Hyatt(US:H) ZACKS·2024-11-29 16:46Core Viewpoint - Hyatt Hotels Corporation is leveraging rising demand, new hotel openings, and strategic acquisitions to enhance growth, supported by an asset-light business model and loyalty programs [1] Group 1: Financial Performance - Shares of Hyatt have increased by 19.7% year-to-date, underperforming the Zacks Hotels and Motels industry's 26.5% growth [2] - In Q3 2024, system-wide comparable RevPAR rose by 3% year-over-year, driven by improved business and group travel [4] - Business transient revenues grew approximately 16% year-over-year in Q3 2024, indicating strong momentum in this customer segment [4] Group 2: Revenue Growth Drivers - Group rooms revenues increased by 6% year-over-year in Q3 2024, contributing to a RevPAR growth of 2.8% in upper upscale brands [5] - The company anticipates continued strength in business and group travel segments into 2025 [5] Group 3: Expansion and Acquisitions - In Q3 2024, Hyatt added 16 new hotels, resulting in a 4.3% increase in net room growth, with expectations for net room growth to rise between 7.75% and 8.25% year-over-year in 2024 [6][11] - A joint venture with Grupo Piñero will add 23 resorts and over 12,000 rooms to Hyatt's portfolio, increasing its all-inclusive offerings by 30% [7] - The acquisition of Standard International added 22 hotels with approximately 2,000 rooms, enhancing Hyatt's lifestyle segment [9] Group 4: Asset-Light Strategy - Hyatt has focused on an asset-light strategy, generating $2.6 billion in gross proceeds from asset dispositions over three years, with a significant sale of Hyatt Regency Orlando for $1.07 billion [10] - The company plans to further reduce hotel ownership and expects to exceed an 80% asset-light earnings mix by 2025 [11] Group 5: Earnings Estimates - The Zacks Consensus Estimate for Hyatt's 2024 earnings per share has increased to $3.89, indicating a 52% year-over-year growth potential [13]