Hyatt Is Seeing Demand Growth in 2024, Helped by Resilient Leisure and Recovery Group Travel

We see Hyatt’s brand intangible asset—the source of its narrow moat rating—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 lift of 2%, according to Smith Travel Research data. We expect Hyatt to expand room and revenue share in the hotel industry over the next decade, buoyed by a newer brands like House, Place, Apple Leisure Group, and Studio, supporting its intangible brand advantage. We see the company’s room growth averaging over 5% annually over the next decade, above the 1%-2% supply increase we estimate for the U.S. 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.