Hyatt On Expansion Spree, Plans To Open Hotels In Canada

Hyatt Hotels Corporation (NYSE:H) is leaving no stone unturned to fortify its presence worldwide. The company has announced plans to expand its presence in Canada with the addition of more than 20 new hotels by 2022. This, in turn, will strengthen footprint in the country by 50%. Following the news, shares of the company increased 2.2% yesterday. In the past six months, the stock has gained 8% compared with the industry’s 13.7% growth.

The company will open three hotels — Hyatt Centric Niagara Falls, Hyatt Regency Niagara Falls and Hyatt Place Niagara Falls — in downtown Niagara Falls, Ontario, by 2022. Notably, these will be the first Hyatt hotels in the Niagara Falls market. The company is quite confident about the success of these hotels as approximately 15 million tourists visit Niagara Falls, Ontario, every year.

In 2019, the company will open Hyatt Place Mississauga Centre in Mississauga, Ontario and Hyatt House Winnipeg South West in Winnipeg, Manitoba. Next year, it plans to open Park Hyatt Toronto (reopening after renovation) in Toronto, Ontario, Hyatt Place Kelowna in Kelowna, British Columbia, Hyatt Place Winnipeg Downtown in Winnipeg, Manitoba, Hyatt Place Moncton in Moncton, New Brunswick, Hyatt Place Brampton in Brampton, Ontario, Hyatt Place / Hyatt House Edmonton Downtown in Edmonton, Alberta and Hyatt Place Ottawa – Bells Corners in Ottawa, Ontario.

Expansion Strategies Bode Well

Hyatt aims to differentiate its brands from one another by providing distinct travel experiences. The company is also consistently trying to expand its presence worldwide and has expansion plans in the Asia-Pacific, Europe, Africa, the Middle East and Latin America. Therefore, an essential aspect of the company’s riveting growth potential is its solid brand presence and continual expansion in higher growth market, and the under-penetrated markets such as India and China.

These apart, the company has announced more expansion plans into diverse international markets including Australia, Brazil, Germany, the United Kingdom, Indonesia, Japan, Mexico, Saudi Arabia, Singapore, Thailand, the Netherlands and others.

Meanwhile, the company’s new signings across its brands globally have consistently outpaced openings and this trend is expected to continue in 2019. In 2018, Hyatt registered net room growth of 13.6% on a year-over-year basis. For the current year, it expects unit growth of roughly 7-7.5%, mirroring 80 new hotel openings.

Zacks Rank & Stocks to Consider

Hyatt has a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in the same space include Huazhu Group Ltd. (NYSE:H) , Red Lion Hotels Corp. (NYSE:H) and Wyndham Destinations, Inc. (NYSE:WYND) . While Huazhu Group sports a Zacks Rank #1 (Strong Buy), Red Lion Hotels and Wyndham Destinations carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Huazhu Group, which was previously known as China Lodging Group Limited, has an impressive long-term earnings growth rate of 20.9%.

Red Lion Hotels’ bottom line for the current year is likely to increase 93.3%.

Wyndham Destinations reported better-than-expected earnings in each of the trailing four quarters, the average being 5.9%.

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