Hyatt Hotels Corporation (H - Free Report) recently announced the launch of Hyatt Place Hyderabad/Banjara Hills — the first Hyatt Place hotel in Hyderabad, India. This is the third Hyatt hotel in the city of Hyderabad after Park Hyatt Hyderabad and Hyatt Hyderabad, Gachibowli.
Developed by BGR Mining & Infra Ltd, the 147-room hotel is strategically located in the center of the city, with business and sightseeing hubs in the vicinity.
We observe that shares of Hyatt have rallied 42.4% in the past six months, outperforming the industry’s 30.8% growth.
Target: Middle Class & Local Business Travelers
The launch ispart of Hyatt’s efforts to expand the Hyatt Place brand globally.
The brand, which falls under Hyatt’s fast-growing select service category, has immense growth potential in India, China and the Middle East. This is because these regions have a growing middle class population and a significant number of local business travelers whose demand match with Hyatt’s select range of services at affordable prices. Notably, these select services attract more guests than full service hotels in India. The hotel is expected to cater to the need of a wide range of customers in the country.
Hyatt is focused on growing its select-service presence via third-party construction of franchised properties, conversion and renovation of existing non-Hyatt properties, and in certain cases, participation in the development of new managed properties in developing countries.
The launch also underscores Hyatt’s consistent efforts to expand worldwide and capitalize on demand for hotels in lucrative international markets. Ongoing expansion should help the company gain market share in the global hospitality industry, thus boosting its business.
Hyatt is known for its strong brand portfolio. By the end of the last reported quarter, the company's portfolio included 739 properties in 57 countries. The company aims to differentiate its brands by providing a distinct experience for different travelers and focusing on gaining global traction on solid brand presence along with innovative personalized services.
We expect the recent launch to boost Hyatt’s Owned and Leased Hotels revenues. The performance of the segment was particularly weak in the last reported quarter. Revenues were down 2.7% year over year (down 3.2% at constant currency). Comparable Owned and Leased hotels RevPAR declined 0.5% (down 1.1% at constant currency).
Zacks Rank & Other Stocks to Consider
Hyatt sports a Zacks Rank #1 (Strong Buy).
A few other top-ranked stocks in the hotel space include InterContinental Hotels Group PLC (IHG - Free Report) , Choice Hotels International, Inc. (CHH - Free Report) and Hilton Worldwide Holdings Inc. (HLT - Free Report) . While InterContinental Hotels flaunts a Zacks Rank #1, Choice Hotels and Hilton carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hilton, Choice Hotels and InterContinental’s 2018 earnings are expected to rise 27.7%, 14.6% and 37.1%, respectively.
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