Hyatt Hotels Is Late In Its Move To Asset-Light Status, Raymond James Says

During its first investor day in three years, Hyatt Hotels Corporation (NYSE:H) announced plans to sell assets. While the move is positive ,the company’s peers Hilton Hotels (NYSE:HLT) and Marriott International Inc (NASDAQ:MAR) have already achieved asset-light status, according to Raymond James.

The Analyst

Raymond James' William A. Crow maintains a Market Perform rating on Hyatt Hotels.

The Thesis

In a bid to shift toward an asset-light model, Hyatt Hotels announced a new three-year disposition target of $1.5 billion, Crow said in a Thursday note. 

The hotel chain intends to use the disposition proceeds to acquire asset-light platforms as well as for share repurchases, the analyst said.

Even with this move, the focus remains on high-end consumers and on personalizing guest experiences to drive brand loyalty and revenue, Crow said. 

Although Hyatt's plans are positive, the company and its stock are likely to be impacted by a slowing U.S. and global economy, Crow said. 

“We also remain less excited about Hyatt’s ongoing investments in wellness and 'experiential' businesses, at least until we better understand the economic benefits to Hyatt shareholders." 

Raymond James hopes for greater visibility into Hyatt's disclosures and outlook, as “relatively little guidance has historically led to volatility around quarterly earnings," the analyst said. 

Price Action

Hyatt Hotels shares were down 0.77 percent at $72.48 at the time of publication Friday. 

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