Hyatt Has Had a Good Year, But Stock Still Drops After New Guidance

Hyatt reported a relatively in-line 3Q but they lowered 4Q adjusted EBITDA guidance. What we think hurt the stock (down more than -6%) is the lowered unit growth outlook for this year. They had previously guided to 5.5% to 6% growth but lowered that to 4% to 4.5%. Some of the rooms are delayed into 2025, conversion deals are taking longer than they expected, and they have seen more attrition than normal as brand standards are impacting renewals. H is also going to pay more income tax than expected, and free cash flow guidance was reduced. Hyatt also has been like Hilton and Marriott, a very strong stock performer this year, so any hint of disappointment was going to be met with heavy profit-taking.

Pebblebrook Hotel Trust gave a hurricane impact update, and the impact is worse than was expected. LaPlaya Beach Resort & Club in Naples, FL seems to be the most impacted, partially closed after Hurricane Helene and fully closed after Hurricane Milton. PEB expects to reopen