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Hyatt on Expansion Spree, To Open 20 Luxury Hotels by 2020

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Hyatt Hotels Corporation (H - Free Report) consistent efforts to expand its presence worldwide and capitalize on demand for hotels in international markets are commendable. The company announced that it plans to add more than 20 new luxury hotels and resorts to its portfolio by the end of 2020.

The company will open new hotels under the Park Hyatt, Andaz, Alila, Grand Hyatt, Miraval and The Unbound Collection by Hyatt brands. Mark Vondrasek, chief commercial officer, Hyatt said that “We’re excited to expand into new markets and enhance the global footprint of our brands, giving our guests and members additional ways to connect with our luxury offerings in places where they want to be.”

Hyatt, which will celebrate its 40th anniversary in 2020, plans to open five Park Hyatt hotels by 2020 in Doha, Qatar; Jakarta, Indonesia; Niseko, Japan; Suzhou, China; and Auckland, New Zealand. The company will also expand its Alila brand by opening hotels in Switzerland, Malaysia and Oman by 2020. Moreover, Andaz branded luxury lifestyle properties will expand its footprint in Dubai, UAE; Prague, Czech Republic; Bali, Indonesia; Shenzhen and Xiamen in China; and Palm Springs, California.

The Grand Hyatt brand will expand its presence in Hefei and the Shenzhou Peninsula in China, Kuwait, Gurgaon in India, Jeju in South Korea, and Nashville, Tennessee.

Global Expansion to Offset Competition

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.

Expansion in these markets should help the company gain market share in the hospitality industry, thus boosting business. Thus, an essential aspect of the company’s riveting growth potential is its strong brand presence and continual expansion in higher growth and under-penetrated markets such as India and China.

Apart from these, the company has announced further expansion plans in diverse international markets like Australia, Brazil, Germany, the U.K., Indonesia, Japan, Mexico, Saudi Arabia, Singapore, Thailand, the Netherlands and others. Meanwhile, the company’s new signings across its brands globally have consistently outpaced openings. This trend is expected to continue in 2019 and beyond.

We believe this will help the company to counter competition from the likes of Marriott (MAR - Free Report) and Hilton (HLT - Free Report) . A glimpse of the company’s price trend reveals that it has outperformed the industry in the past six months. Shares of Hyatt have gained 10.8%, outperforming the industry’s 10% growth.

Hyatt currently carries a Zacks Rank #3 (Hold).

Key Pick

A better-ranked stock in the same space is Civeo Corporation (CVEO - Free Report) . The company has a Zacks Rank #2 (Buy) and reported better-than-expected earnings in three of the trailing four quarters, with the average being 42.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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