What was the total amount of contract liabilities for Caption By Hyatt as of December 31, 2023?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
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(1) The change from December 31, 2023 is due to balances written off to gains (losses) on sales of real estate and other on our consolidated statements of income during the year ended December 31, 2024 as a result of the UVC Transaction (see Note 4).
Revenue recognized during the years ended December 31, 2024 and December 31, 2023 included in the contract liabilities balance at the beginning of each year was $1,208 million and $1,224 million, respectively. This revenue primarily relates to distribution and destination management services and the loyalty program.
Revenue Allocated to Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognize
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, revenue recognized during the year ended December 31, 2023, which was included in the contract liabilities balance at the beginning of the year, was $1,224 million. This revenue is primarily associated with distribution and destination management services, as well as the loyalty program.
Contract liabilities represent revenue that Caption By Hyatt has received but not yet earned. This typically occurs when customers pay in advance for services or products that will be delivered in the future. For a prospective Caption By Hyatt franchisee, understanding the nature and extent of these liabilities is crucial because it reflects the financial obligations Caption By Hyatt has to its customers for services yet to be rendered.
The document also mentions that revenue allocated to remaining performance obligations, which includes deferred revenue and amounts to be invoiced in the future, was approximately $125 million as of December 31, 2024. About 10% of this amount is expected to be recognized within the next 12 months, with the remainder recognized thereafter. This provides insight into the future revenue stream that Caption By Hyatt anticipates based on existing contracts.
It is important for potential franchisees to review these figures in the context of Caption By Hyatt's overall financial health and business model. Understanding how revenue is recognized and how contract liabilities are managed can offer a clearer picture of the company's financial stability and future prospects.