Baron Focused Growth Fund Expects Hyatt Hotels Corporation’s (H) Discount to Narrow Amid Rising Investor Optimism

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A copy of the letter can be downloaded here. The Baron Focused Growth Fund® (the Fund) experienced a challenging start to 2026, declining 4.99% (Institutional Shares) compared to a 3.52% drop in the Russell 2500 Growth Index (the Benchmark). Concerns regarding the influence of AI on the portfolio and the potential effects of the conflict in Iran on inflation, interest rates, and consumer spending have impacted the Fund’s performance this quarter. The Fund continues to focus on long-term investments in growth-oriented businesses with competitive advantages and manages a balanced portfolio of uncorrelated businesses to reduce risk and aim for strong excess returns. As of March 31, 2026, the top 10 holdings represented 58.4% of net assets. In addition, please check the Fund’s top five holdings to know its best picks in 2026.In its first-quarter 2026 investor letter, Baron Focused Growth Fund highlighted stocks such as Hyatt Hotels Corporation (NYSE:H). Hyatt Hotels Corporation (NYSE:H) is a leading hospitality company that operates through Management and Franchising, Owned and Leased, and Distribution segments. On April 24, 2026, Hyatt Hotels Corporation (NYSE:H) stock closed at $164.26 per share. Hyatt Hotels Corporation (NYSE:H) delivered a 17.37% return in the past month, and its shares gained 45.65% over the past twelve months. Hyatt Hotels Corporation (NYSE:H) has a market capitalization of $15.52 billion.Baron Focused Growth Fund stated the following regarding Hyatt Hotels Corporation (NYSE:H) in its Q1 2026 investor letter:"Shares of global hotelier Hyatt Hotels Corporation (NYSE:H) declined 10.3% and hurt performance by 37 bps in the first quarter as investors were concerned with a potential deceleration in revenue per available room (RevPAR) growth due to the Middle East conflict as well as cartel uprisings in Mexico that could hurt travel to those parts of the world. However, according to Hyatt management, the Middle East is only 3% of total fees and Mexico while it is approximately 7% of global rooms, they are seeing travelers switch and rebook for other places. While they are seeing declines in Mexico bookings, this is being offset by an increase in bookings for its Caribbean properties. There has been no impact on unit growth, and the company still expects to grow units between 6% and 7% this year. We believe this growth combined with low single-digit RevPAR growth and slight margin improvement should lead to double digit EBITDA growth this year. This should generate strong free cash flow, which the company can use for further share buybacks and reinvestment back into the business. The company still has a strong investment grade balance sheet with 90% of the business coming through fees that should allow them to overcome any short-term outside disruptions to its business. Hyatt trades at a discount to peers despite a similar growth and mix of business. We believe this discount should narrow over time as investors see the continued growth and resilience of its business model."Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info