1,997 rooms) under the Hyatt Vacation Club brand and operated by third parties; and
• 42 residential units (4,696 rooms), which consist of branded residences that are either for sale or owned by a third-party and participating in a voluntary rental management program and are typically located within or adjacent to a Hyatt-branded full service hotel or in stand-alone developments.
Additionally, we provide certain reservation and/or loyalty program services to hotels that are unaffiliated with our hotel portfolio and operate under other trade names or marks owned by such hotels or licensed by third parties. We also offer distribution and destination management services through ALG Vacations and distribution services through Mr & Mrs Smith, a boutique and luxury global travel platform.
We believe our business model allows us to pursue more diversified revenue and income streams balancing both the advantages and risks associated with these lines of business. Our expertise and experience in each of these areas give us the flexibility to evaluate growth opportunities across our lines of business. Growth in the number of management and hotel services agreements and franchise agreements and earnings therefrom typically results in higher overall returns on invested capital because the capital investment under a typical management and hotel services agreement or franchise agreement is not significant. The capital required to build and maintain hotels we manage, franchise, or provide services to for third-party owners and franchisees is typically provided by the owner of the respective property with minimal capital required by us as the manager or franchisor. In certain instances, Hyatt has provided funding to owners for the acquisition and development of hotels that Hyatt will manage, franchise, or provide services to in the form of cash, debt repayment or performance guarantees, preferred equity, or mezzanine debt. During periods of increasing demand, we do not share fully in the incremental profits of hotel operations for hotels we manage for third-party owners as our arrangements generally include a base fee that is, typically, a percentage of revenue from the subject hotel and an incentive fee that is, typically, a percentage of hotel profits (in certain circumstances, after satisfying certain financial return thresholds to be earned by the owner), depending on the structure and terms of the management and hotel services agreement. We do not share in the benefits of increases in profits from franchised properties because franchisees pay us an initial application fee and ongoing royalty fees that are calculated as a percentage of
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gross room revenues, and also at times, as a percentage of food and beverage revenues, with no fees based on profits. Disputes or disruptions may arise with third-party owners and franchisees of hotels we manage, franchise, provide services to, or license to, and these disputes can result in the termination of the relevant agreement.
With respect to property ownership, we believe ownership of selected hotels in key markets enhances our ability to control our brand presence in these markets. Ownership of hotels allows us to capture the full benefit of increases in operating profits during periods of increasing demand and room rates. The cost structure of a typical hotel includes fixed costs, and therefore, as demand and room rates increase over time, the growth rate of operating profits typically is higher than the growth rate of revenues. The profits realized from our owned and leased hotels are generally more significantly affected by economic downturns and declines in revenues than the fee revenues earned from the properties we manage, franchise, or provide services to. This is because we absorb the full impact of declining profits for our owned and leased hotels, whereas our management and franchise fees do not have the same level of downside exposure to declining hotel profitability. Hotel ownership is more capital intensive than managing or franchising hotels for third-party owners and franchisees as we are responsible for the costs and capital expenditures for our owned and leased hotels. See also "—Principal Factors Affecting Our Results of Operations—Expenses" and Part I, Item 1A, "Risk Factors—Risks Related to Our Business—We are exposed to the risks resulting from investments in owned and leased real estate, which could increase our costs, reduce our profits, limit our ability to respond to market conditions, or restrict our growth strategy."
For the years ended December 31, 2025 and December 31, 2024, 69.8% and 75.8%, respectively, of our revenues were derived from operations in the United States. At December 31, 2025 and December 31, 2024, 66.7% and 65.3%, respectively, of our long-lived assets were located in the United States.
We report our consolidated operations in U.S. dollars. Amounts are reported in millions, unless otherwise noted. Percentages may not recompute due to rounding, and percentage changes that are not meaningful are presented as "NM." Constant dollar disclosures used throughout Management's Discussion and Analysis of Financial Condition and Results of Operations are not measures recognized in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See "—Key Business Metrics Evaluated by Management—Constant Dollar Currency" for further discussion.
We manage our business within three reportable segments. Within overhead, we include unallocated corporate expenses. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 19 to our Consolidated Financial Statements" for additional information regarding our segments.
Key Business Metrics Evaluated by Management
Revenues
We primarily derive our revenues from provision of management, franchising, and hotel services, licensing of our portfolio of brands to franchisees and other hospitality-related businesses, operation of our owned and leased hotel portfolio, and provision of distribution and destination management services . Management uses segment revenues to assess the overall performance of our business and to analyze trends such as consumer demand, brand preference, and competition. For a detailed discussion of our primary revenue sources, see "—Principal Factors Affecting Our Results of Operations—Revenues."
Adjusted EBITDA
We use the term Adjusted EBITDA throughout this annual report. 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 net income (loss) attributable to noncontrolling interests and our pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA, primarily based on our ownership percentage of each owned and leased venture, adjusted to exclude the following items:
• payments to customers ("contra revenue"), including performance cure payments and amortization of management and hotel services agreement and franchise agreement assets ("key money assets");
• revenues for reimbursed costs;
• reimbursed costs that we intend to recover over the long term;
• stock-based compensation expense;
• transaction and integration costs;
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• depreciation and amortization;
• equity earnings (losses) from unconsolidated hospitality ventures;
• interest expense;
• gains (losses) on sales of real estate and other;
• asset impairments;
• other income (loss), net; and
• benefit (provision) for income taxes.
We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA of each of our reportable segments and eliminations to unallocated overhead expenses.
Our board of directors and executive management team focus on Adjusted EBITDA as one of the key performance and compensation measures both on a segment and on a consolidated basis. Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations both on a segment and on a consolidated basis. Our President and Chief Executive Officer, who is our chief operating decision maker ("CODM"), also evaluates the performance of each of our reportable segments and determines how to allocate resources to those segments, in part, by assessing the Adjusted EBITDA of each segment. In addition, the talent and compensation committee of our board of directors determines the annual variable compensation and long-term incentive compensation for certain members of our management based in part on financial measures including and/or derived from consolidated Adjusted EBITDA, segment Adjusted EBITDA, or some combination of both.
We believe Adjusted EBITDA is useful to investors because it provides investors with the same information that we use internally for purposes of assessing our operating performance and making compensation decisions and facilitates our comparison of results with our prior-period and forecasted results as well as our industry and competitors.
Adjusted EBITDA excludes certain items that can vary widely across different industries and among companies within the same industry, including interest expense and benefit or provision for income taxes, which are dependent on company specifics, including capital structure, credit ratings, tax policies, and jurisdictions in which they operate; depreciation and amortization, which are dependent on company policies including how the assets are utilized as well as the lives assigned to the assets; contra revenue, which is dependent on company policies and strategic decisions regarding payments to hotel owners; and stock-based compensation expense, which varies among companies as a result of different compensation plans companies have adopted.
We exclude revenues for reimbursed costs and reimbursed costs which relate to the reimbursement of payroll costs and system-wide services and programs that we operate for the benefit of our hotel owners as contractually we do not provide services or operate the related programs to generate a profit or bear a loss over the long term. If we collect amounts in excess of amounts spent, we have a commitment to our hotel owners to spend these amounts on the related system-wide services and programs. Additionally, if we spend in excess of amounts collected, we have a contractual right to adjust future collections or expenditures to recover prior-period costs. These timing differences are due to our discretion to spend in excess of revenues earned or less than revenues earned in a single period to ensure that the system-wide services and programs are operated in the best long-term interests of our hotel owners. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively, and instead are designed to result in a cumulative break-even balance. Therefore, we exclude the net impact when evaluating period-over-period changes in our operating results. Adjusted EBITDA includes reimbursed costs related to system-wide services and programs that we do not intend to recover from hotel owners.
Finally, we exclude other items that are not core to our operations and may vary in frequency or magnitude, such as transaction and integration costs, asset impairments, unrealized and realized gains and losses on marketable securities, and gains and losses on sales of real estate and other.
Adjusted EBITDA is not a substitute for net income (loss) attributable to Hyatt Hotels Corporation, net income (loss), or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted
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EBITDA should not be considered as a measure of the income or loss generated by our business. Our management compensates for these limitations by referencing our GAAP results and using Adjusted EBITDA supplementally. See our consolidated statements of income (loss) in our consolidated financial statements included elsewhere in this annual report.
