Hyatt Hotels Corporation’s (H - Free Report) The Unbound Collection by Hyatt brand offers a portfolio of upper-upscale and luxury build hotels, boutique properties, and resorts. The brand, which is swiftly gaining momentum, recently marked its entry in Turkey with the opening of a 45-roomed boutique hotel called Nish Palas Istanbul. Featuring the city’s historic and cultural attributes, the hotel, like all other Hyatt hotels, will provide guests with high-class experiences.
The recent addition of the hotel is in line with an essential aspect of Hyatt’s riveting growth potential that focuses on its strong brand presence and continual expansion strategies. Also, shares of Hyatt have rallied 39% in the past year, outperforming the industry’s growth of 23.5%.
Market Share Expansion, Top-Line Growth
Hyatt’s continuous efforts toward expanding its brands globally should help it increase its market share. Hyatt is focused on expanding its presence worldwide and capitalizing on demand for hotels in profitable but relatively untapped international markets. In fact, other than Europe and Asia Pacific, the company also has expansion plans for Africa, the Middle East and Latin America.
Notably, courtesy of its aggressive expansion efforts, the company’s hotel opening agreements have continually outpaced its actual openings and this trend is expected to continue in the near future as well. The company has experienced net room growth between 6% and 7% for 10 consecutive quarters. In fact, for 2018, the company expects to grow units, on a net rooms basis, by roughly 6-6.5%, reflecting 60 new hotel openings.
Further, we expect the recent launch to boost Hyatt’s Owned and Leased Hotels revenues. The performance of the segment was slightly weak in the last reported quarter. Revenues were down 2.5% year over year. However, comparable Owned and Leased hotels RevPAR increased 5.4% from the prior-year quarter.
We believe that by expanding its brands globally, Hyatt is trying to fend off competition from the likes of Marriott (MAR - Free Report) , Wyndham and Hilton (HLT - Free Report) . As it is, the hotel industry is highly competitive, as major hospitality chains with their 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. Unless this Zacks Rank #3 (Hold) company counters these competitions with appropriate strategies, it may lose out on market share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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