Insight Comment Hyatt has made a number of acquisitions in recent years but missed out on NH Hotels in 2018. Reading between the lines it now seems to be looking at an addition(s) in the resort sector.

Hyatt Hotels Corporation is eyeing up a further push into the resort sector through potential acquisitions.

The hotel company missed out on NH Hotels, which was eventually bought by Minor Hotels in 2018, and deal to buy a company with more of a European focus would make strategic sense.

“We're actively evaluating potential asset acquisitions for strategic purposes,” Mark Hoplamazian, Hyatt’s CEO, said on first-quarter earnings call with analysts.

Despite its failure to buy NH, in recent years the company has made a couple of other acquisitions. In 2017 it bought wellness resort and spa company Miraval Group and in 2018 it spent $480 million on Two Roads Hospitality.

The Two Roads deal in particular was a gamechanger for Hyatt because it helped in its quest to switch to add more leisure-focused options – something that would be further aided by adding more resorts to its portfolio

“[A]s we look into potential opportunities that would be meaningful to us, we're looking to ensure that we've got very compelling resort alternatives for our guests, not just because of the benefits within the World of Hyatt, but because it's been shown, especially in the customer base that we serve, which is a relatively higher customer base, that they are continuously demanding and looking to travel at an elevated rate,” Hoplamazian said.

Back in 2019, Hyatt accelerated its asset-light strategy by announcing it would sell an additional $1.5 billion of real estate assets by 2022. Hoplamazian stressed that any acquisitions would not impact that plan.

“[T]his commitment is based on net proceeds, meaning that any capital spend on acquisitions will be counted against our commitment,” he said.

Q1 Results

Although Hyatt made a pre-tax loss of $118 million in the three months to the end of March, this was actually a 14% improvement on the figures from 2020. Most of this came from aggressive cost cutting. Revenue more than halved to $438 million but expenses fell from $988 million to $593 million.

Revenue per available room – a key hotel industry metric – fell 49% compared to the first quarter of 2020, and was 65% down on 2019’s figure.

Hoplamazian, like others in the industry, is optimistic that things are starting to improve.

"While risks do remain in the management of the pandemic, we are optimistic about continued growth of demand in the coming months and the balance of 2021. The demand levels we saw in March have continued through April. While leisure travel continues to lead the recovery, we are encouraged by positive indicators across other travel segments as well,” he said in a statement accompanying the results.