See "—Non-GAAP Measure Reconciliation" for a reconciliation of net income (loss) attributable to Hyatt Hotels Corporation to Adjusted EBITDA.
Adjusted General and Administrative Expenses
Adjusted general and administrative expenses, as we define it, is a non-GAAP measure. Adjusted general and administrative expenses excludes the impact of deferred compensation plans funded through rabbi trusts and stock-based compensation expense. Adjusted general and administrative expenses assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations, both on a segment and consolidated basis. See "—Results of Operations" for a reconciliation of general and administrative expenses to Adjusted general and administrative expenses.
ADR
ADR represents hotel room revenues divided by the total number of rooms sold in a given period. ADR measures the average room price attained by a property, and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a property or group of properties. ADR is a commonly used performance measure in our industry, and we use ADR to assess the pricing levels that we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described below.
Comparable system-wide and Comparable owned and leased
"Comparable system-wide" represents all properties we manage, franchise, or provide services to, including owned and leased properties, that are operated for the entirety of the periods being compared and that have not sustained substantial damage, business interruption, or undergone large-scale renovations during the periods being compared. Comparable system-wide also excludes properties for which comparable results are not available. We may use variations of comparable system-wide to specifically refer to comparable system-wide hotels or our all-inclusive resorts, for those properties that we manage, franchise, or provide services to within our management and franchising segment. "Comparable owned and leased" represents owned or leased hotels and/or all-inclusive resorts that are operated and consolidated for the entirety of the periods being compared and have not sustained substantial damage, business interruption, or undergone large-scale renovations during the periods being compared. Comparable owned and leased also excludes properties for which comparable results are not available. Comparable system-wide and comparable owned and leased are commonly used as a basis of measurement in our industry. "Non-comparable system-wide" or "non-comparable owned and leased" represent all properties, including those that do not meet the above definition of "comparable."
Constant Dollar Currency
We report the results of our operations both on an as reported basis, as well as on a constant dollar basis. Constant Dollar Currency, which is a non-GAAP measure, excludes the effects of movements in foreign currency exchange rates between comparative periods. We believe constant dollar analysis provides valuable information regarding our results as it removes currency fluctuations from our operating results. We calculate Constant Dollar Currency by restating prior-period local currency financial results at current-period exchange rates. These restated amounts are then compared to our current-period reported amounts to provide operationally driven variances in our results.
Net Package ADR
Net Package ADR represents net package revenues divided by the total number of rooms sold in a given period. Net package revenues generally include revenue derived from the sale of packages at all-inclusive resorts comprised of rooms, food and beverage, and entertainment revenues, net of compulsory tips paid to employees. Net Package ADR measures the average room price attained by a property, and Net Package ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a property or group of properties. Net Package ADR is a commonly used performance measure in our industry, and we use Net Package ADR to assess the pricing levels that we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described below.
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Net Package Revenue Per Available Room ("RevPAR")
Net Package RevPAR is the product of the Net Package ADR and the average daily occupancy percentage. Net Package RevPAR generally includes revenue derived from the sale of packages comprised of rooms, food and beverage, and entertainment revenues, net of compulsory tips paid to employees. Our management uses Net Package RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate property performance on a geographical and segment basis. Net Package RevPAR is a commonly used performance measure in our industry.
Net Package RevPAR changes that are driven predominantly by changes in occupancy have different implications for overall revenue levels and incremental profitability than do changes that are driven predominantly by changes in average room rates. For example, increases in occupancy at a property would lead to increases in net package revenues and additional variable operating costs, including housekeeping services, utilities, and room amenity costs. In contrast, changes in average room rates typically have a greater impact on margins and profitability as average room rate changes result in minimal direct impacts to variable operating costs.
Occupancy
Occupancy represents the total number of rooms sold divided by the total number of rooms available at a property or group of properties. Occupancy measures the utilization of a property's available capacity. We use occupancy to gauge demand at a specific property or group of properties in a given period. Occupancy levels also help us determine achievable ADR levels as demand for property rooms increases or decreases.
RevPAR
RevPAR is the product of the ADR and the average daily occupancy percentage. RevPAR does not include non-room revenues, which consist of ancillary revenues generated by a property, such as food and beverage, parking, and other guest service revenues. Our management uses RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate property performance on a geographical and segment basis. RevPAR is a commonly used performance measure in our industry.
RevPAR changes that are driven predominantly by changes in occupancy have different implications for overall revenue levels and incremental profitability than do changes that are driven predominantly by changes in average room rates. For example, increases in occupancy at a property would lead to increases in room revenues and additional variable operating costs, including housekeeping services, utilities, and room amenity costs, and could also result in increased ancillary revenues, including food and beverage. In contrast, changes in average room rates typically have a greater impact on margins and profitability as average room rate changes result in minimal direct impacts to variable operating costs.
Principal Factors Affecting Our Results of Operations
Our revenues and expenses are affected by a variety of factors. Revenues are primarily affected by consumer demand, which is closely linked to global and regional economic conditions and is sensitive to business and personal discretionary spending levels. Certain expenses associated with our business, including certain personnel costs, interest, rent, property taxes, insurance, and utilities, are relatively fixed and may increase at a greater rate than our revenues and/or may not be able to be reduced at the same rate as declining revenues. The fixed-cost nature of these expenses limits our ability to offset reductions in revenue through cost-cutting measures, which could adversely affect our net cash flows and profits. This effect can be especially pronounced during periods of economic contraction or slow economic growth and/or when demand rapidly and significantly decreases. See Part I, Item 1A, "Risk Factors—Risks Related to the Hospitality Industry" and "Risk Factors—Risks Related to Our Business."
During the fourth quarter of 2025, we amended our co-branded credit card agreement with a third-party, and as of the effective date of the amendment, the co-branded credit card programs were integrated into our loyalty program. Prior to the integration, certain amounts related to our co-branded credit card programs were recognized in other revenues, other direct costs, and general and administrative expenses on our consolidated statements of income (loss). Following the integration into the loyalty program, these amounts are recognized in revenues for reimbursed costs and reimbursed costs on our consolidated statements of income (loss). License fee revenues continue to be recognized within franchise and other fees. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 2 to our Consolidated Financial Statements."
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Revenues
We primarily derive our revenues from the following sources:
Gross fees. Represents revenues derived from management fees earned from managed hotels and residential units; franchise fees received in connection with the franchising of our brands; license fees received in connection with the licensing of the Hyatt brand names through our co-branded credit card programs and vacation units; management and royalty fees related to the management and licensing of certain of our brands to the Unlimited Vacation Club business; fees from hotel services provided to certain all-inclusive resorts within Latin America and the Caribbean; initial application fees from franchisees; design services fees from third-party owners and franchisees; and termination fees.
Owned and leased revenues. Represents revenues derived from hotel operations, including room rentals and food and beverage sales and other ancillary services at owned and leased hotels. Revenues from the majority of our hotel operations depend heavily on demand from group and transient travelers.
Revenues from room rentals and ancillary services are primarily derived from three categories of customers: transient, group, and contract. Transient guests are individual travelers who are traveling for business or leisure. Group guests travel for group events that reserve a minimum of 10 rooms for meetings or social functions sponsored by corporations, associations, and social, government, military, educational, religious, fraternal, or other organizations. Group business usually includes a block of room accommodations as well as other ancillary services, such as catering and banquet services. Contract guests travel under a contract negotiated for a block of rooms for more than 30 days in duration at agreed-upon rates. Airline crews are typical generators of contract demand for our hotels.
Distribution revenues. Represents revenues derived from the offering of travel products and services through ALG Vacations, including some or all of the following: air transportation; ground transportation and excursions; hotel accommodations primarily provided by third-party resorts; and travel insurance and car rentals provided by third parties. Distribution revenues also include commission fees related to Mr & Mrs Smith for bookings made directly through the platform and through third-party partners.
Other revenues. Represents revenues related to our co-branded credit card programs prior to the integration into the loyalty program as discussed above, the Unlimited Vacation Club paid membership program prior to the UVC Transaction as defined in "—Other Items" below, and the Destination Residential Management business, prior to its sale during the year ended December 31, 2023.
Revenues for reimbursed costs. Represents revenues for the reimbursement of costs incurred on behalf of third-party owners and franchisees. These reimbursed costs relate primarily 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.
Intersegment eliminations. Represents management fee revenues and expenses related to our owned and leased hotels, commission fee revenues and expenses related to certain ALG Vacations bookings, and free night award redemption revenues and expenses related to our co-branded credit card programs at owned and leased hotels, all of which are eliminated in consolidation.
