Hyatt Hotels Corporation H recently introduced the Hyatt Place brand in Germany with the launch of Hyatt Place Frankfurt Airport.
The 312-roomed Hyatt Place Frankfurt Airport is the seventh Hyatt Place hotel in Europe, underscoring the growing demand for the brand in this part of the world. It is located in close proximity to the Frankfurt Airport and has efficient transport links with Frankfurt’s city center and the wider Rhine-Main region.
We note that Hyatt’s shares have rallied 35.4% in the past six months, outperforming the industry’s 30.6% growth.
Global Expansion of Hyatt Place
Launch of Hyatt Place Frankfurt Airport is part of Hyatt’s continuous efforts toward expanding the Hyatt Place brand globally, reflecting its solid momentum in the fast-growing select service category. This is because the opportunity for properties that provide a select range of services at a lower price than full service hotels is particularly compelling in certain markets. This caters to a wide range of customers and meets demand from the middle-class population and business travelers.
Additionally, the company intends to grow its select service presence via third-party construction of new franchised properties, conversion and renovation of existing non-Hyatt properties, and in certain cases, participation in the development of new managed properties.
The Larger Picture
Hyatt is known for its strong brand portfolio. By the end of the last reported quarter, the company's portfolio included 739 properties in 57 countries. The company aims to differentiate its brands by providing a distinct experience for different travelers and focus on gaining global traction on solid brand presence along with innovative personalized services.
The launch also underscores Hyatt’s consistent efforts to expand worldwide and capitalize on demand for hotels in lucrative international markets.
Our Take
We expect the expansion to boost Hyatt’s Owned and Leased Hotels revenues. The performance of the segment was particularly weak in the last reported quarter. Revenues were down 2.7% year over year (down 3.2% at constant currency). Comparable Owned and Leased hotels RevPAR declined 0.5% (down 1.1% at constant currency).
Zacks Rank & Stocks to Consider
Hyatt has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the Consumer Discretionary sector areInterContinental Hotels Group PLC IHG, Choice Hotels International, Inc. CHH and Clarus Corporation CLAR. While Clarus sports a Zacks Rank #1 (Strong Buy), Choice Hotels and InterContinental carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Clarus, Choice Hotels and InterContinental’s 2018 earnings are expected to rise 254.3%, 12% and 15.2%, respectively.
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