In order to beef up its Asian portfolio, Hyatt Hotels Corporation (H - Free Report) is all set to introduce its first Hyatt Regency branded property in Bangkok, Thailand in association with a local real estate development company titled Grande Asset Hotels and Property Public Company Limited. The property is slated for a 2017 opening. Located in the heart of Bangkok, the hotel will be the integral part of a mixed-use construction comprising a shopping center and an upscale residential tower.
The upcoming Hyatt Regency will feature 300 guest rooms, 26 suites and 10,700 square feet of meeting space along with many other amenities. Further, the hotel will be in close proximity to upscale residences, offices of major international companies and premium retail stores making it apt for both business and luxury travelers.
We believe that Bangkok, being a major tourism hub as well as the capital of Thailand, is a strategic fit for new hotels. The hotelier is all set to tap the Thai market as it attracts tourists from all over the world. Amongst them, Malaysia, China, Russia and Japan are the important sources of visitors, according to a global market research company Euromonitor.
As per Euromonitor, Thailand’s rich cultural value and striking heritage sites are the other attractions for tourism. Last but not the least, the country’s value-sensitive nature for shopping, dining and lodging, catch the attention of a majority of the tourists. Tourism Authority of Thailand also remains very active in endorsing the country by frequently arranging tourism exhibitions and other promotional events.
To shift its focus from the rather saturated developed markets, Hyatt is currently inclined towards the faster growing Asia-Pacific region to benefit from the increase in demand for hotels. The company currently operates more than 50 hotels in the Asia-Pacific region. Apart from the recently opened Hyatt Regency, the company has one of its other brands, Grand Hyatt, operating in Bangkok.
Hyatt’s major competitors Starwood Hotels & Resorts Worldwide Inc. and Marriott International Inc. (MAR - Free Report) also have a considerable presence in Bangkok. With the rapid entry of global chains as well as local brands, the lodging supply scenario is strengthening in Bangkok, which might affect the average daily rate for the hoteliers, going forward.
Hyatt currently retains a Zacks #3 Rank, which translates into a short-term 'Hold' rating. We also reiterate our long-term 'Neutral' recommendation on the stock.