Though hotels are slumping, Hyatt preps for IPO

Squabbling heirs—and carefully laid plans to maintain family control—are among the reasons for the luxury hotel chain's timing

It has been a stock offering investment bankers have been drooling over for decades. Hyatt Hotels has a prominent brand name and a multibillion-dollar market value. On Aug. 5 the privately held company filed with federal regulators to begin the process of selling shares to the public.

Yet the question on many hotel industry insiders' minds is: Why now, when the travel industry is in the middle of one of its worst slumps in decades? At a recent meeting of executives in Chicago, Hyatt Chairman Thomas J. Pritzker publicly bemoaned the sorry state of the travel industry, noting that even well-to-do travelers are trading down to lower-priced hotels. "Lodging share prices today are generally no more than half of their peak levels from 2006-2007," says Michael Paladino, a hotel industry analyst at Fitch Ratings. The answer lies with Chicago's Pritzker family, which controls 85 percent of the company through family trusts.

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