What Is Hyatt Hotels’ Near-Term Outlook?

The hospitality space has been disrupted by the rise of digital business models aimed at enabling a better demand-supply match. While Hyatt Hotels (NYSE: H) is a leader in the luxury market, the company realizes that it is important to strengthen its presence at the top end of the market in order to offset growing competition, particularly on the basis of price.

We currently have a price estimate of $77 per share for Hyatt Hotels, which is around 10% higher than the current market price. Our interactive dashboard on Hyatt’s Price Estimate outlines our forecasts and estimates for the company. You can modify any of the key drivers to visualize the impact of changes on its valuation.

Hyatt has been shuffling its portfolio by divesting real estate assets in favor of brands such as Two Roads, and has also been forging alliances to complement its current presence.

The biggest disruption to asset-owning service providers has been the rise of aggregators, and hospitality is no different. The likes of Expedia have benefitted the ecosystem by reducing the friction between market participants. However, the rise of Airbnb (and others) has upended the long-standing rules of the industry. Disruption has primarily occurred at the base of the pyramid, while Hyatt has a stronger high-end market presence. Accordingly, the company’s extensive focus on its World of Hyatt platform, coupled with the company’s exclusive alliance with the Small Luxury Hotels of the World (SLH), makes strategic sense. SLH offers Hyatt a broader presence in the European luxury hotel market, where its presence has historically not been as strong. Furthermore, the company has been taking additional steps such as introducing loyalty points (redeemable across its platforms and alliances) and co-branded credit cards, which have seen 25% growth in spending. As Hyatt continues through the process of its portfolio realignment, the company is likely to open up further avenues for long-term growth.

Do not agree with our forecast? Create your own price forecast for Hyatt Hotels by changing the base inputs (blue dots) on our interactive dashboard.