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Hyatt (H) Stock on Fire: Outpaces Industry in The Past Year
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Hyatt Hotels Corporation (H - Free Report) is benefitting from solid leisure transient demand, integration of Apple Leisure Group and new hotel openings. Improvements in group travel and business transient demand have been driving sales in the last few quarters.
Shares of Hyatt have surged 23.7% in the past year against the industry’s decline of 3.9%. The price performance was backed by a solid earnings surprise history. Hyatt’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Earnings estimates for full-year 2023 have moved up 42.1% in the past 30 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy). This indicates robust fundamentals and expectations of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Major Growth Drivers
Hyatt continues to witness robust recovery during second-quarter 2022. The upside can be primarily attributed to a rise in leisure transient demand, easing travel restrictions and ramped-up airline capacity. During the second quarter of 2022, leisure transient revenue reached 19% above 2019 levels on a comparable system-wide basis. Given the easing of travel restrictions in the Asia Pacific region and a rebound in leisure travel, the company is optimistic about continued demand growth for the remaining of 2022.
Image Source: Zacks Investment Research
Meanwhile, sequential improvements in group travel and business transient demand have been aiding the company’s performance. The company stated that system-wide group room revenues, which were down 14% (from 2019 levels) in April 2022, improved to being down 7% (from 2019 levels) in June 2022. During the second quarter of 2022, the company witnessed a rise in group bookings at its Americas full-service managed hotels on a year-over-year basis. 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. This and strength in short-term bookings coupled with strong food and beverage spending are likely to have supported the recovery process in the upcoming periods.
Increased focus on the integration of Apple Leisure Group Bode well. During the second quarter of 2022, Apple Leisure Group, Vacations business improved profitability and margins through strong business and technology optimization. During the second quarter, net package RevPAR for comparable ALG resorts in the Americas was up 17% from 2019 levels. Solid demand for leisure destinations, increased airlift capacity and a favorable pricing environment added to the upside. During the second quarter, the ALG segment contributed $355 million to the company’s total revenues. Given the emphasis on distribution capabilities with an end-to-end booking process, coupled with strong operational execution, an integrated experience (with AMR and UVC program) and destination management services, the company is optimistic about ALG’s performance in 2022.
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 had executed management or franchise contracts for approximately 550 hotels (or 113,000 rooms). For 2022, the company anticipates unit growth to increase approximately 6% on a net-room basis.
Marriott Vacations sports a Zacks Rank #1. VAC has a trailing four-quarter earnings surprise of 13.9%, on average. The stock has declined 8.2% in the past year.
The Zacks Consensus Estimate for VAC’s current financial year sales and EPS indicates an increase of 19.7% and 131.4%, respectively, from the year-ago period’s reported levels.
Marriott carries a Zacks Rank #2. MAR has a trailing four-quarter earnings surprise of 18.6%, on average. The stock has increased 13.9% in the past year.
The Zacks Consensus Estimate for MAR’s current financial year sales and EPS indicates growth of 46.7% and 102.8%, respectively, from the year-ago period’s reported levels.
Choice Hotels carries a Zacks Rank #2. CHH has a trailing four-quarter earnings surprise of 11.2%, on average. The stock has declined 9.5% in the past year.
The Zacks Consensus Estimate for CHH’s current financial year sales and EPS indicates growth of 21.9% and 19.6%, respectively, from the year-ago period’s reported levels.
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Hyatt (H) Stock on Fire: Outpaces Industry in The Past Year
Hyatt Hotels Corporation (H - Free Report) is benefitting from solid leisure transient demand, integration of Apple Leisure Group and new hotel openings. Improvements in group travel and business transient demand have been driving sales in the last few quarters.
Shares of Hyatt have surged 23.7% in the past year against the industry’s decline of 3.9%. The price performance was backed by a solid earnings surprise history. Hyatt’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Earnings estimates for full-year 2023 have moved up 42.1% in the past 30 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy). This indicates robust fundamentals and expectations of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Major Growth Drivers
Hyatt continues to witness robust recovery during second-quarter 2022. The upside can be primarily attributed to a rise in leisure transient demand, easing travel restrictions and ramped-up airline capacity. During the second quarter of 2022, leisure transient revenue reached 19% above 2019 levels on a comparable system-wide basis. Given the easing of travel restrictions in the Asia Pacific region and a rebound in leisure travel, the company is optimistic about continued demand growth for the remaining of 2022.
Image Source: Zacks Investment Research
Meanwhile, sequential improvements in group travel and business transient demand have been aiding the company’s performance. The company stated that system-wide group room revenues, which were down 14% (from 2019 levels) in April 2022, improved to being down 7% (from 2019 levels) in June 2022. During the second quarter of 2022, the company witnessed a rise in group bookings at its Americas full-service managed hotels on a year-over-year basis. 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. This and strength in short-term bookings coupled with strong food and beverage spending are likely to have supported the recovery process in the upcoming periods.
Increased focus on the integration of Apple Leisure Group Bode well. During the second quarter of 2022, Apple Leisure Group, Vacations business improved profitability and margins through strong business and technology optimization. During the second quarter, net package RevPAR for comparable ALG resorts in the Americas was up 17% from 2019 levels. Solid demand for leisure destinations, increased airlift capacity and a favorable pricing environment added to the upside. During the second quarter, the ALG segment contributed $355 million to the company’s total revenues. Given the emphasis on distribution capabilities with an end-to-end booking process, coupled with strong operational execution, an integrated experience (with AMR and UVC program) and destination management services, the company is optimistic about ALG’s performance in 2022.
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 had executed management or franchise contracts for approximately 550 hotels (or 113,000 rooms). For 2022, the company anticipates unit growth to increase approximately 6% on a net-room basis.
Other Key Picks
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are Marriott Vacations Worldwide Corporation (VAC - Free Report) , Marriott International, Inc. (MAR - Free Report) and Choice Hotels International, Inc. (CHH - Free Report) .
Marriott Vacations sports a Zacks Rank #1. VAC has a trailing four-quarter earnings surprise of 13.9%, on average. The stock has declined 8.2% in the past year.
The Zacks Consensus Estimate for VAC’s current financial year sales and EPS indicates an increase of 19.7% and 131.4%, respectively, from the year-ago period’s reported levels.
Marriott carries a Zacks Rank #2. MAR has a trailing four-quarter earnings surprise of 18.6%, on average. The stock has increased 13.9% in the past year.
The Zacks Consensus Estimate for MAR’s current financial year sales and EPS indicates growth of 46.7% and 102.8%, respectively, from the year-ago period’s reported levels.
Choice Hotels carries a Zacks Rank #2. CHH has a trailing four-quarter earnings surprise of 11.2%, on average. The stock has declined 9.5% in the past year.
The Zacks Consensus Estimate for CHH’s current financial year sales and EPS indicates growth of 21.9% and 19.6%, respectively, from the year-ago period’s reported levels.