Company Reports

The human-ingrained desire to travel and record-level equity asset prices are keeping demand for Hyatt's upper-scale and luxury brands elevated, even with headwinds from the Iran War and security concerns in Mexico. Long term, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening. We are favorable on Hyatt's long-term competitive advantages and think the firm's high-luxury, upper-upscale, and upscale exposures across the globe position it to outperform long-term industry demand, supported by an expanding middle-income class. Hyatt's growing brand advantage is evident in its managed and franchised unit growth, which has averaged 10.1% annually over the past 10 years (2016-25), well above the long-term US industry supply growth rate of 2%, according to STR data. We expect Hyatt to expand its room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, Studios, and Select, which support its intangible brand advantage. We see the company’s room growth averaging 5%-6% annually over the next decade, above the 1%-2% supply growth we estimate for the US industry over the same period. Hyatt's brand advantage is also evident in its loyalty membership, which has grown to more than 69 million, up from 20 million in 2019.

Hyatt's second-quarter revenue per available room, or revPAR, increased 5.9%. Room growth was up 3.9% and adjusted EBITDA rose 8.8%. RevPAR guidance for the year increased to 4% from 3% at the midpoint, and unit growth decreased to 6% from 6%-7%. Shares fell about 8% in July 30 trading.

The human-ingrained desire to travel and record-level equity asset prices are keeping demand for Hyatt's upper-scale and luxury brands elevated, even with headwinds from the Iran War and security concerns in Mexico. Long term, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening. We are favorable on Hyatt's long-term competitive advantages and think the firm's high-luxury, upper-upscale, and upscale exposures across the globe position it to outperform long-term industry demand, supported by an expanding middle-income class. Hyatt's growing brand advantage is evident in its managed and franchised unit growth, which has averaged 10.1% annually over the past 10 years (2016-25), well above the long-term US industry supply growth rate of 2%, according to STR data. We expect Hyatt to expand its room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, Studios, and Select, which support its intangible brand advantage. We see the company’s room growth averaging 5%-6% annually over the next decade, above the 1%-2% supply growth we estimate for the US industry over the same period. Hyatt's brand advantage is also evident in its loyalty membership, which has grown to more than 60 million, up from 20 million in 2019.

On May 28, Hyatt's investor day highlighted its brand proposition, loyalty program, and financial outlook. Specifically, the company sees its rooms and revenue per available room growth averaging 6%-8% and 2%-4%, respectively, annually during 2025-28.

The human-ingrained desire to travel and record level asset prices are keeping demand for Hyatt's upper-scale and luxury brands elevated, even with headwinds from the Iran War and security concerns in Mexico. Long term, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening. We are favorable on Hyatt's long-term competitive advantages and think the firm's high-luxury, upper-upscale, and upscale exposures across the globe position it to outperform long-term industry demand, supported by an expanding middle-income class. Hyatt's growing brand advantage is evident in its managed and franchised unit growth, which has averaged 10.1% annually over the past 10 years (2016-25), well above the long-term US industry supply growth rate of 2%, according to STR data. We expect Hyatt to expand its room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, Studios, and Select, which support its intangible brand advantage. We see the company’s room growth averaging 5% annually over the next decade, above the 1%-2% supply growth we estimate for the US industry over the same period.

Hyatt's first-quarter revenue per available room, or revPAR, increased 5.4%, with the US up 3.3% and international regions up 8%. Unit growth rose 5%. Adjusted EBITDA increased 14.8% aided by asset sales and acquisitions. Shares were up 6% during April 30 trading on strong global demand.

While economic uncertainty could affect near-term industry demand, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening over the long term. We are favorable on Hyatt's long-term competitive advantages and think the firm's high luxury, upper upscale, and upscale exposures across the globe position it to outperform long-term industry demand, helped by an expanding middle-income class. Hyatt's growing brand advantage is evident in its managed and franchised unit growth that has averaged 10.1% annually over the past 10 years (2016-25), well above the long-term US industry supply increase of 2%, according to STR data. We expect Hyatt to expand room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, Studios, and Select, supporting its intangible brand advantage. We see the company’s room growth averaging 5% annually over the next decade, above the 1%-2% supply increase we estimate for the US industry during this time.

Hyatt reported industry-leading fourth-quarter revenue per available room, or revPAR, growth of 4% and a room increase of 7.3%. Strength was driven by luxury revPAR growth of 6.9%. Adjusted EBITDA increased 6%.

While economic uncertainty could affect near-term industry demand, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening over the long term. We are favorable on Hyatt's long-term competitive advantages and think the firm's high luxury, upper upscale, and upscale exposures across the globe position it to outperform long-term industry demand, helped by an expanding middle-income class. Hyatt's growing brand advantage is evident in its managed and franchised unit growth that has averaged 8.8% annually over the past 10 years (2015-24), well above the long-term US industry supply increase of 2%, according to STR data. We expect Hyatt to expand room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, Studios, and Select, supporting its intangible brand advantage. We see the company’s room growth averaging 5% annually over the next decade, above the 1%-2% supply increase we estimate for the US industry during this time.

Hyatt Hotels' third-quarter revenue per available room increased 0.3%, weighed down by a 1.6% decrease in the US, which was affected by economic uncertainty. Development was healthy, with organic room and pipeline growth of 7% and 4%, respectively. EBITDA was up 10%.

