Hyatt (H) Boosts Its Hotel Portfolio With New Collaboration
To expand its footprint across Europe, Hyatt Hotels Corporation’s H affiliate recently entered into a franchise agreement with Lindner Hotels AG. The agreement paves the path for expansion to 15 new markets and an estimated addition of 5,500 rooms.
The company stated that more than 30 Lindner properties (across seven European countries) will join the Hyatt brand portfolio with the majority transitioning to the JdV by Hyatt brand. Through the partnership, the company emphasizes on extending distribution in destinations such as Dusseldorf, Frankfurt and Hamburg.
Mark Hoplamazian, president and chief executive officer, Hyatt, stated, “The addition of Lindner’s desirable hotel portfolio will substantially grow Hyatt’s brand footprint in Germany and bring our guests and ultimately our World of Hyatt members to a variety of new destinations across Europe including Kiel, Leipzig, Sylt, Bratislava and Interlaken.”
Increased Focus on Expansion
Hyatt is also trying to expand its presence worldwide and has expansion plans for Asia-Pacific, Europe, Africa, the Middle East and Latin America. Expansion in these markets should help the company gain market share in the hospitality industry, boosting its business.
Recently, Hyatt announced the opening of its luxury hotel, Thompson Madrid, in Spain. This marks the first Thompson Hotels branded property in the region and the third Hyatt-branded hotel across Europe. The new hotel will join the likes of Hyatt Centric Gran Via Madrid and Hyatt Regency Hesperia Madrid.
The company continues to expand its presence to drive growth. During the second quarter of 2022, 28 new hotels (or 5,510 rooms) joined Hyatt's system. As of Jun 30, 2022, the company executed management or franchise contracts for approximately 550 hotels (or 113,000 rooms). It is optimistic about full-service growth opportunities, comprising both newbuilds and conversions globally. In 2022, the company anticipates unit growth to increase at approximately 6% on a net-room basis.
Price Performance
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Coming to price performance, shares of the company have declined 0.2% in the past year compared with the industry’s 18.2% fall. The company is benefiting from solid leisure transient demand, integration of Apple Leisure Group and asset disposition commitment. Sequential improvements in group travel and business transient demand bode well. As people return to the office, travel restrictions are eased and more cross-border travel resumes, the company remains optimistic about the recovery of business transient and its continued momentum over the back half of the year. Earnings estimates for 2022 have increased in the past 60 days, depicting analysts’ optimism regarding the stock’s growth potential.
Zacks Rank & Other Key Picks
Hyatt currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are Marriott Vacations Worldwide Corporation VAC, InterContinental Hotels Group PLC IHG and Playa Hotels & Resorts N.V. PLYA.
Marriott Vacations sports a Zacks Rank #1. VAC has a trailing four-quarter earnings surprise of 13.9%, on average. The stock has declined 17.9% in the past year.
The Zacks Consensus Estimate for VAC’s current financial year sales and earnings per share (EPS) indicates an increase of 19.7% and 131.4%, respectively, from the year-ago period’s reported levels.
InterContinental Hotels sports a Zacks Rank #1. IHG has a long-term earnings growth of 32.7%. The stock has declined 25.6% in the past year.
The Zacks Consensus Estimate for IHG’s current financial year sales and EPS indicates growth of 21.7% and 88.4%, respectively, from the year-ago period’s reported levels.
Playa Hotels carries a Zacks Rank #2. PLYA has a trailing four-quarter earnings surprise of negative 8.8%, on average. The stock has declined 35.9% in the past year.
The Zacks Consensus Estimate for PLYA’s current financial year sales and EPS indicates growth of 54.7% and 204.2%, respectively, from the year-ago period’s reported levels.
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