Hyatt Hotels Corporation H is set to acquire the brands and most affiliates of Standard International, the parent company of The Standard and Bunkhouse Hotels brands.
The base purchase price to be paid by Hyatt upon closure will be $150 million, with an extra $185 million over time as additional properties enter the portfolio. The deal is expected to close in late 2024 upon the satisfaction of customary closing conditions.
Perks of the Buyout
Upon acquiring Standard International, Hyatt will welcome management, franchise, and license contracts for 21 open hotels with approximately 2,000 rooms to its portfolio, thus aiding it in developing within the industry’s premier lifestyle space. The properties under Standard International include The Standard in London, The Standard, High Line in New York City, The Standard in Bangkok Mahanakhon and boutique treasures like Hotel Saint Cecilia in Austin, TX, and Hotel San Cristóbal in Baja California, Mexico, to name a few. Also, the acquired portfolio will be 100 percent asset-light.
After the acquisition, Hyatt will form a new dedicated lifestyle group headquartered in New York City. This group will leverage its best-in-class operational and loyalty infrastructure and amalgamate both the company’s workforce to ensure the delivery of top-tier services across the properties.
Hyatt plans to integrate the aforementioned hotels into its World of Hyatt loyalty program after the acquisition, thereby bringing this portfolio of celebrated lifestyle properties to the program’s 48 million loyalty members.
Additionally, Sansiri PLC acquired a majority position in Standard International in 2017, thus allowing it to own several properties managed or franchised under the acquired brands.
Global Expansion Initiatives
Hyatt is consistently trying to expand its presence worldwide and has expansion plans in Asia-Pacific, Europe, Africa, the Middle East and Latin America. Expanding in these markets would help it gain market share in the hospitality industry, thus boosting business. Its recent openings have strengthened its brand equity and opened new markets for guests and members.
In the second quarter of 2024, the company added 18 hotels (or 3,251 rooms) to its portfolio. Notable openings included the Park Hyatt Changsha, marking the tenth Park Hyatt in Greater China, and the Hyatt Vivid Grand Island in Cancun, the company’s first Hyatt Vivid all-inclusive property.
Hyatt’s growth pipeline continues to drive the expansion of its global portfolio, achieving net room growth of 4.6% during the quarter. As of Jun 30, 2024, the company had a pipeline of executed management or franchise contracts for approximately 670 hotels (or about 130,000 rooms).
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Shares of this global hospitality company have gained 27.6% in the past year, outperforming the Zacks Hotels and Motels industry’s 14% growth.
Zacks Rank & Key Picks
Hyatt currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Consumer Discretionary sector:
Royal Caribbean Cruises Ltd. RCL currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has rallied 58.4% in the past year. The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) indicates growth of 18.1% and 69.9%, respectively, from the year-ago levels.
DoubleDown Interactive Co., Ltd. DDI presently flaunts a Zacks Rank of 1. DDI has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has surged 74.2% in the past year.
The consensus estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Norwegian Cruise Line Holdings Ltd. NCLH currently sports a Zacks Rank of 1. NCLH has a trailing four-quarter earnings surprise of 5.7%, on average. The stock has declined 6.6% in the past year.
The Zacks Consensus Estimate for NCLH’s 2024 sales and EPS indicates an increase of 9.8% and 122.9%, respectively, from the year-ago levels.
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