Investors - NOVEMBER 7, 2017

Hyatt to sell $1.5b of properties, sells two hotels for $305m

by Andrea Waitrovich

Hyatt Hotels Corp. officials have plans to sell off $1.5 billion in owned hotels over the next three years to focus more on the company’s fee-based management and franchising operations.

Speaking during the company’s third-quarter earnings call with analysts, president and CEO Mark Hoplamazian said Hyatt is opting for a more “asset-light” strategy.

The asset disposition program will unlock shareholder value, first by monetizing lower-yield higher-multiple assets, whose cash flows are not fairly valued by investors; second, by providing substantial funds for future growth investments and return of capital to shareholders; and third, by accelerating the evolution of Hyatt’s earnings profile toward more fee-based earnings.

In a separate transaction, early in the fourth quarter, the firm sold the Hyatt Regency Scottsdale (Ariz.) and Royal Palms Resort and Spa (Phoenix). These hotels were sold for $305 million, which, when combined with the prior hotel sales and the liquidation of Hyatt’s preferred stock in Playa Hotels, amounts to over $850 million in proceeds to date in 2017.

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