Hyatt Sets Foot in Malta, Regency Brand Expansion Continues
Hyatt Hotels Corporation H is consistently making efforts to expand its brand footprint worldwide. To this end, the company announced that its affiliate inked a franchise deal with Bay Street Holdings Limited to develop the first Hyatt-branded hotel in Malta. The hotel is likely to open in 2021.
The opening of Hyatt Regency Malta is in line with Hyatt’s efforts to expand and strengthen its brand name. The company plans on capitalizing the growing tourist population in Malta. The country’s tourist numbers have doubled since 2010. The hotel will be located near beach and marina as visitors are choosing to stay at the coastal destination of St. Julian’s.
We believe that Hyatt Regency Malta will further enhance the company’s brand position in Europe. Recently, the company announced that its affiliate inked a franchise deal with Realtejo – Hotelaria e Turismo, S.A., to develop the first Hyatt branded hotel in Portugal. The hotel named Hyatt Regency Lisbon will likely open in late 2020 and will be situated in a convenient location. The company will also open Hyatt Regency Barcelona Fira and Hyatt Regency Hesperia Madrid.
Also, we believe that these recent hotel additions will fortify the Hyatt Regency brand’s global footprint and provide a boost to Hyatt’s Owned and Leased Hotels’ revenues. As it is, in the first quarter of 2019, revenues at Owned and Leased Hotels totaled $458 million, down 9.6% from the year-ago figure.
Expansion — Major Growth Driver
Hyatt aims to differentiate its brands from by providing distinct travel experiences. It is also consistently trying to expand presence worldwide and has plans for the Asia Pacific, Europe, Africa, the Middle East and Latin America.
Meanwhile, the company’s new signings across its brands globally consistently outpaced openings. This trend is expected to continue in 2019. In 2018, Hyatt registered net room growth of 13.6% on a year-over-year basis. For 2019, it expects unit growth of roughly 7-7.5%, reflecting 80 hotel openings.
In the past six months, the company’s shares have gained 11.3% compared with the industry’s rally of 20.1%.
Zacks Rank & Stocks to Consider
Hyatt, which shares space with Choice Hotels International, Inc. CHH, currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Red Lion Hotels Corporation RLH and Wyndham Destinations, Inc. WYND. Both stocks currently have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Red Lion Hotels’ current-year earnings are likely to witness growth of 102.2%.
Wyndham Destinations reported better-than-expected earnings in all of the trailing four quarters, the average being 5.9%.
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