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Hyatt on Expansion Spree, to Open Hotels in Southeast Asia

Zacks Equity Research

Hyatt Hotels Corporation H is consistently trying to fortify its presence worldwide. Recently, the company signed an agreement with Xuan Mai Sai Gon Construction Investment Joint Stock Company to develop a 300-key Hyatt Place Saigon, District 7, as well as a 250-key Hyatt House Saigon, District 7, in one of the Ho Chi Minh City’s largest districts.

The construction of these hotels is likely to be completed in 2023. This latest move will also mark the Hyatt’s first dual-branded Hyatt Place and Hyatt House hotel project in Southeast Asia and the first Hyatt House brand in Vietnam. The company also said it is likely to triple its presence in Vietnam over the next few years.

David Udell, group president, Asia-Pacific, Hyatt Hotels stated that “Whether guests are looking for short term or extended stay accommodations, the location of Hyatt Place Saigon, District 7 and Hyatt House Saigon, District 7 will put them in the heart of an up-and-coming residential, commercial and entertainment district that is well connected to Ho Chi Minh City’s Central Business District.”

So far this year, shares of Hyatt have gained 14.5% compared with the industry’s collective growth of 22.3%.



Expansion to Spur Growth

Hyatt’s consistent efforts to expand its presence in Asia-Pacific, Europe, Africa, Middle East and Latin America are commendable. Expansion in these markets should help the company gain market share in the hospitality industry and in turn, boost its business. Notably, 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.

These apart, the company has announced further expansion plans in the diverse international markets like Australia, Brazil, Germany, the U.K., Indonesia, Japan, Mexico, Saudi Arabia, Singapore, Thailand, the Netherlands and others.

Meanwhile, Hyatt’s new signings across its brands globally have consistently outpaced openings. This trend is expected to continue in 2019 and beyond. In 2018, Hyatt registered net room growth of 13.6% on a year-over-year basis. For 2019, it expects unit growth of roughly 7.25-7.75%, which indicates 85 new hotel openings.

Zacks Rank & Stocks to Consider

Hyatt, which shares space with Marriott International, Inc. MAR, has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Civeo Corporation CVEO and GreenTree Hospitality Group Ltd. GHG, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Civeo reported better-than-expected earnings in three of the trailing four quarters, with average being 42.5%.

GreenTree Hospitality Group has an impressive long-term earnings growth rate of 18.3%.

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