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.
