From where does the Owned and Leased segment of Caption By Hyatt derive its earnings?

According to Caption By Hyatt's 2025 Franchise Disclosure Document, the Owned and Leased segment generates its earnings primarily from hotel properties that Caption By Hyatt owns or leases. These properties are mainly located in the United States, but also include some international locations. The earnings reported for this segment also include Caption By Hyatt's share of Adjusted EBITDA from unconsolidated hospitality ventures, based on the company's ownership percentage in each venture. Adjusted EBITDA factors in intercompany management fee expenses paid to the Management and Franchising segment, which are then eliminated during consolidation. Additionally, intersegment revenues, specifically promotional award redemptions earned by the Owned and Leased hotels related to co-branded credit card programs, are also eliminated during consolidation.

For a prospective Caption By Hyatt franchisee, this means that the financial performance of the Owned and Leased segment is closely tied to the direct operation of hotels under the Caption By Hyatt brand. Unlike the Management and Franchising segment, which earns fees from various sources including franchising and management agreements, the Owned and Leased segment relies on revenue from room rentals and services provided directly to guests at its properties. The inclusion of Adjusted EBITDA from unconsolidated ventures indicates that Caption By Hyatt also participates in joint ventures or partnerships related to hotel properties, further contributing to the segment's earnings.

It's important to note that the elimination of intercompany transactions, such as management fees and promotional award redemptions, ensures that the segment's financial reporting accurately reflects its performance without double-counting revenues or expenses. This provides a clearer picture of the segment's profitability and contribution to the overall financial health of Caption By Hyatt. Franchisees should understand these segment dynamics to appreciate how different parts of the company contribute to the brand's overall success and financial stability.