Hyatt Hotels Corporation (NYSE:H)’s CEO Mark Hoplamazian has remarked that New York will provide a steady supply of guests for the next two decades for the company in an interview on Bloomberg Television’s “Market Makers”.
The interview with the Hyatt Hotels Corporation (NYSE:H) president and chief executive officer was done on the heels of the company unveiling its newest luxury hotel in New York, the Park Hyatt New York. Rates at the newest Hyatt luxury hotel in New York is said to range on the average from about $800 to $1,200.
“The supply referenced that is coming into New York is not really to be measured in the coming couple of years but the coming couple of decades. This is a city that’s extremely vibrant with a business base and a tourist base that will continue to support our industry in a significant way,” the president and CEO said.
He also noted how Hyatt Hotels Corporation (NYSE:H) was underrepresented in New York in the past but now has a total of eight properties in the city. Talking about the Park Hyatt New York, he said that the hotel is emblematic of the company’s plan to grow not only its Park brand but the company as a whole.
The company’s top executive noted at a later part of the interview how the Park Hyatt is being considered by his company as their flagship hotel in New York City and the region. Nonetheless, he said that the company practices three ways to grow. Those are to own hotels, another is to manage hotels and another is to franchise hotels. If in the future, the strategy to sell Park Hyatt New York and recycle that capital into new properties does align with the company’s vision, Hoplamazian said that the company may sell the hotel.
However, it does seem that Hyatt Hotels Corporation (NYSE:H) is very happy with their projected return on invested capital for the Park Hyatt New York, which was said to have cost the company about $2 million per room.
“We expect total rate of return in the high single digit range. For a mid-town Manhattan location, in an extremely iconic building and location with I think what will prove to be a clear timely and iconic hotel, that’s a very, very good return from our perspective,” Hoplamazian said.
Meanwhile, the president and CEO also was very positive about growth saying “there’s actually a lot more growth ahead of us.” He said that the cycle for the industry has been slow and steady instead of rapid and very robust from the get-go. However, he said that more and more groups are doing business with their company as opposed to just individual customers in the past.
Watch Hoplamazian discuss the company’s plans in other regions as well as how the company plans to use its cash in the future.
Martin Whitman’s Third Avenue Management is an investor in Hyatt Hotels Corporation (NYSE:H). The hedge fund reported 464,262 shares in the company by the end of the first half of the year.