Competition. The hospitality industry is highly competitive. Increased supply can put significant pressure on ADR at our properties as well as those of our competitors. We face competition from new distribution channels in the travel industry, including potential AI platforms; large companies that offer travel services as part of their business model; financial services providers such as credit card issuers; search engines; peer-to-peer inventory sources; and industry consolidation. We believe our brand strength and ability to manage our operations in an efficient manner will help us to continue competing successfully within the hospitality industry.
Agreements with third-party owners and franchisees and relationships with developers . We depend on our long-term management and hotel services agreements and franchise agreements with third-party owners and franchisees for a significant portion of our management and franchise fees revenues. The viability of our management and franchising business depends on our ability to establish and maintain good relationships with third-party owners and franchisees. Our relationships with these third parties generate additional management and hotel services agreement and franchise agreement expansion opportunities as well as new relationships with developers and opportunities for property development, all of which can support our growth. We believe we have good relationships with our third-party owners, franchisees, and developers in all of our segments and are committed to the continued growth and development of these relationships. These relationships exist with a diverse group of third-party owners, franchisees, and developers and are not heavily concentrated with any particular third party.
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Access to capital . The hospitality industry is a capital-intensive business requiring significant capital expenditures to develop, operate, maintain, and renovate properties. Third-party owners and franchisees are required to fund capital expenditures for the properties they own in accordance with the terms of the applicable management and hotel services agreement or franchise agreement. Access to the capital that we or our third-party owners, franchisees, or development partners need to finance the construction of new properties or to maintain and renovate existing properties is critical to the continued growth of our business and our revenues. The availability of capital or the conditions under which we or our third-party owners, franchisees, or development partners can obtain capital can have a significant impact on the overall level, cost, and pace of future development and therefore, the ability to grow our revenues.
Expenses
We primarily incur the following expenses:
General and administrative expenses. Consists primarily of compensation expenses, including deferred compensation plans funded through contributions to rabbi trusts for certain employees, for our colleagues at our corporate and regional offices, including those that support our management and franchising segment; professional fees, including consulting, audit, and legal fees; travel and entertainment expenses; sales and marketing expenses; credit loss reserves on certain receivables; and office administrative and related expenses, including rent expenses.
Owned and leased expenses. Reflects the expenses incurred to operate our owned and leased hotels, including rooms expenses, food and beverage costs, other support costs, and property expenses. Rooms expenses generally includes compensation costs or third-party service costs for housekeeping, laundry, and front desk staff and supply costs for guest room amenities and laundry. Food and beverage costs include costs for wait and kitchen staff and food and beverage products. Other support costs consist of expenses associated with property-level management, including deferred compensation plans funded through contributions to rabbi trusts for certain employees, utilities, sales and marketing, hotel spa operations, parking and other guest recreation, entertainment, and services. Property expenses include property taxes, repairs and maintenance, rent, and insurance.
Distribution expenses. Consists of expenses related to ALG Vacations, including costs directly related to selling travel products and related services such as chartered air expenses, credit card fees, and commission expenses, as well as destination management cost of sales. Distribution expenses also include compensation expenses, professional fees, sales and marketing expenses, and technology expenses related to ALG Vacations and Mr & Mrs Smith.
Other direct costs. Represents expenses related to direct costs associated with our co-branded credit card programs prior to the integration into the loyalty program as discussed above, the paid membership program prior to the UVC Transaction as defined in "—Other Items" below, and the Destination Residential Management business, prior to its sale during the year ended December 31, 2023.
Transaction and integration costs. Consists of expenses related to transaction costs for potential and completed transactions, primarily related to professional fees incurred for acquisitions and dispositions, as well as integration costs incurred primarily related to the integration of recently acquired businesses, including certain compensation expenses, professional fees, sales and marketing expenses, and technology expenses. Transaction costs incurred during the period of a completed disposition and thereafter are recognized in gains (losses) on sales of real estate and other or equity earnings (losses) from unconsolidated hospitality ventures, depending on the nature of the transaction.
Depreciation and amortization expenses. Depreciation expenses represent non-cash depreciation of fixed assets such as buildings, furniture, fixtures, and equipment at our consolidated owned and leased hotels and our corporate headquarters and regional offices. Amortization expenses primarily consist of amortization of management and hotel services agreement and franchise agreement intangibles and customer relationships intangibles. Changes in depreciation and amortization expenses may be driven by renovations of existing properties, acquisition or development of new properties and/or businesses, or the disposition of existing properties and/or businesses through sale or closure.
Reimbursed costs. Represents costs incurred on behalf of third-party owners and franchisees. These reimbursed costs relate primarily to payroll at managed properties where we are the employer, as well as costs related to system-wide services and the loyalty program operated on behalf of owners of managed and franchised properties.
Other Items
Acquisitions, dispositions, and significant renovations
From time to time, we may acquire businesses to support our long-term growth strategy. We also may acquire, dispose, or undertake large-scale renovations of hotel properties. The results of operations derived from these properties do not, therefore,
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meet the definition of comparable as defined in "—Key Business Metrics Evaluated by Management—Comparable system-wide and Comparable owned and leased." Our results of operations from the acquisition and disposition of these businesses and/or properties may be materially impacted period to period. These key transactions are discussed separately in "—Results of Operations," when material.
In 2025, we entered into the following key transactions:
• acquired all of the issued and outstanding ordinary shares of Playa Hotels, which included 15 owned all-inclusive resorts (the "Playa Hotels Portfolio"), and subsequently sold one of the owned properties to an unrelated third party and the shares of the entities that own the remaining 14 properties to Tortuga Resorts, an unrelated third party, (the "Tortuga sale" and, collectively, the "sale of the Playa Hotels Portfolio") and entered into long-term management agreements for 13 of the 15 hotels; and
• sold the shares of the entities that own Alua Atlántico Golf Resort, Alua Tenerife, and AluaSoul Orotava Valley (the "Alua Portfolio") and entered into long-term management agreements.
In 2024, we entered into the following key transactions:
• sold Hyatt Regency Orlando and an adjacent undeveloped land parcel and entered into a long-term management agreement and a development agreement, respectively;
• sold Park Hyatt Zurich and entered into a long-term management agreement;
• sold Hyatt Regency San Antonio Riverwalk and entered into a long-term management agreement;
• sold the shares of the entities that own Hyatt Regency Aruba Resort Spa and Casino and entered into a long-term management agreement;
• completed a restructuring of the entity that owns the Unlimited Vacation Club paid membership program business and sold 80% of the entity to an unrelated third party (the "UVC Transaction"), which resulted in deconsolidation of the entity, and entered into a long-term management agreement and license and royalty agreement;
• sold Hyatt Regency O'Hare Chicago and entered into a long-term franchise agreement;
• sold Hyatt Regency Green Bay and entered into a long-term franchise agreement;
• acquired a controlling financial interest in a hospitality venture that manages Bahia Principe Hotels & Resorts-branded properties and owns the Bahia Principe brand (the "Bahia Principe Transaction");
• acquired Standard International;
• acquired the Alua Portfolio; and
• acquired the Me and All Hotels brand name.
See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 4 and Note 7 to our Consolidated Financial Statements" for further discussion on these key transactions.
Effect of foreign currency exchange rate fluctuations
A significant portion of our operations are conducted in functional currencies other than our reporting currency, which is the U.S. dollar. As a result, we are required to translate those results from the functional currency into U.S. dollars at market-based average exchange rates during the period reported. When comparing our results of operations between periods, there may be material portions of the changes in our revenues or expenses that are derived from fluctuations in exchange rates experienced between those periods. See Part I, Item 1A, "Risk Factors—Risks Related to our Business—The risks of doing business internationally, or in a particular country or region, could lower our revenues, increase our costs, reduce our profits, or disrupt our business."
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RevPAR and Net Package RevPAR Statistics
The tables below include comparable system-wide RevPAR and Net Package RevPAR:
Year Ended December 31,
Number of comparable hotels (2)
RevPAR
Occupancy
ADR
(in constant $)
(in constant $)
Comparable system-wide hotels (1)
% pts
United States
% pts
Americas (excluding United States)
% pts
Greater China
% pts
Asia Pacific (excluding Greater China)
% pts
Europe
% pts
Middle East & Africa
% pts
(1) Consists of hotels that we manage, franchise, own, lease, or provide services to, excluding all-inclusive properties.
