Hyatt: New Studios Brand Supports Our Estimate for Long-Term Unit Growth

After exploring the hotel design of Hyatt Hotels' newest brand, Studios, this week, we have increased confidence in our average annual 5% unit growth estimate during 2024-33 for the narrow-moat company. The first Hyatt Studios hotel is set to open in 2025, and we think the brand can expand to several hundred units during the next decade. This is noteworthy, given that the operator had 1,363 total hotels as of Sept. 30, with Hyatt House’s 427 currently representing the largest concept in the portfolio. We don’t plan to change our $147 fair value estimate, but we will be closely monitoring Hyatt Studios' progress and any implications for our long-term unit growth estimates. We see the shares as fairly valued.