Hyatt Hotels Corporation (H), a leading global hospitality company, is set to further explore the Chinese hotel market. The company announced the signing of contracts to manage eleven additional hotels in China. This would double the company’s properties to 22.
Hyatt currently manages 17 hotels in China, representing the largest market outside United States. The company plans to open 4 hotels, comprising Hyatt Ningbo, Hyatt Regency Jinan, Hyatt Regency Guiyang and Hyatt Regency Qingdao in 2011, and additional nine properties in 2012.
Based in Chicago, Illinois, the company also plans to expand in the Indian market by opening 15 new markets over the next 5 years.
Hyatthas benefited from the recovery in business travel, as the company’s comparable international Revenue per Available Room (RevPAR) jumped 21.4% year over year in second quarter of 2010, primarily attributable to the strong performance in Asia-Pacific region.
The demand for hotels is greater in the international market than in the U.S., where the pace of economic recovery is particularly fast. Many U.S.based companies are targeting the fast-growing emerging economies to set up a base to explore the growth opportunities they present.
The Asia-Pacific region, particularly China and India, promises solid growth potential. As a consequence, its peer companies such as Starwood Hotels and Resorts Worldwide Inc. (HOT), Marriott International Inc. (MAR), InterContinental Hotels Group plc (IHG) are also expanding their pipeline in this region.
We have a Zacks #2 Rank (short-term Buy recommendation) on the shares. We also reiterate our long-term Neutral rating.
Hyattand its subsidiaries engage in the management, franchising, ownership and development of hotels and resorts. As of June 30, 2010, the company’s worldwide portfolio consisted of 445 properties.
HYATT HOTELS CP (H): Free Stock Analysis Report
Zacks Investment Research