(2) During the year ended December 31, 2025, we removed the following properties from comparable hotels: 24 properties that left the hotel portfolio, seven properties that experienced an extended closure, four properties that underwent a significant renovation, three properties that experienced a seasonal closure, three properties that converted from franchised to managed, one property that temporarily suspended operations, and one property that underwent an expansion.
RevPAR at our comparable system-wide hotels increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by strong leisure transient travel outside of the United States. Business transient and group RevPAR increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by strong performance most notably in the first quarter of 2025, partially offset by lower demand at select service properties in the United States.
During the year ended December 31, 2025, group booking production decreased at our comparable full service managed hotels in the United States, compared to the year ended December 31, 2024, driven by lower bookings in the year, partially offset by increased bookings in future years.
Year Ended December 31,
Number of comparable resorts (3)
Net Package RevPAR
Occupancy
Net Package ADR
(in reported $)
(in reported $)
Comparable system-wide all-inclusive resorts (1)
% pts
Americas (excluding United States)
% pts
Europe (2)
% pts
(1) Consists of all-inclusive properties that we manage, lease, or provide services to.
(2) Certain resorts operate under a hybrid all-inclusive model, which includes various all-inclusive package options as well as rooms-only options.
(3) During the year ended December 31, 2025, we removed the following properties from comparable resorts: eight properties that converted from franchised to managed, four properties that left the hotel portfolio, four properties that experienced an extended closure, four properties that experienced a seasonal closure, three properties that underwent a significant renovation, and one property that underwent an expansion.
Net Package RevPAR at our comparable all-inclusive resorts increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by higher demand and Net Package ADR.
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Year Ended December 31,
Number of comparable hotels (2)
RevPAR
Occupancy
ADR
(in constant $)
(in constant $)
Comparable owned and leased hotels (1)
% pts
(1) Excludes unconsolidated hospitality ventures and all-inclusive leased properties.
(2) During the year ended December 31, 2025, no properties were removed from comparable hotels.
RevPAR at our comparable owned and leased hotels increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by strong group and business transient travel benefiting from higher ADR.
Results of Operations
Year Ended December 31, 2025 Compared with Year Ended December 31, 2024
Consolidated Results
For additional information regarding our consolidated results, refer to our consolidated statements of income (loss) included in Part IV, Item 15, "Exhibits and Financial Statement Schedule—Consolidated Financial Statements."
The impact from our investments in marketable securities held to fund our deferred compensation plans through rabbi trusts was recognized on the following financial statement line items on our consolidated statements of income (loss) and had no impact on net income (loss): revenues for reimbursed costs; general and administrative expenses; owned and leased expenses; reimbursed costs; and net gains (losses) and interest income from marketable securities held to fund rabbi trusts.
Fee revenues.
Year Ended December 31,
Better / (Worse)
Base management fees
Incentive management fees
Franchise and other fees
Gross fees
Contra revenue
Net fees
Base and incentive management fees increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by portfolio growth, inclusive of the Bahia Principe Transaction, with base management fees also benefiting from increased leisure transient demand and incentive management fees benefiting from hotel performance outside of the United States.
Franchise and other fees increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by license fees related to our co-branded credit card programs, management and royalty fees related to the management of and licensing of certain of our brands to the Unlimited Vacation Club paid membership program following the UVC Transaction, and franchise fees due to portfolio growth, partially offset by franchise fees recognized in 2024 related to properties that were acquired in the Playa Hotels Acquisition.
Contra revenue increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to incremental key money assets amortization and a payment made to a third-party owner.
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Owned and leased revenues .
Year Ended December 31,
Better / (Worse)
Currency Impact
Comparable owned and leased revenues
Non-comparable owned and leased revenues
Owned and leased revenues
Comparable owned and leased revenues increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by strong group and business transient travel.
Non-comparable owned and leased revenues increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the Playa Hotels Acquisition, partially offset by net disposition activity in 2024.
Distribution revenues. During the year ended December 31, 2025, distribution revenues decreased $77 million, compared to the year ended December 31, 2024, primarily driven by lower booking and departure volume within ALG Vacations, in part due to reduced demand at lower chain scale properties as well as the impact of Hurricane Melissa.
Other revenues. During the year ended December 31, 2025, other revenues decreased $30 million, compared to the year ended December 31, 2024, primarily driven by the UVC Transaction.
Revenues for reimbursed costs.
Year Ended December 31,
Change
Revenues for reimbursed costs
Less: rabbi trust impact (1)
Revenues for reimbursed costs, excluding rabbi trust impact
(1) The change was driven by the market performance of the underlying invested assets and offsets with the rabbi trust impact within reimbursed costs.
Revenues for reimbursed costs increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by higher reimbursements for payroll and related expenses at managed properties where we are the employer and an increase in reimbursed costs related to system-wide services provided to managed and franchised properties. The higher reimbursements for expenses were due to increased demand at our existing properties and portfolio growth.
General and administrative expenses .
Year Ended December 31,
Change
General and administrative expenses
Less: rabbi trust impact (1)
Less: stock-based compensation expense
Adjusted general and administrative expenses (2)
(1) The change was driven by the market performance of the underlying invested assets and offsets with the rabbi trust impact within net gains (losses) and interest income from marketable securities held to fund rabbi trusts.
(2) See "—Key Business Metrics Evaluated by Management—Adjusted General and Administrative Expenses" for further discussion.
General and administrative expenses increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to credit loss reserves on certain receivables and increased payroll and related costs associated with the Bahia Principe Transaction and the Playa Hotels Acquisition, partially offset by reduced expenses due to organizational changes and the impact of the UVC Transaction.
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Owned and leased expenses .
Year Ended December 31,
Better / (Worse)
Comparable owned and leased expenses
Non-comparable owned and leased expenses
Rabbi trust impact (1)
Owned and leased expenses
(1) The change was driven by the market performance of the underlying invested assets and offsets with the rabbi trust impact within net gains (losses) and interest income from marketable securities held to fund rabbi trusts.
Comparable owned and leased expenses increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to increased variable expenses at certain hotels, most notably payroll and related costs.
Non-comparable owned and leased expenses increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the Playa Hotels Acquisition, partially offset by net disposition activity in 2024.
Distribution expenses. During the year ended December 31, 2025, distribution expenses decreased $52 million, compared to the year ended December 31, 2024, primarily driven by cost management strategies and lower variable expenses at ALG Vacations as a result of lower booking and departure volume, in part due to reduced demand at lower chain scale properties as well as the impact of Hurricane Melissa.
Other direct costs . During the year ended December 31, 2025, other direct costs decreased $21 million, compared to the year ended December 31, 2024, primarily driven by the UVC Transaction.
Transaction and integration costs . During the year ended December 31, 2025, transaction and integration costs increased $131 million, compared to the year ended December 31, 2024, primarily due to transaction and integration costs related to the Playa Hotels Acquisition. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 7 to our Consolidated Financial Statements" for additional information.
Depreciation and amortization expenses . During the year ended December 31, 2025, depreciation and amortization expenses decreased $8 million, compared to the year ended December 31, 2024, primarily driven by lower depreciation expense as a result of net disposition activity in 2024 and lower amortization expense related to the UVC Transaction, partially offset by additional amortization expense for intangible assets acquired in the Bahia Principe Transaction.
Reimbursed costs .
Year Ended December 31,
Change
Reimbursed costs
Less: rabbi trust impact (1)
Reimbursed costs, excluding rabbi trust impact
(1) The change was driven by the market performance of the underlying invested assets and offsets with the rabbi trust impact within revenues for reimbursed costs.
Reimbursed costs increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by increased payroll and related expenses at managed properties where we are the employer and expenses related to system-wide services provided to managed and franchised properties. The higher expenses were due to increased demand at our existing properties and portfolio growth.
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts .
Year Ended December 31,
Better / (Worse)
Rabbi trust gains (losses) allocated to general and administrative expenses
Rabbi trust gains (losses) allocated to owned and leased expenses
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts
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Equity earnings (losses) from unconsolidated hospitality ventures.
