Why Is Hyatt Hotels Stock Is Attracting Investor Optimism?

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H: Hyatt Hotels logo
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Hyatt Hotels

The shares of Hyatt Hotels (NYSE: H) did not incur a sharp decline as broader markets observed a sell-off from rising benchmark oil prices and inflation. Hyatt Hotels is a global hospitality company that manages, franchises, owns, and develops a portfolio of hotels, resorts, and residential and vacation ownership properties around the world. The WHO has been actively exploring the criteria to announce an end to the pandemic which is expected to revive macroeconomic growth in 2022. Thus, Hyatt Hotels’ revenues are likely to touch pre-pandemic levels from better occupancy rates and higher room rents. Trefis highlights the historical trends in Hyatt Hotels’ revenues across key operating segments in an interactive dashboard analysis.

How did Hyatt perform in 2021?

In 2021, Hyatt Hotels reported 46% (y-o-y) growth in total revenues largely assisted by the Owned & Leased and American Management & Franchise segments. The company’s operating segments, Owned & Leased, Americas M&F, ASPAC M&F, EAME/SW M&F, and Apple Leisure Group account for 28%, 57%, 5%, 3%, and 6% of the total revenues, respectively. Tepid travel demand and multiple infectious waves of the pandemic led to a steep decline in the system-wide occupancy rate of Hyatt Hotels in the past two years. However, pent-up demand pushed the occupancy rate to 55% in Q4 2021 – just 15-percentage-points lower than pre-pandemic levels. The company acquired Apple Leisure Group using a combination of cash-on-hand and debt, but plans to repay the debt raises using divestiture proceeds in the coming years. The company ended the year with $315 million of operating cash on $3 billion of total revenues.

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Stock Has Moved In Sync With Broader Markets

H stock declined from levels of around $90 in February 2020 (pre-crisis peak) to levels of around $47 in March 2020 (as the markets bottomed out), implying H stock lost almost 50% from its approximate pre-crisis peak. It observed a strong rally post the broader market sell-off and has reached back to levels of $90 at present – rising by 91% over this period. In comparison, the S&P 500 Index first fell 34% as lockdowns were imposed in many countries and currently almost doubled in value. (related: Strong Domestic Presence A Boon For Hyatt Hotels Stock)

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Mar 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 H Return -7% -5% 64%
 S&P 500 Return -3% -11% 90%
 Trefis MS Portfolio Return -4% -14% 239%

[1] Month-to-date and year-to-date as of 3/16/2022
[2] Cumulative total returns since the end of 2016

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