Please ensure Javascript is enabled for purposes of website accessibility

Why Hyatt Is Expanding in Turkey

By Asit Sharma – Feb 24, 2020 at 3:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The upscale property franchiser is developing a new hotel in the popular resort city of Izmir.

Hyatt (H -2.50%) announced on Monday that one of its affiliates has inked a franchise agreement with Turkey-based hotel developer Orjin Group to open a 161-room property in Izmir, Turkey, under the Hyatt Regency flag in 2021. This will be the global hotelier's first branded property in the tourist destination on Turkey's Aegean Coast.

The hotel, which will be named Hyatt Regency Izmir Istinye Park, will overlook the Gulf of Izmir, and feature 21,500 square feet of flexible event space aimed at both business and leisure travelers.

The Izmir skyline overlooking the sea at dusk.

Image source: Getty Images.

A tactic in a focused strategy

The announcement reflects Hyatt's broad strategy to counter tepid growth in revenue per available room (RevPAR) faced by the hotel industry in recent quarters. The luxury hospitality giant is intent on offsetting lower occupancy and daily rates (the two components of RevPAR) by increasing its global room units. As revealed in its fourth-quarter 2019 earnings last week, Hyatt expanded its available room inventory by 7.5% last year, while widening its total development pipeline by 13%, to roughly 101,000 hotel rooms.

Management cited Europe in last week's earnings conference call as one of the bright spots in Hyatt's fourth-quarter RevPAR growth. Given its expanding economy and status as a geographical bridge between Europe and Asia (thus attracting both leisure and commercial travel business), Turkey is emerging as a focal point in Hyatt's Europe, Africa, Middle East and Southwest Asia segment. The Hyatt Regency Izmir Istinye Park will mark Hyatt's seventh luxury property in Turkey, and its first outside of the burgeoning Istanbul metropolitan area.

Asit Sharma has no position in any of the stocks mentioned. The Motley Fool recommends Hyatt Hotels. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Hyatt Hotels Corporation Stock Quote
Hyatt Hotels Corporation
H
$81.34 (-2.50%) $-2.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
107%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.