Year Ended December 31,
Better / (Worse)
Impairment charges related to investments in unconsolidated hospitality ventures (1)
Hyatt's share of unconsolidated hospitality ventures' net gains (losses) excluding foreign currency
Hyatt's share of unconsolidated hospitality ventures' foreign currency exchange, net
Net gains (losses) from sales activity related to unconsolidated hospitality ventures (1)
Gain on dilution of ownership interest in an unconsolidated hospitality venture (1)
Distributions from unconsolidated hospitality ventures
Other (2)
Equity earnings (losses) from unconsolidated hospitality ventures
(1) See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 4 to our Consolidated Financial Statements" for additional information.
(2) The year ended December 31, 2024 includes equity losses primarily related to a debt repayment guarantee for a hotel property in the United States.
Interest expense. During the year ended December 31, 2025, interest expense increased $137 million, compared to the year ended December 31, 2024, primarily due to the issuances of senior notes in 2024 and 2025, the loans under the delayed draw term loan facility (the "DDTL Facility"), and bridge commitment fees related to the Playa Hotels Acquisition, partially offset by the redemption of certain of our senior notes in 2024 and 2025. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 11 to our Consolidated Financial Statements" for additional information.
Gains (losses) on sales of real estate and other. During the year ended December 31, 2025, we recognized the following:
• $34 million pre-tax loss related to the sale of the Playa Hotels Portfolio; and
• $21 million pre-tax gain related to the sale of the shares of the entities that own the Alua Portfolio.
During the year ended December 31, 2024, we recognized the following:
• $514 million pre-tax gain related to the sale of Hyatt Regency Orlando and an adjacent undeveloped land parcel;
• $257 million pre-tax gain related to the sale of Park Hyatt Zurich;
• $231 million pre-tax gain related to the UVC Transaction;
• $172 million pre-tax gain related to the sale of the shares of the entities that own Hyatt Regency Aruba Resort Spa and Casino;
• $100 million pre-tax gain related to the sale of Hyatt Regency San Antonio Riverwalk;
• $17 million pre-tax loss related to a decrease in the carrying value of the contingent consideration receivable recorded in conjunction with the sale of the Destination Residential Management business in 2023;
• $5 million pre-tax loss related to the sale of Hyatt Regency O'Hare Chicago; and
• $4 million pre-tax loss related to the sale of Hyatt Regency Green Bay.
See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 4 and Note 7 to our Consolidated Financial Statements" for additional information.
Asset impairments. During the year ended December 31, 2025, we recognized $40 million of impairment charges related to $32 million of intangible assets, $6 million of property and equipment, and $2 million of operating lease ROU assets. During the year ended December 31, 2024, we recognized $213 million of impairment charges related to $163 million of goodwill, $24 million of intangible assets, $21 million of property and equipment, and $5 million of operating lease ROU assets. See Part
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IV, Item 15, "Exhibits and Financial Statement Schedule—Note 5, Note 8, and Note 9 to our Consolidated Financial Statements" for additional information.
Other income (loss), net . During the year ended December 31, 2025, other income (loss), net decreased $156 million compared to the year ended December 31, 2024. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 21 to our Consolidated Financial Statements" for additional information.
Provision for income taxes .
Year Ended December 31,
Change
Income before income taxes
Provision for income taxes
Effective tax rate
Provision for income taxes decreased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the sales of Hyatt Regency Orlando and an adjacent undeveloped land parcel, Hyatt Regency Aruba Resort Spa and Casino, Park Hyatt Zurich, and Hyatt Regency San Antonio Riverwalk, as well as the UVC Transaction in 2024.
The effective tax rate increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by reduced pre-tax income and a non-cash tax adjustment related to deferred tax assets in 2025.
See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 14 to our Consolidated Financial Statements" for additional information.
Non-GAAP Measure Reconciliation
The table below provides a reconciliation of net income (loss) attributable to Hyatt Hotels Corporation to Adjusted EBITDA:
Year Ended December 31,
Change
Net income (loss) attributable to Hyatt Hotels Corporation
Contra revenue
Revenues for reimbursed costs
Reimbursed costs
Stock-based compensation expense (1)
Transaction and integration costs
Depreciation and amortization
Equity (earnings) losses from unconsolidated hospitality ventures
Interest expense
(Gains) losses on sales of real estate and other
Asset impairments
Other (income) loss, net
Provision for income taxes
Net income attributable to noncontrolling interests
Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA
Adjusted EBITDA
(1) Includes amounts recognized in general and administrative expenses, owned and leased expenses, and distribution expenses; excludes amounts recognized in transaction and integration costs.
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Segment Results
We evaluate segment operating performance using segment revenues and Adjusted EBITDA. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 19 to our Consolidated Financial Statements" for additional information, including a reconciliation of segment Adjusted EBITDA to income before income taxes.
Management and franchising segment revenues and Adjusted EBITDA .
Year Ended December 31,
Better / (Worse)
Gross fees (1)
Other revenues
Segment revenues (2)
(1) See "—Results of Operations" for further discussion regarding the increase in gross fee revenues.
(2) Includes $51 million and $49 million of intersegment revenues for the years ended December 31, 2025 and December 31, 2024, respectively.
Year Ended December 31,
Better / (Worse)
Segment Adjusted EBITDA
Adjusted EBITDA increased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by increases in gross fee revenues, partially offset by increased general and administrative expenses, which was primarily due to credit loss reserves on certain receivables, as well as results of our co-branded credit card programs prior to the integration into the loyalty program in the fourth quarter of 2025 recognized in other revenues and other direct costs.
Owned and leased segment revenues and Adjusted EBITDA .
Year Ended December 31,
Better / (Worse)
Currency Impact
Segment revenues (1), (2)
(1) See "—Results of Operations" for further discussion regarding the increase in owned and leased revenues.
(2) Includes $22 million and $23 million of intersegment revenues for the years ended December 31, 2025 and December 31, 2024, respectively.
Year Ended December 31,
Better / (Worse)
Owned and leased Adjusted EBITDA (1)
Pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA
Segment Adjusted EBITDA
(1) See "—Results of Operations" for further discussion regarding the increases in owned and leased revenues and owned and leased expenses.
Our pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA decreased during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the sale of our ownership interest in an unconsolidated hospitality venture in 2024 as well as a property undergoing a significant renovation.
Distribution segment revenues and Adjusted EBITDA.
Year Ended December 31,
Better / (Worse)
Distribution revenues (1)
Other revenues (1)
Segment revenues
(1) See "—Results of Operations" for further discussion regarding the decrease in distribution revenues and other revenues.
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Year Ended December 31,
Better / (Worse)
Segment Adjusted EBITDA
Excluding the impact of the UVC Transaction, Adjusted EBITDA decreased $26 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by distribution revenues and distribution expenses. See "—Results of Operations" for further discussion.
Liquidity and Capital Resources
Overview
We finance our business primarily with existing cash, short-term investments, and cash generated from our operations. As part of our long-term business strategy, we use net proceeds from dispositions to pay down debt as necessary to maintain our investment-grade profile; support new investment opportunities, including acquisitions; and return capital to our stockholders, when appropriate. We may also borrow cash under our revolving credit facility or from other third-party sources and raise funds by issuing debt or equity securities. We maintain a cash investment policy that emphasizes the preservation of capital.
During the year ended December 31, 2025, we acquired all of the issued and outstanding ordinary shares of Playa Hotels for $1,274 million, net of cash acquired, and repaid the outstanding balance of an assumed term loan for $1,078 million. The transaction was funded with a combination of proceeds from new debt, including a $1,700 million DDTL Facility and $1,000 million of senior notes. We repaid $1,700 million of borrowings on the DDTL Facility during the year ended December 31, 2025 and terminated the facility upon repayment. As required by the credit agreement, the net proceeds from the sale of the shares of the entities that own the Alua Portfolio and the sale of the Playa Hotels Portfolio were used to pay down the DDTL Facility. Upon completion, we successfully executed our commitment announced in February 2025, ahead of our expectation, to realize at least $2.0 billion of proceeds from asset sales by the end of 2027. Additionally, we repaid senior notes due 2025 at maturity for $460 million, inclusive of $10 million of accrued interest. We also issued $400 million of senior notes due 2035 and used the proceeds to redeem $400 million of senior notes due 2026 at a redemption price of $405 million, inclusive of $5 million of accrued interest. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 7 and Note 11 to our Consolidated Financial Statements" for additional information.
