Hyatt Hotels CorporationH relies heavily on the expansion of its brands worldwide in order to strengthen its global portfolio, and capitalize on the growing demand for luxury and business travel. To this end, the company announced the debut of the first beach resort in South Japan by Hyatt Regency.
This leading hospitality company opened Hyatt Regency Seragaki Island Okinawaon the private Seragaki Island, which is connected to the mainland of Okinawa by a bridge.
The 344-roomed property lies in close proximity to the Naha Airport and other heritage sites. Notably, the opening of the hotel is in line with Hyatt's efforts to expand its footprint in Asia. The company's strong brand recognition, efforts to enhance guest experience and an increased focus on operational excellence help it outperform its peers.
In a year's time, Hyatt's shares have rallied 37.2%, outpacing the industry 's collective growth of 5.8%.
International Expansion Drives Top Line
Hyatt's continuous efforts toward expanding its brands globally should help it increase its market share and thereby drive revenues. Hyatt is focused on expanding its presence worldwide and capitalizing on the demand for hotels in profitable but relatively untapped international markets. To this end, the company is relentlessly foraying into the markets of Asia, Africa, Middle East and Latin America.
Notably, the company's hotel opening agreements have continually outpaced its actual openings,courtesy of its aggressive expansion efforts. This trend is expected to continue in the near future. The company has experienced net room growth of more than 6% for 13 consecutive quarters. In fact, for 2018, the company expects units to grow by roughly 6-6.5%, on a net rooms basis, reflecting 60 hotel openings.
Further, we expect the recent launch to boost Hyatt's Owned and Leased Hotels revenues. The performance of the segment was weak in the last-reported quarter. Revenues were down 16.4%year over yearin constant currency.
We believe that by expanding its brands globally, Hyatt is trying to fend off competition from the likes of Marriott MAR , Choice Hotels CHH and Hilton HLT . As it is, the hotel industry is highly competitive as major hospitality chains, with their well-established and recognized brands, are continuously expanding their global presence. Hyatt is continuously facing intense competition from both large hotel chains and smaller independent local hospitality providers.
Unless this Zacks Rank #3 (Hold) company counters these competitions with appropriate strategies, it may lose out on market share.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportMarriott International (MAR): Free Stock Analysis ReportHyatt Hotels Corporation (H): Free Stock Analysis ReportChoice Hotels International, Inc. (CHH): Free Stock Analysis ReportHilton Worldwide Holdings Inc. (HLT): Free Stock Analysis ReportTo read this article on Zacks.com click here.