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Industry & Co. Overview Hyatt Hotels Corporation “HHC” (NYSE: H) Meghan Shevlin January 15, 2014

Industry & Co. Overview Hyatt Hotels Corporation “HHC” (NYSE: H) Meghan Shevlin January 15, 2014. Industry Overview. Lodging industry is highly competitive with growth mainly in international sectors Franchise in order to expand operations without need for substantial capital

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Industry & Co. Overview Hyatt Hotels Corporation “HHC” (NYSE: H) Meghan Shevlin January 15, 2014

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  1. Industry & Co. OverviewHyatt Hotels Corporation “HHC” (NYSE: H)Meghan Shevlin January 15, 2014

  2. Industry Overview Lodging industry is highly competitivewith growth mainly in international sectors Franchise in order to expand operations without need for substantial capital Start up costs are immense Subject to government regulation regarding marketing, manufacturing and sale of certain products Shift to use of the internet and bargain websites (highly vulnerable to economic downturns)
  3. Industry con’t Chains are sometimes involved in the management of, but not ownership of the hotel and will receive management fees Ownership varies from publicly held companies to individuals Ownership through a REIT is becoming highly popular in order to avoid double taxation REIT’s enable investors to invest in large diversified portfolios of income producing property Use industry unique performance metrics: Average Room Rate Average Food Check
  4. Porter’s Five Forces Model
  5. Hyatt Hotels Corporation Hyatt Brands: Grand Hyatt, Hyatt Regency, Park Hyatt etc. Mostly Luxury and upscale hotels but also provide extended stay and residential options Worldwide portfolio of 500 properties (135,144 rooms) in 46 countries Year ended Dec 31, 2012 revenue of $3.9 billion and $1.4B borrowing capacity 79.5% revenue attributable to operations in the United States Hyatt Gold Passport: guest loyalty program to attract new customers and to demonstrate loyalty to best guests accounted for 33.5% of total room nights in 2012
  6. HHC con’t Increase market presence by entering new management and franchising agreements Increase franchising in order to gain access to capital from developers and property owners that target franchise business opportunities HHC collects management fees, franchise fees related to these agreements Has never declared or paid cash dividends in order to further develop and expand business
  7. HHC con’t Business life-cycle stage With operating cash flows being positive and both investing and financing cash flows being negative, HHC is in a Maturebusiness cycle Operates in 20 of the 25 most populous urban centers and continues to search for new opportunities
  8. SWOT Analysis Internal Factors External Factors
  9. Conclusion Hyatt Hotels is a global company with highly regarded and recognized brands that have been serving loyal customers for over fifty years Taking innovative measures to deal with environmental concerns, technology improvements and updating facilities Actively seeking expansion and alternative franchising opportunities
  10. Sources Hyatt Hotel Corporation Annual Report 2012 Hyatt Hotel Corporation Investor Fact Book 2012 http://www.irs.gov/Businesses/Hotel-Industry-Overview---Complete-Version#3
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