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Hyatt Opens Hotel in Ethiopia, Expands Hyatt Regency Brand

Zacks Equity Research

Hyatt Hotels Corporation H is consistently trying to fortify its presence worldwide. To this end, the company has announced the opening of Hyatt Regency Addis Ababa. Notably, this is the first Hyatt branded hotel in Ethiopia and the seventh in Africa.

The hotel, comprising 188 rooms, is located on Meskel Square. It also has 18,300 square feet of meeting space as well as 2,530 square foot of fitness center.

This latest move underscores Hyatt’s efforts to expand and strengthen its brand name. We believe that the recent hotel addition will strengthen the Hyatt Regency brand’s global footprint and provide a boost to Hyatt’s Owned and Leased Hotels revenues.

A glimpse of the company’s price trend reveals that it has outperformed the industry in a year’s time. Shares of Hyatt have lost 10.7% compared with the industry’s 26.6% decline.


Strategic Expansion to Drive Growth

Recently, the company also announced the inauguration of Hyatt Regency Al Kout Mall in Kuwait, re-introducing the Hyatt Regency Brand in the country. This hotel is first of the two properties under Tamdeen Group.

Hyatt aims to differentiate its brands from one another by providing distinct travel experiences. The company is also consistently trying to expand its presence worldwide and has expansion plans in the Asia-Pacific, Europe, Africa, the Middle East and Latin America. We believe this will help the company to counter competition from the likes of Marriott MAR and Hilton HLT.

Furthermore, Hyatt’s new signings across its brands have consistently outpaced its openings and this trend is expected to continue in 2019. In second-quarter 2018, Hyatt registered net room growth of 7.6% on a year-over-year basis, which marked the 14th successive quarter of recording growth above 6%. The company’s development pipeline grew roughly 6% in the third quarter compared with the prior-year quarter. In 2018, it is anticipated to have witnessed unit growth of 6.5-7%, mirroring 60 hotel openings.

Hyatt currently carries a Zacks Rank #3 (Hold).

Key Pick

A better-ranked stock in the same space is Belmond Ltd. BEL. The company has a Zacks Rank #1 (Strong Buy) and an impressive long-term earnings growth rate of 15%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Hyatt Hotels Corporation (H) : Free Stock Analysis Report
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