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An affiliate of Chicago, Illinois-based Hyatt Hotels Corp. (
- Snapshot Report
recently entered into a management agreement with Range Developments for developing a hotel under the Park Hyatt brand in the island of St. Kitts in the Caribbean West Indies. The new hotel named Park Hyatt St. Kitts is scheduled to open in 2015.
St. Kitts is an island bordering the Caribbean Sea on its western side and Atlantic Ocean on the eastern side. The island, which is one of the most popular holiday locations in the Caribbean, boasts world class resorts and beaches and offers all types of water sports activities like diving, snorkeling, fishing, yachting, etc.
Range Developments is an operational arm of Range Holdings Group. Range Developments engages in developing high class luxury resorts in splendid locations. The company is developing the hotel in a 2,500 acre area called Christophe Harbour, located on the southeast peninsula of St. Kitts. Christophe Harbour is presently under construction and will comprise world class amenities signifying the natural heritage of Caribbean.
Park Hyatt is a premium luxury brand of Hyatt Hotels and offers world class experience to both business and leisure travelers. Strategically located in Banana Bay, Park Hyatt St. Kitts will comprise 200 guestrooms and 50 Park Hyatt-branded residential condominiums.
The hotel will be in close proximity to the capital of St. Kitts-Basseterre, Bradshaw International Airport, Port Zante cruise terminal and locations of financial importance like the Caribbean Central Bank and Caribbean Securities Exchange. The hotel will cater to both business and leisure travelers.
Owing to the saturation in the U.S. market, major hoteliers are exploring growth opportunities abroad. Some international markets offer greater potential based on their higher pace of economic growth. The strong economic growth is driving hotel expansion in the Caribbean and Latin America, topping the high rate of inflation.
In 2011, RevPAR for the comparable system-wide properties increased 9.9 percentage points year over year in the Caribbean and Latin America. The stellar performance in this region is expected to continue going forward.
All these factors testify to Hyatt Hotels' intention to own one of the largest hotel development pipelines in Caribbean. Hyatt hotels currently has three hotels in the Caribbean- Hyatt Regency Curacao Golf Resort, Spa and Marina, Hyatt Regency Trinidad and Hyatt Regency Aruba Resort and Casino.
Moreover, apart from the Park Hyatt St. Kitts, the company has four hotels in its pipeline in the Caribbean -- Hyatt Place Bayamon and El Tropical Casino, Park Hyatt Bermuda, Andaz Turks and Caicos and Grand Hyatt Baha Mar.
On the flipside, the company should be wary of its competitors, as they too are in expansion mode. Marriott International Inc. ( MAR - Analyst Report ) recently revealed its intention to double its presence in the Caribbean and Latin America by 2017. Several other major hoteliers like InterContinental Hotels Group ( IHG - Snapshot Report ) and Starwood Hotels & Resorts Worldwide Inc. ( HOT - Analyst Report ) are also poised to beef up their portfolio in that region.
Hyatt Hotels, a leading global hospitality company, owns, develops, manages and franchises Hyatt-branded hotels, resorts, residential and vacation ownership properties throughout the world. The company operates under the brands Hyatt, Park Hyatt, Andaz, Grand Hyatt, Hyatt Regency, Hyatt Place, Hyatt House, Hyatt Residences and Hyatt Vacation Club. As of March 31, 2012, Hyatt Hotels' portfolio consisted of 488 properties in 45 countries worldwide.
Hyatt Hotels will likely release its second quarter 2012 earnings on August 1, 2012. The Zacks Consensus Estimate for the second quarter is pegged at 23 cents per share. We presently have a long-term Neutral recommendation on the stock. Also, it retains a Zacks #3 Rank (short-term Hold rating).
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