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Hyatt Looks to Expand, Opens First Luxury Hotel in Bogota

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Hyatt Hotels Corporation (H - Free Report) , which banks on strong brand presence and continual expansion, has announced the opening of Grand Hyatt Bogota, a 372-roomed luxury hotel in Colombia. The property marks Hyatt’s first hotel in the Colombian capital and also the first in the state. The property is in close proximity to the El Dorado International Airport and Bolívar Square.

The move is in line with Hyatt’s efforts to foray into international markets and strengthen its brand name. Driven by global brand presence, shares of Hyatt have gained 32.8% in the past year, outperforming the industry’s collective growth of 4.9%.

Expansion Strategies in Place

Hyatt’s continuous efforts to expand its brands globally help increase market share in the hospitality industry, thereby boosting business operations. This enhances its portfolio and prospects in terms of revenue generation and profitability.

The company is relentlessly focusing on expansions to capture demand in international market. To this end, it recently announced the opening of a hotel in Northwest Shanghai.

 


 

Notably, Hyatt plans to expand into diverse international markets, including Australia, Brazil, Germany, United Kingdom and Indonesia. The company’s new signings across its brands globally have consistently outpaced its openings and this trend is expected to continue in 2018.

In second-quarter 2018, Hyatt registered net room growth of 7.4% on a year-over-year basis, which marked the 13th successive quarter of growth above 6%. The company added 17 hotels to its portfolio in the quarter and its development pipeline grew roughly 10% from the prior-year quarter. For 2018, the company expects to grow units on a net room basis by roughly 6-6.5%, reflecting 60 hotel openings.

Our Take

We expect the recent launch to boost Hyatt’s Owned and Leased Hotels revenues. Although the performance of the segment was slightly weak in the last reported quarter with revenues declining 15.8% year over year, we believe significant expansion under this segment will help boost the top line. However, comparable Owned and Leased hotels RevPAR increased 4.1% from the prior-year quarter.

Zacks Rank & Stocks to Consider

Hyatt carries a Zacks Rank #2 (Buy).

Some better-ranked stocks in the leisure and recreation industry are Johnson Outdoors Inc. (JOUT - Free Report) , Pool Corp. (POOL - Free Report) and Callaway Golf Co. (ELY - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.

Johnson Outdoors has average positive earnings surprise of 593.6% for the last four quarters.

Pool Corp’s current year earnings are projected to grow 38.9%.

Callaway Golf has average positive earnings surprise of 68.31% for the last four quarters.

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