Hyatt slides as room-growth outlook disappoints, Mideast and Mexico pressures linger
H•Hyatt cuts full-year room growth outlook
Shares of Hyatt Hotels
fell 9% on Thursday after the company lowered its annual net rooms growth forecast, and flagged a hit from the Middle East conflict and unrest in Mexico during the second quarter.
The Chicago-based hotel operator now expects full-year net growth in rooms of about 6%, compared with its previous forecast of 6% to 7%.
Middle East conflict and Mexico unrest weigh on growth
Like rival Hilton
, Hyatt saw strength in its luxury and upper upscale brands but said geopolitical tensions in the Middle East shaved off about 110 basis points from second-quarter room revenue growth.
Resilient travel demand especially from affluent guests, along with a short-term boost from the FIFA World Cup, has helped hotel operators offset revenue drags from international operations.
Hyatt, however, signaled pressure in Mexico after a wave of violence swept the region earlier this year following the killing of cartel boss "El Mencho," saying booking trends had improved sequentially but the recovery was "slower than previously anticipated."
Analysts point to valuation impact from slower openings
CEO Mark Hoplamazian said Hyatt was taking a measured view on the timing of openings later this year.
"The better-than-expected quarter and accelerating revenue per available room (revPAR) growth for rest of the year are offset by the deceleration in net unit growth for 2026, which should result in a negative reaction in the shares," said Jefferies analyst David Katz.
The room growth metric was a more prominent driver of valuation for Wall Street than revPAR, and was likely to draw an "outsized reaction", Katz added.
