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Hyatt to Set Foot in Scotland, Expand Hyatt Regency Brand

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Hyatt Hotels Corporation (H - Free Report) recently signed an agreement to open a luxury hotel in Edinburgh, Scotland. The property will be Hyatt’s first hotel in Scotland and third Hyatt Regency property in the United Kingdom. The hotel, comprising 187 guest rooms and 98 apartments, is expected to open in 2021.

The move underscores Hyatt’s efforts to expand and strengthen its brand name. Meanwhile, shares of Hyatt have declined 0.3% in the past year, outperforming the industry’s decline of 15.2%.

Expansion Strategies on Track

Hyatt’s continuous efforts toward expanding brands globally help to expand market share in the hospitality industry, thereby boosting business operations. This enhances its portfolio and prospects in terms of revenue and profitability. Hyatt’s aim to differentiate its brands from one another by providing distinct travel experiences lends it a competitive edge.

In fact, Hyatt has expansion plans in diverse international markets, including Australia, Brazil, Germany, Indonesia and others. Markedly, the company’s new signings across its brands globally have consistently outpaced its openings and this trend is expected to continue in 2018.

Notably, Hyatt registered net room growth of 7.6% on a year-over-year basis in third-quarter 2018, which marked the 14th successive quarter of growth above 6%. The company’s development pipeline grew roughly 6% in the quarter from a year ago. For 2018, it expects to grow units on a net room basis by 6.5-7%, reflecting 60 hotel openings.

Our Take

We believe that the recent hotel addition will strengthen the Hyatt Regency brand’s global footprint and boost Hyatt’s Owned and Leased Hotels revenues. In the third quarter of 2018, revenues from Owned and Leased Hotels were $443 million, down 13.3% (12.9% on a constant currency) from the year-ago figure. Adjusted EBITDA of the segment also decreased 12.5% to $91 million.

Zacks Rank & Stocks to Consider

Hyatt carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Consumer-Discretionary sector are Belmond Ltd. (BEL - Free Report) , DISH Network Corporation (DISH - Free Report) and Rogers Communications Inc. (RCI - Free Report) . While Belmond carries a Zacks Rank #1 (Strong Buy), DISH Network and Rogers Communications carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Belmond has an expected current-year earnings growth rate of 150%.

DISH Network has an expected current-year earnings growth rate of 14.6%.

Rogers Communications has an expected current-year earnings growth rate of 19.6%.

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