We may, from time to time, seek to retire or purchase our outstanding equity and/or debt securities through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan or an ASR transaction. Such repurchases or exchanges, if any, will depend on prevailing market conditions, restrictions in our existing or future financing arrangements, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. During the year ended December 31, 2025, we returned $350 million of capital to our stockholders through $293 million of share repurchases and $57 million of quarterly dividend payments. At December 31, 2025, we had approximately $678 million remaining under the share repurchase program. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 16 to our Consolidated Financial Statements."
We believe that our cash position, short-term investments, cash from operations, borrowing capacity under our revolving credit facility, and access to the capital markets will be adequate to meet all of our funding requirements and capital deployment objectives in both the short term and long term.
Recent Transactions Affecting our Liquidity and Capital Resources
During the years ended December 31, 2025 and December 31, 2024, various transactions impacted our liquidity. See "—Sources and Uses of Cash."
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Sources and Uses of Cash
Year Ended December 31,
Cash provided by (used in):
Operating activities
Investing activities
Financing activities
Effect of exchange rate changes on cash
Change in cash, cash equivalents, and restricted cash classified within assets held for sale
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash Flows from Operating Activities
Cash provided by operating activities decreased $254 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to cash paid for transaction and integration costs related to the Playa Hotels Acquisition and an increase in cash paid for interest and income taxes.
Cash Flows from Investing Activities
2025 Activity:
• We received $1,603 million of proceeds, net of cash disposed, transaction costs, and proration adjustments, from the sale of the Playa Hotels Portfolio.
• We received $244 million of net proceeds from the sale of marketable securities and short-term investments .
• We received approximately $72 million of proceeds, net of cash disposed and debt assumed by the buyer, from the sale of the shares of the entities that own the Alua Portfolio.
• We received $20 million of proceeds related to distributions from certain equity method investments and the redemption of held-to-maturity ("HTM") debt securities.
• We received $14 million of proceeds from financing receivables.
• We acquired all of the issued and outstanding ordinary shares of Playa Hotels for $1,274 million, net of cash acquired.
• We invested $220 million in capital expenditures (see "—Capital Expenditures").
• We invested $45 million in HTM debt securities.
• We contributed $37 million to unconsolidated hospitality ventures.
• We issued $16 million of financing receivables.
2024 Activity:
• We received $723 million of proceeds, net of cash disposed, transaction costs, and proration adjustments, from the sale of Hyatt Regency Orlando and an adjacent undeveloped land parcel.
• We received $244 million of proceeds, net of transaction costs and proration adjustments, from the sale of Park Hyatt Zurich.
• We received $226 million of proceeds, net of transaction costs and proration adjustments, from the sale of Hyatt Regency San Antonio Riverwalk.
• We received $173 million of proceeds, net of cash disposed, transaction costs, and proration adjustments, from the sale of the shares of entities that own Hyatt Regency Aruba Resort Spa and Casino.
• We received $62 million of proceeds related to distributions from certain equity method investments and the redemption of HTM debt securities.
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• We received $51 million of proceeds from financing receivables.
• We received $41 million of proceeds, net of cash disposed, from the UVC Transaction.
• We received $11 million of proceeds, net of transaction costs and proration adjustments, from the sale of Hyatt Regency O'Hare Chicago.
• We received $3 million of proceeds, net of transaction costs and proration adjustments, from the sale of Hyatt Regency Green Bay.
• We invested $437 million in net purchases of marketable securities and short-term investments .
• We completed the Bahia Principe Transaction for approximately $372 million, net of cash acquired.
• We invested $170 million in capital expenditures (see "—Capital Expenditures").
• We acquired 100% of the issued and outstanding equity interests of certain entities collectively doing business as Standard International for $148 million, net of cash acquired.
• We issued $136 million of financing receivables.
• We acquired the Alua Portfolio for approximately $61 million, net of cash acquired.
• We invested $53 million in HTM debt securities.
• We contributed $35 million to unconsolidated hospitality ventures.
• We acquired the Me and All Hotels brand name for $28 million, inclusive of transaction costs.
Cash Flows from Financing Activities
2025 Activity:
• We repaid $1,700 million of borrowings on the DDTL Facility using net proceeds from the sale of the shares of the entities that own the Alua Portfolio and the sale of the Playa Hotels Portfolio.
• We assumed Playa Hotels' existing term loan and repaid the outstanding balance for $1,078 million, inclusive of $3 million of accrued interest, on the acquisition date.
• We repaid senior notes due 2025 at maturity for $460 million, inclusive of $10 million of accrued interest.
• We redeemed senior notes due 2026 at a redemption price of $405 million, which included principal and $5 million of accrued interest.
• We repurchased 2,048,945 shares of Class A common stock for an aggregate purchase price of $293 million.
• We paid four quarterly $0.15 per share cash dividends on outstanding shares of Class A and Class B common stock totaling $57 million.
• We paid $27 million of withholding taxes for stock-based compensation.
• We borrowed $1,700 million on the DDTL Facility and received $1,694 million of proceeds, net of $6 million of issuance costs, which we used to finance the Playa Hotels Acquisition, repay certain indebtedness of Playa Hotels and its subsidiaries in connection with the acquisition, and pay related fees and expenses.
• We issued senior notes and received $1,386 million of net proceeds, after deducting $14 million of underwriting discounts and other offering expenses.
2024 Activity:
• We repurchased 7,992,256 shares of Class A and Class B common stock for an aggregate purchase price of $1,190 million.
• We repaid outstanding senior notes at maturity for $753 million, inclusive of $7 million of accrued interest.
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• We paid four quarterly $0.15 per share cash dividends on outstanding shares of Class A and Class B common stock totaling $60 million.
• We paid $43 million of withholding taxes for stock-based compensation.
• We issued senior notes and received $1,380 million of net proceeds, after deducting $20 million of underwriting discounts and other offering expenses.
• We borrowed approximately $44 million in conjunction with the sale of Park Hyatt Zurich.
We define net debt as total debt less the total of cash and cash equivalents and short-term investments. We consider net debt and its components to be an important indicator of liquidity and a guiding measure of capital structure strategy. Net debt is a non-GAAP measure and may not be computed the same as similarly titled measures used by other companies. The following table provides a summary of our debt-to-total capital ratios:
December 31, 2025
December 31, 2024
Total debt (1)
Stockholders' equity
Total capital
Total debt-to-total capital
Total debt (1)
Less: cash and cash equivalents and short-term investments (2)
Net debt
Net debt-to-total capital
(1) Excludes approximately $416 million and $370 million of our share of unconsolidated hospitality venture indebtedness at December 31, 2025 and December 31, 2024, respectively, substantially all of which is non-recourse to us and a portion of which we guarantee pursuant to separate agreements.
(2) Excludes $3 million of cash and cash equivalents reclassified to assets held for sale at December 31, 2024.
Capital Expenditures
We routinely make capital expenditures to enhance our business primarily through renovations at our owned properties, investments in technology, and other capital projects. We have been, and will continue to be, disciplined with respect to our capital spending, taking into account our cash flows from operations.
Year Ended December 31,
Total capital expenditures
Less: capital expenditures related to the Playa Hotels Portfolio
Capital expenditures, net of amounts related to the Playa Hotels Portfolio
Excluding cash paid related to the Playa Hotels Portfolio, capital expenditures decreased $22 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by net disposition activity in 2024 and decreased renovation spend at owned hotels.
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Senior Notes
The table below sets forth the outstanding principal balance of our various series of senior unsecured notes (collectively, the "Senior Notes") at December 31, 2025, as described in Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 11 to our Consolidated Financial Statements." Interest on the outstanding Senior Notes is payable semi-annually.
Outstanding principal amount
$600 million senior unsecured notes maturing in 2027—5.750%
$400 million senior unsecured notes maturing in 2028—4.375%
$500 million senior unsecured notes maturing in 2028—5.050%
$600 million senior unsecured notes maturing in 2029—5.250%
$450 million senior unsecured notes maturing in 2030—5.750%
$450 million senior unsecured notes maturing in 2031—5.375%
$500 million senior unsecured notes maturing in 2032—5.750%
$350 million senior unsecured notes maturing in 2034—5.500%
$400 million senior unsecured notes maturing in 2035—5.400%
Total Senior Notes
In the indenture that governs the Senior Notes, we agreed not to:
• create any liens on our principal properties, or on the capital stock or debt of our subsidiaries that own or lease principal properties, to secure debt without also effectively providing that the Senior Notes are secured equally and ratably with such debt for so long as such debt is so secured; or
• enter into any sale and leaseback transactions with respect to our principal properties.
