Hyatt Hotels Corp H

As expected, the performance of Hyatt’s high-end portfolio (exposed to urban and air travel) lagged that of economy hotels with more exposure to road destinations that have led the rebound in travel demand. But we expect the rate of demand improvement to shift toward Hyatt’s brands (source of its narrow moat) due to increased vaccinations and pent-up demand for travel. That said, we may lower our Hyatt $77 fair value estimate by around $3 per share, to account for lower near-term owned asset margins (as it reopens less profitable properties) and slightly lower 2021 demand, leaving shares slightly overvalued.