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Hyatt Hotels Corp H

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Morningstar’s Analysis

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Hyatt’s Demand Is Picking Up Slowly as Its Brand Advantage Remains Stout

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

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.

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Company Profile

Business Description

Hyatt is an operator of 982 owned (7% of total rooms) and managed and franchise (93%) properties across 16 upscale luxury brands, which includes two vacation brands (Hyatt Ziva and Hyatt Zilara), the recently launched full-service lifestyle brand Hyatt Centric, the soft lifestyle brand Unbound, and the wellness brand Miraval. Hyatt acquired Two Roads in November 2018. The regional breakdown as a percentage of total rooms is 67% Americas, 20% Asia-Pacific, and 13% rest of world.

150 North Riverside Plaza, 8th Floor
Chicago, IL, 60606
T +1 312 750-1234
Sector Consumer Cyclical
Industry Lodging
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 37,000