Morningstar Rating

Stock Research and Analysis

by Adam Fleck, CFA

Bulls Say

The U.S. hotel market is benefiting from demand outstripping supply, with the number of hotel rooms currently increasing at less than 1% a year, compared with a long-term average of over 2.5%.
The company is underpenetrated internationally relative to competitors and has a strong pipeline of hotels in emerging markets.
The company is positioned to outperform other global hotel operators in 2014, due to its limited exposure to Europe and its focus on the upscale segment, which is expected to grow faster than the midscale and economy segments. Read more 

Bears Say

Hyatt's returns on invested capital have averaged in the low single digits the last five years, significantly lower than ROICs for competitors.
The Pritzkers have a lock on control of the company, and it's virtually impossible for minority shareholders to effect needed change in the management suite or board of directors.
The company overpaid for the LodgeWorks acquisition, with the purchase price at a rich next-year enterprise value/EBITDA multiple of over 16 times, implying a first-year cash-on-cash return (EBITDA/investment) of only 6.2%. Read more 

Management

Hyatt, founded by Jay Pritzker in 1957, is still under significant influence from the Pritzker family. CEO Mark Hoplamazian has been at the helm since December 2006 and also serves as vice president of the Pritzker Organization, an advisory firm run   Read more 

Profile

Hyatt is an operator of upscale luxury owned, managed, and franchised hotels. As of December 2013, it operated 548 properties in more than 40 countries. The company's Hyatt   Read more 

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