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Hyatt Hotels: Encouraging RevPAR Rebound And China Exposure

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Hyatt Regency Hotel

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Investment Thesis: I return a bullish position connected Hyatt Hotels Corporation (NYSE:H) based connected beardown RevPAR maturation and its vulnerability to nan reopening of nan Greater China market.

In a erstwhile article past month, I made nan statement that Hyatt Hotels could beryllium poised for further maturation from here, connected nan ground of beardown RevPAR maturation crossed its luxury brands successful spite of inflationary pressures, arsenic good arsenic nan lifting of COVID restrictions successful China providing a further boost to wide growth.

Since my past article, nan banal is up by conscionable complete 8%:

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The intent of this article is to measure whether nan maturation we person been seeing for Hyatt Hotels tin proceed from present - peculiarly taking caller quarterly capacity into consideration.

Performance

Hyatt Hotels has continued to spot RevPAR (revenue per disposable room) spot a beardown rise crossed its brands. For instance, nan Park Hyatt (which was Hyatt's astir costly marque by ADR arsenic of Q4 2022) showed beardown maturation to $267.85 for Q4 2022 - which was importantly higher than nan $223.65 for Q3 2022 and higher still than nan $197.28 recorded for Q4 2021:

Figures originated from Hyatt Hotels Quarterly Earnings Reports (Q1 2019 to Q4 2022). Heatmap generated by writer utilizing Python's seaborn library.

Figures originated from Hyatt Hotels Quarterly Earnings Reports (Q1 2019 to Q4 2022). Heatmap generated by writer utilizing Python's seaborn library.

Moreover, nan jump successful nan astir caller 4th was peculiarly awesome fixed that ADR (average regular rate) had jumped from $369.44 to $435.88 complete this period. This indicates that moreover pinch rising prices - nan Park Hyatt is still capable to bolster booking request to turn wide RevPAR.

For Hyatt's brands arsenic a full - we tin spot that Q4 2022 saw a important summation successful RevPAR maturation arsenic compared to 2021 - moreover pinch ADR rising complete nan aforesaid period:

 Q4 2022 Earnings Release

Hyatt Hotels Corporation: Q4 2022 Earnings Release

From this standpoint, nan truth that RevPAR maturation has remained resilient successful nan look of ostentation is encouraging, and I return nan position that Hyatt Hotels has nan capacity to turn gross further going forward.

In addition, it is notable that Hyatt Hotels has a mostly vulnerability to Greater China successful position of hotels and rooms.

 Q4 2022 Earnings Release

Hyatt Hotels Corporation: Q4 2022 Earnings Release

In this regard, Greater China has important imaginable for further gross maturation pursuing nan lifting of COVID restrictions astatine nan opening of this twelvemonth - arsenic compared to nan U.S. and Europe, wherever booking request has already been rebounding complete nan past 2 years.

As such, I return nan position that Hyatt Hotels still has important scope for further maturation successful RevPAR.

Additionally, erstwhile comparing Hyatt Hotels pinch that of competitors Hilton Worldwide Holdings (HLT) and Marriott International (MAR), we tin spot that Hyatt is trading astatine a somewhat higher ratio to that of Hilton, but astatine a little ratio to Marriott:

P/E Ratio Comparison

Hotel Price Diluted EPS (12 months ended 2022) P/E Ratio
Hyatt Hotels 90.45 4.09 22.11
Hilton Worldwide Holdings 126.36 4.53 27.89
Marriott International 148.89 7.24 20.56

Source: Prices astatine adjacent of 30th December 2022 originated from nasdaq.com. Diluted EPS figures for full-year 2022 originated from Q4 2022 net reports for nan 3 companies successful question. P/E ratio calculated by author.

From nan above, Hyatt Hotels does not show immoderate signs of being overvalued astatine this clip - fixed that its P/E ratio is trading wrong nan scope of that of its competitors.

Risks

From a macroeconomic standpoint, nan main consequence for Hyatt Hotels astatine this clip is that should prices proceed to emergence - past location will invariably travel a constituent whereby maturation successful request will commencement to plateau. While I return nan position that Hyatt Hotels still has further room for maturation fixed nan "reopening" of nan Chinese marketplace - a plateau successful request crossed nan United States and Europe could limit RevPAR maturation going forward.

Looking Forward

Going forward, I expect that investors will proceed to salary important attraction to RevPAR maturation and whether nan rebound we person been seeing tin proceed - peculiarly that of Greater China.

Given that RevPAR crossed luxury brands specified arsenic Park Hyatt has continued to summation passim nan wintertime months - I americium cautiously optimistic that this inclination tin proceed heading into nan summer.

Conclusion

To conclude, Hyatt Hotels has shown beardown RevPAR maturation and its vulnerability to nan reopening of nan Greater China marketplace could mean that important maturation imaginable remains. From this standpoint, I return a bullish position connected Hyatt Hotels Corporation.

This article was written by

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I americium an independent investor pinch an liking successful analyzing stocks crossed nan consumer, finance, telecommunication, and recreation sectors. As a information scientist, I besides person a awesome liking successful utilizing information devices to amended understand a company's financial position.Some examples include:- Aggregating quarterly churn and ARPU information for Deutsche Telekom (DTEGY) and analysing trends complete clip utilizing SQL: https://seekingalpha.com/article/4516805-deutsche-telekom-growth-potential-remains- Building a Monte Carlo simulation successful Python to analyse nonaccomplishment ratios for Zurich Insurance Group (ZURVY): https://seekingalpha.com/article/4459821-zurich-insurance-stock-solid-insurance-company-still-faces-risks- Examining ADR and RevPAR trends by marque for Hilton Worldwide Holdings (HLT) utilizing SQL: https://seekingalpha.com/article/4517248-hilton-worldwide-holdings-an-analysis-of-adr-and-revpar-trendsDisclaimer: All of nan author's articles are written connected an "as is" ground and without warranty. They correspond nan author's sentiment only and successful nary measurement represent master finance advice. It is nan work of nan scholar to behaviour their owed diligence and activity finance proposal from a licensed master earlier making immoderate finance decisions. The writer disclaims each liability for immoderate actions taken based connected nan accusation contained successful immoderate articles published.

Disclosure: I/we person a beneficial agelong position successful nan shares of HLT either done banal ownership, options, aliases different derivatives. I wrote this article myself, and it expresses my ain opinions. I americium not receiving compensation for it (other than from Seeking Alpha). I person nary business narration pinch immoderate institution whose banal is mentioned successful this article.

Additional disclosure: This article is written connected an "as is" ground and without warranty. The contented represents my sentiment only and successful nary measurement constitutes master finance advice. It is nan work of nan scholar to behaviour their owed diligence and activity finance proposal from a licensed master earlier making immoderate finance decisions. The writer disclaims each liability for immoderate actions taken based connected nan accusation contained successful this article.

Editor: Naga



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