Key facts
- Hyatt Hotels shares fell 9% on Thursday.
- The company lowered its annual net rooms growth forecast to approximately 6%.
- Geopolitical tensions in the Middle East impacted second-quarter room revenue growth.
- Unrest in Mexico also contributed to slower-than-anticipated booking trends.
- Analysts highlighted the reduced net rooms growth forecast as a primary driver for the stock's decline.
Hyatt Hotels shares declined 9% on Thursday after the company reduced its full-year net rooms growth forecast to approximately 6%, down from a previous outlook of 6% to 7%. The company cited geopolitical tensions in the Middle East, which shaved about 110 basis points from second-quarter room revenue growth, and a slower-than-anticipated recovery in Mexico due to regional unrest.
CEO Mark Hoplamazian indicated a measured approach to future openings. Analysts from Jefferies and J.P. Morgan pointed to the reduced net rooms growth forecast as the primary driver for the stock's negative reaction, noting that this metric is a significant valuation driver for Wall Street.
Despite these pressures, Hyatt experienced strength in its luxury and upper upscale brands, and overall travel demand, particularly from affluent guests, has remained resilient. The company's shares were trading around $168, having gained nearly 12% year-to-date prior to Thursday's decline.