Hyatt Hotels Corp., controlled by the billionaire Pritzker family of Chicago, is in talks to sell some properties as it weighs purchases in the most attractive markets for expanding its brands, CEO Mark Hoplamazian said Tuesday.
“We’re active in discussions on a couple different situations on the disposition side and likewise, we’re continuing to see really interesting opportunities on the acquisition side,” Hoplamazian said on Hyatt’s second-quarter earnings conference call.
Hyatt in June sold the luxury Andaz 5th Avenue in Manhattan to Japan’s Takenaka Corp. for $250 million.
The property generated about $10 million of earnings before interest, taxes, depreciation and amortization on a trailing basis, a portion of which will be retained through Hyatt’s management agreement for the hotel, Hoplamazian said.
“I don’t think any other hotel company uses their balance sheet nearly as much to spread their brand,” said David Loeb, a senior analyst at Robert W. Baird & Co. “Hyatt has great name recognition globally, but a much, much smaller footprint than the other major global brands. They punch above their weight.”
The Andaz deal and other potential Hyatt sales come as hotel companies cope with decelerating growth in revenue per available room, an industry measure of occupancy and room rates, following a six-year recovery from the financial crisis.
Hyatt on Tuesday cut its forecast for growth this year to between 2 percent and 3 percent, from a previous range of 3 percent to 5 percent, an estimate that was given at the beginning of the year.
