Like many other capital-intensive hotel businesses, Hyatt Hotels (NYSE:H) is leveraging its asset base to unlock value for shareholders. Key to the investment thesis is a shift from exclusively-owned and operated hotels towards a blended approach, which includes a managed/franchise model that allows Hyatt to collect high-margin fees and offload the capital-intensive parts of the business to the hotel owners.
The results have been impressive since Hyatt's IPO in 2009. Adjusted EBITDA increased at a 14% compound annual growth rate ("CAGR") to $680 million in 2013, and operating margins on the owned/operated hotels expanded from 18% to 24%. The number of managed hotels increased 100% to 240 hotels at year-end 2013, and the composition of EBITDA is shifting...
|FREE||SA PRO MEMBERS|
|IDEA GENERATOR||X||Exclusive access to 10 PRO ideas every day|
|INVESTING IDEAS LIBRARY||X||Exclusive access to PRO library of more than 15,000 ideas|
|SECTOR EXPERT NETWORK||X||Exclusive access to all sector experts for direct consultation|
|PERFORMANCE TRACKING||X||Track performance of all PRO stock ideas|
|PROFESSIONAL TOOLS||X||Professional Idea Filters to zero-in based on industry, market cap and more|