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Hyatt Opens Hyatt Regency Hotel in Kuwait, Eyes Sales Growth

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Hyatt Hotels Corporation (H - Free Report) relies on differentiated brand portfolio, strong expansion plans and acquisition strategies to drive growth. The company announced the inauguration of Hyatt Regency Al Kout Mall in Kuwait, re-introducing the Hyatt Regency Brand in the country. The hotel is first of the two properties under Tamdeen Group.

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) .

Shares of Hyatt have lost 10.4% over the past year, compared with the industry’s collective decline of 27.7%.


Expansion — A Key Catalyst

Hyatt aims to differentiate its brands from one another by providing distinct travel experiences. The company is also consistently trying to broaden 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. In 2018, it is anticipated to have witnessed unit growth of 6.5-7%, reflecting 60 hotel openings.

Bottomline

We expect the addition of Hyatt Regency Al Kout Mall to strengthen the brand’s position in Middle East. 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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