While economic uncertainty could affect near-term industry demand, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening over the long term. Hyatt's growing brand advantage is evident in its managed and franchised unit growth that has averaged 8.8% annually over the past 10 years (2015-24), well above the long-term US industry supply increase of 2%, according to STR data. We expect Hyatt to expand room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, Studios, and Select, supporting its intangible brand advantage. We see the company’s room growth averaging 5% annually over the next decade, above the 1%-2% supply increase we estimate for the US industry during this time. We are favorable on Hyatt's long-term competitive advantages and think the firm's high luxury, upper upscale, and upscale exposures across the globe position it to outperform long-term industry demand, helped by an expanding middle-income class.

Hyatt Hotels' second-quarter revenue per available room increased 1.6%, led by 14% growth in the Middle East and Africa, while the US decreased 0.1%. Unit growth was up a healthy 6.5%. The company maintained its 2025 revPAR and room growth guidance of 1%-3% and 6%-7%, respectively.

While economic uncertainty could affect near-term industry demand, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening over the long term. Hyatt's growing brand advantage is evident in its managed and franchised unit growth that has averaged 8.8% annually over the past 10 years (2015-24), well above the long-term US industry supply increase of 2%, according to STR data. We expect Hyatt to expand room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, Studios, and Select, supporting its intangible brand advantage. We see the company’s room growth averaging 5% annually over the next decade, above the 1%-2% supply increase we estimate for the US industry during this time. We are favorable on Hyatt's long-term competitive advantages and think the firm's high luxury, upper upscale, and upscale exposures across the globe position it to outperform long-term industry demand, helped by an expanding middle-income class.

Hyatt's first-quarter revenue per available room, or revPAR, increased 5.7%, led by healthy group and business demand. But the company reduced its 2025 revPAR growth guidance to 1%-3% from 2%-4% amid macroeconomic uncertainty.

While economic uncertainty could affect near-term industry demand, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening over the long term. Hyatt's growing brand advantage is evident in its managed and franchised unit growth that has averaged 8.8% annually over the past 10 years (2015-24), well above the long-term US industry supply increase of 2%, according to STR data. We expect Hyatt to expand room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, and Studios, supporting its intangible brand advantage. We see the company’s room growth averaging 5% annually over the next decade, above the 1%-2% supply increase we estimate for the US industry during this time. We are favorable on Hyatt's long-term competitive advantages and think the firm's high luxury, upper upscale, and upscale exposures across the globe position it to outperform industry demand in 2024, as improving overseas and group travel augments resilient leisure trips.

From where we sit, we attribute the 10% decrease in Hyatt’s shares during Feb. 13 trading to 2024 net income of $1.269 billion missing Street expectations and our $1.429 billion estimate. In fact, net income would have been $1.457 billion when adjusting for an impairment charge in the quarter, which appears to be in part related to an equity investment. We view this charge as one-time and think investors should focus on the strong traveler and owner demand for Hyatt’s brands, the primary source of our narrow moat rating. At this point, we don’t plan a material change to our $147 fair value estimate. We now see shares as fairly priced after the Feb. 13 move in shares.

After entering exclusive talks with Playa last December, narrow-moat Hyatt announced it will acquire the remaining 91.6% it did not own of the all-inclusive resort operator for $2.6 billion, inclusive of $900 million in debt. Initially, we see the strategic merit in expanding Hyatt's all-inclusive presence (about 17% of its total rooms) and find the 11 times trailing 12-month EBITDA purchase price as reasonable. But we don't expect a meaningful change to our long-term forecast for Hyatt. This is due to Hyatt's plans to sell Playa's owned assets, which represent most of the company's revenue, EBITDA, and room base, for at least $2 billion by 2027. That would then leave Hyatt with Playa's managed business, which generated fees of $7 million in 2023, some of which came from resorts using Marriott, Hilton, and Wyndham brands. In the end, we see the acquisition allowing Hyatt to bring the management a few thousand rooms currently under Playa's Hyatt Ziva and Zilara brands in house. Additionally, Hyatt should see incremental management revenue from future expansion of its Ziva and Zilara brands. We have maintained our $147 fair value estimate, which we plan to revisit after Hyatt reports earnings Feb. 13, and our Standard Capital Allocation Rating. We see shares trading at 15 times forward EV/EBITDA as slightly overvalued.

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.

While a reduced consumer savings rate could affect near-term industry demand, we see Hyatt’s brand intangible asset—the primary source of its narrow moat—strengthening over the long term. Hyatt's growing brand advantage is evident in its managed and franchised unit growth that has averaged more than 10% annually over the past 10 years (2014-23), well above the long-term US industry supply increase of 2%, according to STR data. We expect Hyatt to expand room and revenue share in the hotel industry over the next decade, buoyed by newer brands like House, Place, Apple Leisure Group, and Studios, supporting its intangible brand advantage. We see the company’s room growth averaging 5% annually over the next decade, above the 1%-2% supply increase we estimate for the US industry during this time. We are favorable on Hyatt's long-term competitive advantages and think the firm's high luxury, upper upscale, and upscale exposures across the globe position it to outperform industry demand in 2024, as improving overseas and group travel augments resilient leisure trips.

Hyatt shares dropped 7% in Oct. 31 trading as the firm said it expects higher unit attrition in 2024. We don’t see this culling as a sign that Hyatt’s brand (the primary source of our narrow moat rating) is deteriorating. We point to the hotelier’s 135,000 rooms in its pipeline—up 10% from a year ago and representing an industry-leading 41% of its existing base—as evidence that its competitive edge is intact. Thus, we don’t expect to materially change our 2025-33 average annual unit growth forecast of 4.4% or our $147 fair value estimate. We see the shares as appropriately valued.