Hyatt (H) is an upscale property chain whose hotel and resort portfolio boasts more than 500 properties in 46 countries under the Park Hyatt, Andaz, Hyatt, Grand Hyatt, Hyatt Regency, Hyatt Place and Hyatt House names.
With 45% of its revenue derived from groups, Hyatt has taken it on the chin thanks to the impact of sequestration on federal government business. Group room revenue slipped by 6% in the first quarter — although business travel offset some of those challenges.
Hyatt’s fundamentals resemble those of a mature public utility — its PEG ratio is a whopping 4.8 and its forward P/E is 39, the highest among major publicly traded hotel chains. And worse — Hyatt doesn’t offer any income to compensate.
Meanwhile, Hyatt faces strong competition for business travelers, which is likely to heat up.