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Hyatt (H) Outpaces Industry in the Past Year: More Room to Run?
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Hyatt Hotels Corporation (H - Free Report) is poised to benefit from expansion initiatives, hotel acquisitions and digital efforts. Also, a focus on the loyalty program bodes well.
Shares of Hyatt have rallied 42.6% in the past year compared with the industry’s 17.4% growth. An upward revision in earnings estimates for 2023 reflects analysts’ optimism regarding the company’s growth potential. In the past 60 days, the Zacks Consensus Estimate for 2023 earnings has moved up 1.5% to $2.65 per share.
Growth Catalysts
Hyatt continues to expand its presence to boost growth. In the first quarter of 2023, leisure-transient revenues grew 20% year over year and 24% above the 2019 levels on a comparable system-wide basis. The company is optimistic that demand will remain robust for the remainder of 2023.
Image Source: Zacks Investment Research
During the quarter, Hyatt announced openings in high-barrier-to-entry markets, including Bordeaux France and Davos Switzerland. Also, it reported openings in cities, including London, Mexico City and Austin, TX.
An emphasis on acquisitions bodes well for Hyatt. On Feb 2, 2023, H acquired Dream Hotel Group. Valued at approximately $125 million, the acquisition adds 12 lifestyle hotels (or approximately 1,700 rooms) to the Hyatt portfolio. The agreement also includes an additional 24 signed long-term management agreements for hotels expected to open in the future. The initiative paves a path to boost Hyatt's lifestyle room count (by more than 10%) and expand its presence in New York City by 30%.
Hyatt recently announced the acquisition of the asset-light Mr & Mrs Smith platform for an enterprise value of £53 million. The initiative paves the path for strengthening distribution capabilities, particularly across Europe. The acquisition facilitates the addition of approximately 1500 hotels to its portfolio. The acquisition will extend Hyatt’s brand footprint into 20 new markets, including Fiji, Croatia, Iceland and Anguilla.
Meanwhile, the company has been focusing on its loyalty program for enhanced guest engagement. The reward program offers access to millions of urban renters, thereby facilitating them with global points through rents. Given the best-in-class loyalty program and digital platform, the company’s portfolio of brands is resonating well. H stated that revenues from co-brand credit cards improved significantly from the 2019 levels.
The solid RevPAR (revenue per available room) performance due to a rise in leisure-transient demand and improvements in business-transient demand has been aiding the company. In the first quarter of 2023, system-wide comparable RevPAR increased 43% year over year due to an increase in occupancy and the average daily rate.
Also, RevPAR was up 6% from the 2019 levels. The upside was primarily backed by strong leisure-transient trends and improving business activity. The company witnessed solid RevPAR gains in Europe, China, the Americas and the Caribbean market region due to strong leisure demand.
Given the continued strength of leisure travel demand, a favorable pricing environment and airlift activities, the company is optimistic about continued growth in demand through the first quarter of 2023. Hyatt anticipates system-wide 2023 RevPAR to increase 12-16% from the 2022 levels.
Headwinds
The hotel industry is highly competitive as major hospitality chains with well-established and recognized brands are continuously expanding their global presence. Hyatt is continuously facing intense competition from both large hotel chains and smaller independent local hospitality providers.
Zacks Rank & Key Picks
Hyatt currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Royal Caribbean Cruises Ltd. (RCL - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 138.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Royal Caribbean Cruises’ 2023 sales and EPS indicates a rise of 48.5% and 162.8%, respectively, from the year-ago period’s levels.
Trip.com Group Limited (TCOM - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 63.9% in the past year.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS implies an increase of 102.2% and 334.5%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. (SKX - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 18.8%, on average. Shares of SKX have increased 40% in the past year.
The Zacks Consensus Estimate for Skechers U.S.A.’s 2023 sales and EPS suggests a rise of 7.8% and 31.9%, respectively, from the year-ago period’s levels.
