Hyatt continues to see demand from travelers and owners

While lower consumer savings rates may weigh on industry demand in the short term, we see Hyatt’s brand intangibles—the primary source of its narrow moat—strengthening over the long term. Hyatt’s growing brand advantage is evident in growth of its managed and franchised divisions, which has averaged more than 10% annually over the past 10 years (2014-2023), significantly outpacing long-term U.S. industrial supply growth of 2%, according to STR. . We expect Hyatt to increase its share of rooms and revenue in the hotel industry over the next decade, driven by new brands such as House, Place, Apple Leisure Group and Studios, which will support the brand’s intangible advantage. We forecast the company’s supply to grow at an average rate of 5% per year over the next decade, which is higher than our projected 1-2% supply growth for the U.S. industry over that period. We are positive about Hyatt’s long-term competitive advantage and believe the company’s global presence in luxury, upscale and upscale services will position it to outperform industry demand in 2024 as improvements in international and group travel improve the sustainability of leisure travel.