Hyatt Debuts Resort in Japan, Expands Hyatt Regency Brand

Shutterstock photo

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.

Countering Competition

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 .

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

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 report

Marriott International (MAR): Free Stock Analysis Report

Hyatt Hotels Corporation (H): Free Stock Analysis Report

Choice Hotels International, Inc. (CHH): Free Stock Analysis Report

Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: MAR , H , CHH , HLT

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?