(H) Hyatt Hotels Boosts Indian Presence

Chicago-based Hyatt Hotels Corporation (H) recently announced that one of its affiliates has entered into management contracts for two new hotels in India. Financial terms of the deal were not disclosed. The two new hotels bring the total number of properties now under construction or development for Hyatt to 56 in India.

One of the new hotels named Andaz Gurgaon will open under its Andaz brand in Gurgaon, the industrial and financial center of the state of Haryana. Another hotel named Grand Hyatt Kochi will open under the brand Grand Hyatt in Kochi, one of the hottest tourist destinations in India. Both the hotels are strategically located and will further boost Hyatt’s presence in India.

The new hotel, Andaz Gurgaon, will comprise 275 guest rooms and 75 serviced apartments along with other amenities like multi-cuisine restaurant, a bar and a gourmet store, a spa, a fitness center and a swimming pool. The other hotel Grand Hyatt Kochi will include 250 guest rooms and all the luxurious facilities to provide best-in-class customer experience. Andaz Gurgaon hotel is expected to open in the later half of 2014 and Grand Hyatt Kochi hotel is slated to come up in the beginning of 2017.

Apart from these, Park Hyatt Chennai, Hyatt Place Hampi and Hyatt Place Pune, Hinjewadi are slated for launch later this year.

The demand for hotels is greater in the international market than in the U.S., particularly in the Asia-Pacific region, where the pace of economic recovery is particularly fast. Apart from the Chinese market, hoteliers are expecting India to offer significant growth potential. In the Indian market, demand for hotels considerably outpaces the supply. Additionally, India is expected to experience a meaningful increase in gross domestic product within the next few years. Thus, we expect Hyatt to benefit considerably from this strategic expansion going forward.

Hyatt emerged in India nearly 30 years back. Since then, the company has focused on driving brand preference by providing full portfolio of brands and extensive service in Indian large as well as mid-sized markets. The hotelier sees significant opportunities for growth in India, which still remains considerably untapped.

However, the company faces stiff competition in India from major hoteliers like InterContinental Hotels Group (IHG), Marriott International Inc. (MAR) and Starwood Hotels & Resorts Worldwide Inc. (HOT), all of which are on track to beef up their Indian portfolios.

Hyatt, a leading global hospitality company, owns, develops, manages and franchises Hyatt-branded hotels, resorts, residential and vacation ownership properties throughout the world. The company operates under the brands – Hyatt, Park Hyatt, Andaz, Grand Hyatt, Hyatt Regency, Hyatt Place, Hyatt House, Hyatt Residences and Hyatt Vacation Club. As of March 31, 2012, Hyatt’s portfolio consisted of 488 properties in 45 countries worldwide.

Hyatt Hotels will likely release its second quarter 2012 earnings on August 1, 2012. The Zacks Consensus Estimate for the second quarter is pegged at 23 cents per share.

Hyatt currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. We are also maintaining our long-term “Neutral” recommendation on the stock.
Read the full analyst report on “HOT”
Read the full analyst report on “MAR”
Read the full analyst report on “IHG”
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