These limitations are subject to significant exceptions.
The indenture also limits our ability to enter into mergers or consolidations or transfer all or substantially all of our assets unless certain conditions are satisfied.
If a change of control triggering event, as defined in the indenture governing the Senior Notes, occurs, we will be required to offer to purchase the Senior Notes at a price equal to 101% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase. We may also redeem some or all of the remaining Senior Notes at any time prior to their maturity at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption plus a make-whole amount, if any. The amount of any make-whole payment depends, in part, on the yield of U.S. Treasury securities with a comparable maturity to the Senior Notes at the date of redemption.
We are in compliance with all applicable covenants under the indenture governing our Senior Notes at December 31, 2025.
Revolving Credit Facility
On October 30, 2025, we entered into a credit agreement with a syndicate of lenders that provides for a $1.5 billion senior unsecured revolving credit facility (the "revolving credit facility") that matures in October 2030. The credit agreement refinanced and replaced in its entirety our credit agreement dated May 18, 2022 (the "prior revolving credit facility"). The revolving credit facility provides for the making of revolving loans to us in U.S. dollars and, subject to a sublimit of $250 million, certain other currencies, and the issuance of up to $300 million of letters of credit for our own account or for the account of our subsidiaries. We have the option during the term of the revolving credit facility to increase the revolving credit facility by an aggregate amount of up to an additional $1 billion provided that, among other things, new and/or existing lenders agree to provide commitments for the increased amount. We may prepay any outstanding aggregate principal amount, in whole or in part, at any time, subject to customary breakage costs and upon proper notice. The credit agreement contains customary affirmative, negative, and financial covenants; representations and warranties; and default provisions.
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Our revolving credit facility is intended to provide financing for working capital and general corporate purposes, including commercial paper backup and permitted investments and acquisitions. At December 31, 2025, we had no balance outstanding. At December 31, 2025, we had $3 million outstanding undrawn letters of credit issued under our revolving credit facility, and reduced availability thereunder. At December 31, 2025, we had $1,497 million of borrowing capacity available under our revolving credit facility, net of outstanding undrawn letters of credit. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 11 to our Consolidated Financial Statements."
Borrowings under our revolving credit facility bear interest, at our option, at either a reference rate plus a margin ranging from 0.775% to 1.250% per annum, or the alternative base rate plus a margin ranging from 0.000% to 0.250% per annum, in each case depending on our credit rating by any of S&P, Moody's, or Fitch or, in certain circumstances, our credit rating and leverage ratio. Reference rates refer to the term Secured Overnight Financing Rate ("Term SOFR"), the applicable foreign currency daily rate, or the applicable foreign currency term rate and may be at one, three, or six month tenors.
Our revolving credit facility provides for a facility fee ranging from 0.090% to 0.225% of the total commitments of the lenders under the revolving credit facility depending on our credit rating or, in certain circumstances, our credit rating and leverage ratio. The facility fee is charged regardless of the level of borrowings.
At December 31, 2025, the interest rate for a one month Term SOFR borrowing under our revolving credit facility would have been 4.738%, which represents Term SOFR of 3.688% plus the applicable margin of 1.050%.
We are also required to pay letter of credit fees with respect to each letter of credit equal to the applicable margin for Term SOFR loans on the face amount of each letter of credit. In addition, we must pay a fronting fee to the issuer of each letter of credit of 0.100% per annum on the face amount of such letter of credit.
The revolving credit facility contains a number of affirmative and restrictive covenants, including limitations on the ability to place liens on our direct or indirect subsidiaries' assets; to merge, consolidate, and dissolve; to sell assets; to engage in transactions with affiliates; to change our direct or indirect subsidiaries' fiscal year or organizational documents; to make restricted payments.
The revolving credit facility also contains a financial covenant that limits our maximum leverage, consisting of the ratio of Consolidated Adjusted Funded Debt to Consolidated EBITDA, each as defined in the revolving credit facility, to not more than 4.5 to 1. For a limited period of time following certain transactions, the required ratio is adjusted to not more than 5.5 to 1. The financial covenant is measured quarterly. Our outstanding Senior Notes do not contain a corresponding financial covenant or a requirement that we maintain certain financial ratios.
We are in compliance with all applicable covenants under the revolving credit facility at December 31, 2025.
Letters of Credit
We issue letters of credit either under our revolving credit facility or directly with financial institutions. We had $118 million in letters of credit issued directly with financial institutions outstanding at December 31, 2025. At December 31, 2025, these letters of credit, which mature on various dates through 2026, had weighted-average fees of approximately 92 basis points. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 15 to our Consolidated Financial Statements."
Surety and Other Bonds
Surety and other bonds issued on our behalf were $120 million at December 31, 2025 and are generally off-balance sheet arrangements. These primarily relate to our insurance programs, customer deposits associated with ALG Vacations, taxes, licenses, liens, and utilities for certain managed and franchised hotels. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 15 to our Consolidated Financial Statements."
Other Indebtedness and Future Debt Maturities
Excluding $4,239 million of Senior Notes, all other third-party indebtedness was $39 million, net of $34 million of unamortized discounts and deferred financing fees, at December 31, 2025.
At December 31, 2025, $6 million of our outstanding debt will mature within the next 12 months. We believe we will have adequate liquidity to repay or refinance our current debt obligations.
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Contractual Obligations
Our significant contractual obligations at December 31, 2025 include debt, lease obligations, contingent consideration arrangements, purchase obligations, and other commitments, primarily related to deferred compensation plan liabilities.
Our short-term and long-term debt obligations are discussed above and in Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 11 to our Consolidated Financial Statements," and our short-term and long-term lease obligations are discussed in Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 8 to our Consolidated Financial Statements."
Our commitments under contingent consideration arrangements are primarily anticipated to be paid in the long term based on the expected timing of achieving the contractual objectives and are discussed in Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 7 and Note 15 to our Consolidated Financial Statements."
Purchase obligations at December 31, 2025 were $6 million, which are primarily due in the short term. Our purchase obligations primarily consist of construction and renovation commitments at certain owned hotels.
Other commitments primarily consist of deferred compensation plan liabilities, with $4 million due in the short term and $615 million due in the long term. Our commitments exclude $562 million of long-term income taxes payable due to the uncertainty related to the timing of the reversal of those liabilities.
We enter into contracts with certain airlines for commercial air transportation provided by third-party air carriers and chartered air transportation provided by ALG Vacations. Obligations under these contracts are due in the short term and may be renegotiated based on customer demand.
Guarantee Commitments
We enter into performance guarantees with third-party owners related to certain managed hotels, which require us to guarantee payments to the owners if specified levels of operating profit are not achieved by their hotels. Under these performance guarantees, we may be required to fund up to $34 million within the next 12 months and up to $98 million thereafter. Through acquisitions, we acquired certain management and hotel services agreements with performance guarantees based on annual performance levels. Contract terms within certain management and hotel services agreements limit our exposure, and therefore, we are unable to reasonably estimate our maximum potential future payments under these guarantees.
We also enter into debt repayment and other guarantees with respect to certain unconsolidated hospitality ventures, hospitality venture partners, and managed or franchised hotels. Our debt repayment guarantee commitments include $43 million that expire within the next 12 months and $80 million that expire thereafter. C ertain of the underlying debt agreements have extension periods which are not reflected in these figures. With respect to certain of these guarantees, we have reimbursement agreements with our unconsolidated hospitality venture partners or the respective third-party owners or franchisees that reduce our maximum potential future payments and are not reflected above.
In addition, we provide indemnifications as a result of certain dispositions for liabilities incurred prior to sale. As part of the UVC Transaction, we agreed to guarantee up to $70 million of our hospitality venture partner's investment upon the occurrence of certain events in the long term. Additionally, we agreed to indemnify the unconsolidated hospitality venture, the primary obligor to the foreign taxing authorities, for obligations the entity may incur as a result of pre-existing uncertain tax positions. At December 31, 2025, the indemnification for open tax years had a maximum exposure of $79 million. Our exposure related to tax years expiring in the next 12 months and thereafter is $23 million and $56 million, respectively.
We agreed to indemnify the buyer in conjunction with the Tortuga sale for obligations the entities may incur as a result of certain tax matters as of the sale date. At December 31, 2025, the indemnification for open tax years had a maximum exposure of $45 million, which may be funded in the long term.
