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Hyatt (H) on Expansion Spree, Boosts Presence in South America

Hyatt Hotels Corporation H, in collaboration with El Pardo Hospitality, recently announced the addition of the Legend Paracas Resort in Paracas to the Destination by Hyatt brand. This marks the brand's first property in South America and the 15th Hyatt hotel in the region.

Nestled on the coast of Peru, the hotel comprises 124 rooms, a fitness center, a pool and dining spaces. The property is designed to facilitate immersive experiences, featuring authentic designs and hospitality. It offers convenient access to Ballestas Islands, wildlife sanctuary and Paracas National Reserve. The company expects to open the hotel by June 2024, post renovations.

Management maintains a positive outlook regarding the opening of the hotel and the brand's expansion strategy in the Latin America and Caribbean region. The Destination by Hyatt portfolio is steadily expanding in Latin America and the Caribbean, building upon the addition of the previously announced Cas En Bas Beach Resort in St. Lucia. The company emphasizes property renovations tailored to the needs of both business and leisure travelers to pave a path for growth in the upcoming periods.

Focus On Expansion

Hyatt aims to differentiate its brands by providing distinct travel experiences. It is also consistently trying to expand its presence worldwide and plans to expand in Asia-Pacific, Europe, Africa, the Middle East and Latin America. Expansion in these markets will likely help the company gain market share in the hospitality industry and boost business.

During the fourth quarter of 2023, Hyatt added 29 new hotels (or 9,648 rooms) to its portfolio. The openings include the 2,500-room Rio Hotel & Casino in Las Vegas, Nevada, the 1,100-room Sunscape Coco Punta Cana and the 900-room Sunscape Dominicus La Romana in the Dominican Republic. During the quarter, the company unveiled Hotel Toranomon Hills, part of The Unbound Collection by Hyatt (in Japan), and Ronil Goa, a JdV by Hyatt hotel (in India). Also, it opened six hotels in Greater China through a strategic partnership with an affiliate of Mumian Hotels.

It is optimistic about full-service growth opportunities, comprising both newbuilds and conversions globally. In 2024, the company anticipates unit growth to increase in the range of 5.5% and 6% on a net-room basis.

Price Performance

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So far this year, shares of the company have gained 14.1% compared with the industry’s 7.7% growth. The company is benefiting from solid leisure transient demand, recovery in business travel demand, increased system-wide group travel and a loyalty program. Also, the focus on new hotel openings and acquisition efforts bode well. The company emphasizes expansion initiatives and the extended-stay segment in the Americas to drive growth. Earnings estimates for 2024 have increased in the past 30 days, depicting analysts’ optimism regarding the stock’s growth potential.

Zacks Rank & Other Key Picks

Hyatt Hotels currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the Zacks Consumer Discretionary sector are:

JAKKS Pacific, Inc. JAKK sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 42.6%, on average. Shares of JAKK have gained 8.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for JAKK’s 2025 sales indicates a rise of 1.9% from the year-ago levels.

Trip.com Group Limited TCOM currently carries a Zacks Rank #2. TCOM has a trailing four-quarter earnings surprise of 53.1%, on average. Shares of TCOM have gained 29.9% in the past year.

The Zacks Consensus Estimate for TCOM’s 2024 sales and earnings per share (EPS) indicates a rise of 18.2% and 8%, respectively, from the year-ago levels.

Royal Caribbean Cruises Ltd. RCL currently carries a Zacks Rank #2. RCL has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 98.5% in the past year.

The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 14.7% and 47.9%, respectively, from the year-ago levels.

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Hyatt Hotels Corporation (H) : Free Stock Analysis Report

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JAKKS Pacific, Inc. (JAKK) : Free Stock Analysis Report

Trip.com Group Limited Sponsored ADR (TCOM) : Free Stock Analysis Report

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