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Hyatt Expands Hyatt Centric Brand in India, Eyes Sales Growth

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Hyatt Hotels Corporation (H - Free Report) heavily banks on its differentiated brand portfolio, strong expansion plans and acquisition strategies to drive growth. The company has recently announced that it rebranded its Hyatt Place Goa to Hyatt Centric Candolim Goa. Notably, this marks Hyatt Centric brand’s second venture in India. The 167-roomed hotel lies in the heart of the travel destination and offers full-service facilities.

The move not only underscores Hyatt’s relentless focus on expansion but is also the hotelier’s way of countering growing competition from the likes of Marriott (MAR - Free Report) Hilton (HLT - Free Report) and smaller hotel chains like Choice Hotels (CHH - Free Report) .

Although shares of Hyatt have lost 11.8% over the past year, it outperformed the industry’s collective decline of 27%.

Expansion Strategy in Place

Hyatt aims to differentiate its brands from one another by providing distinct travel experiences. The company is also consistently trying to expand its presence worldwide and has expansion plans in the Asia-Pacific, Europe, Africa, the Middle East and Latin America.

Hyatt’s new signings across its brands have consistently outpaced its openings and this trend is expected to continue in 2019. In second-quarter 2018, Hyatt registered net room growth of 7.6% on a year-over-year basis, which marked the 14th successive quarter of recording growth above 6%. The company’s development pipeline grew roughly 6% in the third quarter compared with the prior-year quarter. For 2018, it is supposed to have seen unit growth of 6.5-7%, reflecting 60 hotel openings.

Our Take

We expect the addition of Hyatt Centric Candolim Goa to strengthen the brand’s position in India. Further, the move can be read as Hyatt’s efforts to accelerate revenues in the Owned and Leased Hotels segment. As it is, the segment’s revenues totaled $443 million in the third quarter of 2018, down 13.3% year over year.

Hyatt currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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