Hyatt Hotels Corporation (H) recently announced that a Hyatt affiliate inked a management agreement with an affiliate of Island Hospitality Partners, LLC to unveil Hyatt Place Manatí, Puerto Rico in early 2014.
This is not the first time Hyatt is collaborating with Island Hospitality. In March of this year, Hyatt ventured with Island Hospitality to unveil Hyatt Place Bayamón and El Tropical Casino. The property, slated to open in 2014, had marked the come back of Hyatt-branded hotels in Puerto Rico after a nine-year hiatus.
The new property will feature 104 luxurious guest rooms as well as an 11,500 square feet casino along with various other amenities. The hotel, located near San Juan, is easily accessible by guests.
Further, the location is home to several leading multinational corporations and pharmaceutical companies of the city, making the property a strategic fit. A close proximity to two of Puerto Rico’s most important hospitals, Manatí Medical Center and Doctors’ Center Manatí, will also enable the hotel to attract business travelers.
Puerto Rico has been playing a major role in the hoteliers' Caribbean expansion plans. The location enjoys an edge over any other Caribbean island as it offers strong connectivity to other places and stresses on eco-tourism.
Moreover, the U.S. citizens are excused by the government of Puerto Rico from producing a passport. Following this initiative, Puerto Rico saw a substantial increase in overall tourist traffic. Therefore, we expect hoteliers to considerably benefit from this strategic expansion going forward.
The company should be wary of its competitors as two of its peers Starwood Hotels & Resorts Worldwide Inc. (HOT) and Wyndham Worldwide Corporation (WYN) also have presence on the island.
At present, this Chicago-based company operates more than 165 Hyatt Place hotels in the United States. Hyatt also has more than 35 properties in progress throughout the U.S., Europe, the Caribbean, China, Latin America, Southwest Asia and the Middle East.
Hyatt currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
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