CHICAGO & PALMA DE MALLORCA, Spain - Hyatt Hotels Corporation (NYSE: NYSE:H) has unveiled plans for a strategic joint venture with Grupo Piñero, aiming to manage and own the Bahia Principe-branded hotels and resorts. The collaboration, expected to close in the upcoming months, will see Hyatt's all-inclusive room portfolio grow by approximately 30%.
The 50/50 joint venture, based in Palma de Mallorca, Spain, will include 23 resorts totaling over 12,000 rooms. These properties, spanning the Dominican Republic, Mexico, Jamaica, and Spain, will become part of Hyatt's Inclusive Collection. Grupo Piñero will use a majority of the transaction's proceeds to enhance existing Bahia Principe resorts.
Mark Hoplamazian, President and CEO of Hyatt, highlighted that the venture will solidify Hyatt's leadership in the all-inclusive market and create new opportunities for guests and hotel owners within the portfolio. Encarna Piñero, Global CEO of Grupo Piñero, expressed that the partnership with Hyatt will strengthen Bahia Principe's legacy and support its growth strategy.
Julio Pérez, currently CEO of Bahia Principe, is set to lead the joint venture's management company following the deal's closure, with Encarna Piñero taking the role of Chairman of the Board.
The agreement is part of Hyatt's broader strategy to expand its management and franchise services while reducing its real estate asset base. Bahia Principe Hotels & Resorts is also expected to join the World of Hyatt loyalty program at a future date.
Hyatt Hotels Corporation, with a portfolio of over 1,350 properties in 78 countries, and Grupo Piñero, a Spanish tourism group with nearly 50 years of history, both emphasize a commitment to responsible business practices and sustainability.
This news is based on a press release statement and includes forward-looking statements that involve risks and uncertainties. These statements reflect the Company's current expectations and are subject to change.
In other recent news, Hyatt Hotels Corporation has seen a flurry of analyst activity. CFRA downgraded the company's stock from Buy to Hold, albeit with a raised target price of $155. This decision was influenced by recent stock performance and valuation concerns. The firm maintained its earnings per share (EPS) estimates for Hyatt at $4.04 for 2024 and $4.55 for 2025.
Baird has adjusted Hyatt's stock target to $157 while maintaining a Neutral rating. Other firms including Goldman Sachs, Jefferies, Stifel, and JPMorgan have offered assessments, with price targets ranging from $151 to $165.
In other financial developments, Hyatt announced a substantial share repurchase of $250 million worth of Class B shares from the Margo and Tom Pritzker Foundation. Upon completion, approximately $982 million will remain under Hyatt's current repurchase authorization.
Hyatt has also decided to implement the Oracle (NYSE:ORCL) OPERA Cloud platform across its global hotel portfolio, aiming to standardize operations and enhance data management. This move aligns with Hyatt's strategic transition towards an asset-light business model, further emphasized by the sale of the Orlando Hyatt Regency and the acquisition of Standard International. These are the recent developments at Hyatt Hotels Corporation.
InvestingPro Insights
As Hyatt Hotels Corporation (NYSE: H) embarks on this strategic joint venture with Grupo Piñero, investors may find valuable insights from recent financial data and expert analysis. According to InvestingPro, Hyatt's market capitalization stands at $15.51 billion, reflecting its significant presence in the hospitality industry.
The company's impressive gross profit margin of 68.06% for the last twelve months as of Q2 2024 aligns with one of the InvestingPro Tips, which highlights Hyatt's "impressive gross profit margins." This strong profitability metric suggests that Hyatt is well-positioned to invest in growth initiatives like the Bahia Principe joint venture while maintaining financial health.
Another relevant InvestingPro Tip indicates that Hyatt "operates with a moderate level of debt." This conservative financial approach could provide the company with the flexibility needed to pursue strategic expansions, such as the newly announced joint venture, without overextending its balance sheet.
Investors should note that Hyatt's stock has shown a robust performance, with a one-year price total return of 56.36% as of the latest data. This aligns with the InvestingPro Tip highlighting a "high return over the last year," suggesting that the market has been responding positively to Hyatt's strategic moves.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips that could provide further insights into Hyatt's financial position and market performance.
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