See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 15 to our Consolidated Financial Statements."
Investment Commitments
We are committed, under certain conditions, to lend, provide certain consideration to, or invest in various business ventures. At December 31, 2025, we expect to fund commitments of $231 million within the next 12 months and $456 million thereafter. See Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 15 to our Consolidated Financial Statements."
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Critical Accounting Policies and Estimates
Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures in our consolidated financial statements and accompanying footnotes (the "Notes").
A number of our accounting policies, which are described in Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 2 to our Consolidated Financial Statements," are critical due to the fact they involve a higher degree of judgment and estimates. Those accounting policies and other critical estimates are included below. As a result, these accounting policies could materially affect our financial position and results of operations. While we have used our best estimates based on the facts and circumstances available to us at the time, different estimates reasonably could have been used in the current period. In addition, changes in the accounting estimates that we use are reasonably likely to occur from period to period, which may have a material impact on the presentation of our financial condition and results of operations. Although we believe our estimates, assumptions, and judgments are reasonable, they are based on information presently available. Our estimates of projected results are based on historical data, internal estimates, and/or external sources and are developed as part of our routine, long-term planning process. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions. Management has discussed the development and selection of these critical accounting policies and estimates with the Audit Committee of the board of directors.
Loyalty Program Future Point Redemption Obligation and Revenue Recognition
We utilize third-party actuaries to assist with the valuation of the deferred revenue liability related to future point redemptions associated with the loyalty program. Changes in the estimates, including the anticipated timing of future point redemptions and an estimate of the breakage for loyalty points that will not be redeemed, could result in further material changes to our liability and the amount of revenues we recognize when redemptions occur.
At December 31, 2025, our total deferred revenue liability related to future point redemptions was $1,533 million . A 10% decrease in the breakage assumption would increase our deferred revenue liability related to future point redemptions by approx imately $90 million.
Equity Method Investments
We assess investments in unconsolidated hospitality ventures accounted for under the equity method for impairment quarterly. Determining whether or not there is an indication that a loss in value has occurred and whether a loss is deemed to be other than temporary requires judgment, and we consider our knowledge of the hospitality industry, historical experience, location of the underlying venture property, market conditions, and/or venture-specific information available at the time of our assessment. When there is an indication that a loss in value has occurred, we may evaluate the carrying value in comparison to the estimated fair value. We estimate the fair value using internally developed cash flow models, third-party appraisals, and, if appropriate, pending third-party offers. Changes to the significant inputs used to determine fair value, including projected cash flows, discount rates, and capitalization rates, could affect our evaluation.
Changes in economic and operating conditions impacting these estimates and judgments could result in impairments to our equity method investments in future periods. Historically, changes in estimates used in the impairment assessment process have not resulted in material impairment charges in subsequent periods.
Acquisitions
Assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree are recorded at fair value as of the acquisition date, which requires judgment. We use third-party valuation specialists to estimate the fair value of assets or businesses acquired using the income, cost, and/or market approaches. Valuation inputs include historical financial results, projected cash flows, discount rates, capitalization rates, royalty rates, current market conditions, likelihood of contract renewals, and comparable transactions. In business combinations, the fair value is allocated to tangible and intangible assets and liabilities, with any remaining value assigned to goodwill. In asset acquisitions, any difference between the consideration paid and the fair value of the assets acquired is allocated across the identified assets based on the relative fair value. Changes to the significant inputs used to determine fair value, including cash flow and revenue projections and discount rates, could affect the measurement and allocation of fair value.
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Contingent and Non-cash Consideration
Contingent consideration payable arising from acquisitions is recorded at fair value as a liability on the acquisition date and remeasured at each reporting date. Fair value is typically estimated using a Monte Carlo simulation. Changes to the significant inputs used to determine fair value, including discount rates, probabilities of achieving the contractual objectives, and/or timing of payments, could affect the fair value measurement upon acquisition and each reporting period thereafter.
We may be entitled to contingent consideration receivable as a result of dispositions. Non-cash consideration and contingent consideration receivables arising from sales of business and ownership interests in unconsolidated hospitality ventures are recorded at fair value as assets upon sale. Fair value is typically estimated using either a Monte Carlo simulation or a probability-based discounted cash flow approach. Contingent consideration receivables arising from asset dispositions are recorded as contract assets using the expected value method and are estimated using a Monte Carlo simulation to model the probability of possible outcomes. Changes to the significant inputs used to determine fair value or expected value, including the selection of probability weighting, discount rates, volatility, probabilities of achieving the contractual objectives, operating results, and/or timing of payments, could affect the measurement upon sale.
Goodwill and Indefinite-Lived Intangible Assets
We evaluate goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, using balances at October 1. Goodwill is evaluated at interim dates if triggering events occur, and indefinite-lived intangible assets are evaluated at interim dates if indicators of impairment exist.
Determining whether triggering events or impairment indicators exist requires judgment, and we consider our knowledge of the hospitality industry, historical experience, location of the property or properties, market conditions, and/or specific information available at the time of our assessment. The results of our analysis could vary from period to period depending on how our judgment is applied and the facts and circumstances available at the time of our analysis. We estimate the fair value of our goodwill reporting units and indefinite-lived intangible assets generally using income and/or market approaches, including the relief from royalty method. Changes to the significant inputs used to determine fair value, including projected cash flows, discount rates, capitalization rates, and market royalty rates, could affect the fair value of the reporting unit or the indefinite-lived intangible asset.
Historically, changes in estimates used in our valuations have not resulted in material impairment charges in subsequent periods. At December 31, 2025, for one of our reporting units, changes in certain assumptions and estimates, including the underlying cash flows, discount rate, or capitalization rate, could result in a material impairment charge.
Excluding assets recently impaired or discussed above, changes in our assumptions and estimates would not result in a material impairment charge for our remaining goodwill reporting units or indefinite-lived intangible assets. In periods close to an acquisition, we expect fair value to approximate carrying value and do not consider this to be indicative of an impairment risk, absent other factors.
Property and Equipment, Operating Lease ROU Assets, and Definite-Lived Intangible Assets
We evaluate long-lived assets for impairment quarterly, and when events or circumstances indicate the carrying value may not be recoverable, we evaluate the net book value of the assets by comparing it to the projected undiscounted cash flows of the assets. Determining whether indicators of impairment exist requires judgment, and we consider our knowledge of the hospitality industry, historical experience, location of the property, market conditions, and/or property-specific information available at the time of our assessment. The results of our analysis could vary from period to period depending on how our judgment is applied and the facts and circumstances available at the time of our analysis. When an indicator of impairment exists, judgment is required in determining the assumptions and estimates to use within the recoverability analysis and in calculating the fair value of the asset or asset group, if applicable.
Changes in economic and operating conditions impacting these estimates and judgments could result in impairments to our long-lived assets in future periods. Historically, changes in estimates used in our impairment assessments have not resulted in material impairment charges in subsequent periods as a result of changes made to those estimates.
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Guarantees
We enter into performance, debt repayment, and other guarantees as well as provide indemnifications related to certain dispositions for liabilities incurred prior to sale. We record guarantee liabilities at fair value at inception. Fair value is typically estimated using either scenario-based weighting, which utilizes a Monte Carlo simulation or a probability-based weighting approach to model the probability of possible outcomes, or the with and without method. The valuation methodology includes assumptions and judgments regarding probability weighting, discount rates, volatility, hotel operating results, hotel property sales prices, and expected timing of cash flows. Our assumptions are primarily based on our knowledge of the hospitality industry, market conditions, location of the property, contractual obligations, and/or likelihood of incurring costs related to claims for which we indemnify third parties.
Income Taxes
We are subject to examination by the IRS or other tax authorities in the federal, state, local, and foreign taxing jurisdictions that we operate in. We evaluate tax positions taken or expected to be taken on a tax return to determine whether they are more likely than not to be sustained upon examination by taxing authorities before recognizing the related tax benefits. Our evaluation primarily includes comparable or related interpretations and precedents, applicability of tax laws and statutes, and expected outcome of proceedings or negotiations with taxing and legal authorities.
We record a valuation allowance to reduce our deferred tax assets if it is more likely than not that some or all of the assets will not be realizable. This assessment requires judgment and considers all positive and negative evidence available, including cumulative historical pre-tax losses. Assumptions, judgment, and the use of estimates are required when estimating future income and scheduling the reversal of deferred tax assets and liabilities.
