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Hyatt Hotels Corporation: an expensive transformation story

09/16/2021| 5:41:47 PM| 中文

The hospitality behemoth is disposing of real estate and using the cash to fund acquisitions focused on resort management.

Hyatt Hotels has become a very interesting case study within the hospitality industry. After weathering the Covid-19 storm, the company has undertaken a series of initiatives to make the most out of the expected recovery in travel and tourism as well as transform its balance sheet completely.

On the verge of bankruptcy, the company has been actively divesting properties to increase its liquidity and transform into a more asset-light business model. As per their last report, they already had close to $1.7 billion in cash and short-term investments which is being used to fund the acquisition of asset-light hospitality player Apple Leisure. There is a lot changing with Hyatt, which could make in an interesting opportunity, in my opinion.

Hyatt Hotels is the world's largest owner and operator of hotels. The company is headquartered in Chicago, Illinois, which is the home of the Pritzker family who owns close to 59% of the company’s stock and about 90% of the voting power. Hyatt was founded way back in 1957 and is one of the top names in the global hospitality industry today. However, since virtually all of the voting power is in the hands of the Pritzker family, investors don't really have any control over the compay's direction, which could pose an additional risk.

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TAGS: M&A | Hyatt | resorts | asset-light model
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