Hyatt Hotels Corporation
) recently announced that one of its affiliates has entered into
management contracts for two new hotels in India. Financial terms
of the deal were not disclosed. The two new hotels bring the total
number of properties now under construction or development for
Hyatt to 56 in India.
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One of the new hotels named Andaz Gurgaon will open under its Andaz
brand in Gurgaon, the industrial and financial center of the state
of Haryana. Another hotel named Grand Hyatt Kochi will open under
the brand Grand Hyatt in Kochi, one of the hottest tourist
destinations in India. Both the hotels are strategically located
and will further boost Hyatt's presence in India.
The new hotel, Andaz Gurgaon, will comprise 275 guest rooms and 75
serviced apartments along with other amenities like multi-cuisine
restaurant, a bar and a gourmet store, a spa, a fitness center and
a swimming pool. The other hotel Grand Hyatt Kochi will include 250
guest rooms and all the luxurious facilities to provide
best-in-class customer experience. Andaz Gurgaon hotel is expected
to open in the later half of 2014 and Grand Hyatt Kochi hotel is
slated to come up in the beginning of 2017.
Apart from these, Park Hyatt Chennai, Hyatt Place Hampi and Hyatt
Place Pune, Hinjewadi are slated for launch later this year.
The demand for hotels is greater in the international market than
in the U.S., particularly in the Asia-Pacific region, where the
pace of economic recovery is particularly fast. Apart from the
Chinese market, hoteliers are expecting India to offer significant
growth potential. In the Indian market, demand for hotels
considerably outpaces the supply. Additionally, India is expected
to experience a meaningful increase in gross domestic product
within the next few years. Thus, we expect Hyatt to benefit
considerably from this strategic expansion going forward.
Hyatt emerged in India nearly 30 years back. Since then, the
company has focused on driving brand preference by providing full
portfolio of brands and extensive service in Indian large as well
as mid-sized markets. The hotelier sees significant opportunities
for growth in India, which still remains considerably untapped.
However, the company faces stiff competition in India from major
InterContinental Hotels Group
Marriott International Inc.
Starwood Hotels & Resorts Worldwide Inc.
), all of which are on track to beef up their Indian portfolios.
Hyatt, a leading global hospitality company, owns, develops,
manages and franchises Hyatt-branded hotels, resorts, residential
and vacation ownership properties throughout the world. The company
operates under the brands - Hyatt, Park Hyatt, Andaz, Grand Hyatt,
Hyatt Regency, Hyatt Place, Hyatt House, Hyatt Residences and Hyatt
Vacation Club. As of March 31, 2012, Hyatt's portfolio consisted of
488 properties in 45 countries worldwide.
Hyatt Hotels will likely release its second quarter 2012 earnings
on August 1, 2012. The Zacks Consensus Estimate for the second
quarter is pegged at 23 cents per share.
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.