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Hyatt (H) Outpaces Industry in the Past Year: More Room to Run?
Hyatt Hotels Corporation (H - Free Report) is poised to benefit from expansion initiatives, hotel acquisitions and digital efforts. Also, a focus on the loyalty program bodes well.
Shares of Hyatt have rallied 42.6% in the past year compared with the industry’s 17.4% growth. An upward revision in earnings estimates for 2023 reflects analysts’ optimism regarding the company’s growth potential. In the past 60 days, the Zacks Consensus Estimate for 2023 earnings has moved up 1.5% to $2.65 per share.
Growth Catalysts
Hyatt continues to expand its presence to boost growth. In the first quarter of 2023, leisure-transient revenues grew 20% year over year and 24% above the 2019 levels on a comparable system-wide basis. The company is optimistic that demand will remain robust for the remainder of 2023.
Image Source: Zacks Investment Research
During the quarter, Hyatt announced openings in high-barrier-to-entry markets, including Bordeaux France and Davos Switzerland. Also, it reported openings in cities, including London, Mexico City and Austin, TX.
An emphasis on acquisitions bodes well for Hyatt. On Feb 2, 2023, H acquired Dream Hotel Group. Valued at approximately $125 million, the acquisition adds 12 lifestyle hotels (or approximately 1,700 rooms) to the Hyatt portfolio. The agreement also includes an additional 24 signed long-term management agreements for hotels expected to open in the future. The initiative paves a path to boost Hyatt's lifestyle room count (by more than 10%) and expand its presence in New York City by 30%.
Hyatt recently announced the acquisition of the asset-light Mr & Mrs Smith platform for an enterprise value of £53 million. The initiative paves the path for strengthening distribution capabilities, particularly across Europe. The acquisition facilitates the addition of approximately 1500 hotels to its portfolio. The acquisition will extend Hyatt’s brand footprint into 20 new markets, including Fiji, Croatia, Iceland and Anguilla.
Meanwhile, the company has been focusing on its loyalty program for enhanced guest engagement. The reward program offers access to millions of urban renters, thereby facilitating them with global points through rents. Given the best-in-class loyalty program and digital platform, the company’s portfolio of brands is resonating well. H stated that revenues from co-brand credit cards improved significantly from the 2019 levels.
The solid RevPAR (revenue per available room) performance due to a rise in leisure-transient demand and improvements in business-transient demand has been aiding the company. In the first quarter of 2023, system-wide comparable RevPAR increased 43% year over year due to an increase in occupancy and the average daily rate.
Also, RevPAR was up 6% from the 2019 levels. The upside was primarily backed by strong leisure-transient trends and improving business activity. The company witnessed solid RevPAR gains in Europe, China, the Americas and the Caribbean market region due to strong leisure demand.
Given the continued strength of leisure travel demand, a favorable pricing environment and airlift activities, the company is optimistic about continued growth in demand through the first quarter of 2023. Hyatt anticipates system-wide 2023 RevPAR to increase 12-16% from the 2022 levels.
Headwinds
The hotel industry is highly competitive as major hospitality chains with well-established and recognized brands are continuously expanding their global presence. Hyatt is continuously facing intense competition from both large hotel chains and smaller independent local hospitality providers.
Zacks Rank & Key Picks
Hyatt currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Royal Caribbean Cruises Ltd. (RCL - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 138.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Royal Caribbean Cruises’ 2023 sales and EPS indicates a rise of 48.5% and 162.8%, respectively, from the year-ago period’s levels.
Trip.com Group Limited (TCOM - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 63.9% in the past year.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS implies an increase of 102.2% and 334.5%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. (SKX - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 18.8%, on average. Shares of SKX have increased 40% in the past year.
The Zacks Consensus Estimate for Skechers U.S.A.’s 2023 sales and EPS suggests a rise of 7.8% and 31.9%, respectively, from the year-ago period’s levels.