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Hyatt Extends Loyalty Program Facilities to Thompson Hotels

Zacks Equity Research

Hyatt Hotels Corporation H announced that it made Thompson Hotels the first brand to join the World of Hyatt loyalty program. Notably, Thompson Hotels is the former Two Roads Hospitality LLC brand, which Hyatt acquired last year.

By extending the loyalty program facilities, Hyatt is lending advantage to consumers, where they have a wider range of hotels to choose from. Members can also earn and redeem greater points, and enjoy in-hotel benefits, with eight Thompson Hotels located throughout the United States, Canada and Mexico.

Hyatt plans to bring in its other brands into the fold of the World of Hyatt loyalty program. These brands include Joie de Vivre Hotels, Alila Hotels and Destination Hotels.

Growth Strategies in Focus

The move is in line with Hyatt’s efforts to restructure the portfolio and drive incremental growth. It is strongly invested in strategies related to various acquisitions and divestitures that can drive growth. The above-mentioned move can also be part of Hyatt’s effort to strengthen financial flexibility and focus more on core operation.

In 2017, the company acquired Miraval Group, which extended the Hyatt brand beyond traditional hotel stays into a wellness category that resonates well with high-end travelers. Moreover, Hyatt is increasing the focus on private accommodations, another fast-growing travel segment, which has the potential to extend the Hyatt brand beyond traditional hotel space and is a fantastic fit to the Hyatt portfolio as well as its brand positioning.

Focus on Loyalty Program to Increase Occupancy

In order to survive the tough competition from the likes of Marriott MAR and Hilton HLT, Hyatt is continuously devising ways to enhance guest experience and raise occupancy. The company has a creative approach to food and beverage at its hotels worldwide, and created profitable and popular venues that build and enhance demand for its hotel properties.

Meanwhile, in 2017, it launched a loyalty program, World of Hyatt, which replaced the Gold Passport loyalty program. Notably, World of Hyatt is a platform for guest engagement. The company is witnessing a higher level of guest satisfaction, owing to these enhancements.

Bottom Line

We believe that by integrating all the brands to Hyatt’s portfolio, the company will be able to offer greater customer satisfaction that in turn will drive occupancy and revenue per available room (RevPAR).

In the fourth quarter of 2018, comparable system-wide RevPAR increased 1.5%, taking into account a 3% increase of the same at comparable owned and leased hotels. Also, comparable U.S. hotel RevPAR rose 0.9%.

Price Performance

Shares of Hyatt have lost 6.5% in the past year, outperforming the industry’s collective decline of 15.4%. Extended Stay America STAY, which belongs to the same space, has lost 8% in the same time frame.

Hyatt currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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