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Hyatt (H) Expands Hyatt Place Select-Service Brand in France

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Hyatt Hotels Corporation (H - Free Report) recently announced a franchise agreement with a subsidiary of Matmut S.A.M. to open a luxury hotel in Rouen, France. Notably, the new property will be managed by Cycas Hospitality and will mark Hyatt’s first hotel in the capital of Normandy and second Hyatt Place property in France.

The 78 guest-roomed hotel is expected to open in 2021 and will join the dual-branded Hyatt Place and Hyatt House hotels in Europe.

The move underscores Hyatt’s efforts to expand its footprint and strengthen its select service category. Driven by its global brand presence, shares of Hyatt have gained 25.8% in the past year, outperforming the industry’s decline of 0.7%.

Here’s Why Hyatt is Pressing Ahead With Select Service Hotels

In a bid to strengthen its fast-growing select service category, the Hyatt Place and Hyatt House brands are continuously striving to make a mark in international markets. Hyatt’s primary focus on expanding select service brand lends it a competitive edge.

The company strongly believes that the opportunity for properties that offer selected services at a lower price than full-service hotels is particularly compelling in certain markets, including India, China and the Middle East. This is because there is a large and growing middle-class population in these markets along with a significant number of local business travelers.

Our Take

We believe that the recent hotel addition will strengthen the Hyatt Place brand’s global footprint and boost Hyatt’s Owned and Leased Hotels revenues. The performance of the segment was particularly weak in the last reported quarter. Revenues were down 15.8% year over year (down 16.4% at constant currency).

Zacks Rank & Stocks to Consider

Hyatt carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Consumer-Discretionary sector are Caleres, Inc. (CAL - Free Report) , Glu Mobile Inc. (GLUU - Free Report) and Carter's, Inc. (CRI - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Caleres has an expected current-year earnings growth rate of 15.7%.

Glu Mobile has an impressive long-term earnings growth rate of 15%.

Carter’s reported better-than-expected earnings in the last four quarters, the average beat being 15.3%.

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