Chicago, Illinois-based Hyatt Hotels Corporation (H), a leading global hospitality company, announced that its affiliate has bought a majority ownership in an ocean-front property in Brazil where it plans to construct a 408-room hotel in the brand Grand Hyatt.
The property is located in Barra da Tijuca, a famous district of Rio de Janeiro. Barra da Tijuca is well known for its beaches and American-influenced lifestyle and is a common destination for the Brazilian high society members, celebrities and football stars.
Barra da Tijuca will also host most of the 2016 summer Olympics. Moreover, Rio de Janeiro, the second largest city in Brazil, is a renowned international destination attracting both business and leisure travelers.
The new hotel Grand Hyatt Rio de Janeiro will be in addition to the existing 36 Grand Hyatt hotels spread all over the world. The hotel will feature 2 full service restaurants, 1,300 square meters of additional meeting and function space, a 900 square meter ballroom, a lounge/bar, pool bar, fitness center and spa. Excluding the new hotel, the company has other 10 Grand Hyatt properties under development.
Though financial details of the deal were not disclosed, we believe that the company will definitely benefit from this decision based on the strategic location of the property. Moreover, Brazil is the largest country in South America and it is one of the world’s fastest growing major economies. Thus, we view expansion in Brazil as a great growth opportunity.
Hyatt is completely focused on accelerating its international expansion. The company has a substantial development pipeline and is poised to benefit from the increase in demand for hotels in markets outside the U.S. Other than the Brazilian market, the hotelier is planning to expand its presence in China by opening 4 hotels in 2011, and additional 9 properties in 2012.
The company also plans to expand in the Indian market by opening 15 new hotels over the next 5 years. Hyatt Hotels’ competitors such as Starwood Hotels and Resorts Worldwide Inc (HOT)and Marriott International Inc. (MAR)are also expanding their pipeline in this region.
HYATT HOTELS CP (H): Free Stock Analysis Report
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