NEW YORK (Reuters) – Investors snapped up the shares of Hyatt Hotels Corp in their debut Thursday, enticed by the company's strong balance sheet and prospects for a robust rebound in the lodging industry in the next two years.

Hyatt shares surged more than 12 percent to $28.10 in afternoon trading on the New York Stock Exchange. The stock had priced at $25 yesterday evening, within the expected range.

"The hotel industry is going to witness a significant recovery in the outer years, despite the fact that the short- term operating fundamentals will remain very, very challenging," said John Arabia, a lodging analyst with Green Street Advisors.

The $950 million initial public offering of Hyatt is this second-largest on the NYSE this year after Banco Santander. It is the 18th IPO on the exchange this year.

The surge in Hyatt shares "instills some much-needed confidence back into an IPO market that has had three deals in one week postponed," said Scott Sweet, a senior managing partner at advisory firm IPO Boutique.