Hyatt soars thanks to Mr & Mrs Smith, Taylor Swift and hotel sales

A major transformation is underway at Hyatt, and it’s pushing the company – which is behind brands like Alila and Park Hyatt – to big profits.

The company reported this week a whopping profit of $522 million, thanks to recent real estate sales and strength from leisure, group and business travel. But Wall Street’s success hasn’t just kept things busy at the Chicago-based hotel giant.

Hyatt leaders this week touted various successes such as the growth of its newly partially integrated — and growing — portfolio. Mr & Mrs Smith luxury and classic hotel. Furthermore, the brand is riding high due to growing travel demand, thanks in part to the world’s most famous singer; it can even make acquisitions of other brands.

“While we expected year-over-year growth to moderate, we are significantly above pre-pandemic levels and see no signs of consumer spending,” said Hyatt CEO Mark Hoplamazian. reduce their leisure travel. He later added: “We remain focused on improving the efficiency of our network by expanding our services in new markets and across more price points for our customers.”

One of the ways Hyatt is looking to expand its offerings is through Mr & Mrs Smith – its booking platform for luxury and boutique hotels. Hyatt acquired it last year. The first batch of more than 700 Mr & Mrs Smith hotels appeared on World of Hyatt earlier this month, as did Hyatt’s partnership with Small Luxury Hotels of the World entering the last days.

Hoplamazian emphasized that Mr & Mrs Smith will bring more choices to Hyatt customers and that more hotels will join the World of Hyatt ecosystem later this year.

“We now have more than twice as many properties available through our alliance with Small Luxury Hotels with offerings in 25 additional countries and hundreds of new markets,” said Hoplamazian. . “We expect to have approximately 1,000 Mr & Mrs Smith properties available through Hyatt and World of Hyatt channels by the end of the year.”

It seems Hyatt leaders think there are opportunities to take these hotels even further as brands.

After the call, Hoplamazian noted that thousands of room nights have been booked since the first batch of Mr & Mrs Smith hotels entered Hyatt’s orbit. There is significant tourist interest in Europe, where Mr & Mrs Smith have a large presence.

Hoplamazian said:

The vast majority are in Europe because that’s where the majority of Mr. and Mrs. Smith’s are, but I was surprised to see that some US markets have very, very unique hotels in markets that we don’t see much of. representative or unrepresentative. I think it’s very clear based on the feedback from hoteliers in the Mr & Mrs Smith network that they too are delighted and maybe a little surprised by the traction we’ve achieved.

He then noted that some hoteliers in the Mr & Mrs Smith network may even decide to build deeper relationships with Hyatt – perhaps signaling an opportunity to convert some guests This independent hotel is part of the well-known Hyatt brand.

Taylor Swift (and other factors) motivate Hyatt

Hyatt begins the new year with growing demand for all three major types of travel: leisure, business and meetings/group events.

Leisure travel revenue grew 7% in the first three months of this year, and package demand in the Americas region is on track to grow 4% in the current quarter ending June 30. The group grew 6% in the first three months of the year, while business travel demand increased 6%.

The surprising number among these is how worldwide business travel demand kicked off the current quarter at Hyatt: Global business travel demand was up 21% from a year ago. This is a sign that tourism demand is growing again, which will certainly push up hotel prices.

Hoplamazian also mentioned Taylor Swift of it allalso.

“Of course, we have to include Taylor Swift, who continues to grow GDP for the world today,” he said. “So she is making an impact in every market she appears in. I see a lot of data and a lot of data points, and I can’t remember when we’ve seen all three of those segments.” [leisure, business and group] went so well.”

What’s next for Hyatt

If you thought Hyatt was done adding brands to its network — later acquired Apple Leisure Group’s all-inclusive resorts network, Dream hotel group and Mr. and Mrs. Smith – you are wrong.

Hyatt is in the process of transitioning to operate more like Hilton and Marriott; in other words, they don’t own many hotels but instead license hotel owners the rights to use their brand. This “asset downsizing” strategy is why Hilton and Marriott tend to be significantly more profitable than their competitors who own many of their own buildings.

Hyatt has poured billions of dollars into real estate in recent years, including the sale of the Hyatt Regency in Aruba, the Park Hyatt Zurich and the Hyatt Regency San Antonio Riverwalk. While these properties may no longer be owned by Hyatt, they remain under Hyatt’s supervision; Each new owner continues its relationship with Hyatt by entering into management agreements with the company.

Moves like these allow Hyatt to focus less on day-to-day real estate ownership and instead pursue growth. This growth comes from strengthening the network with new brands and services to attract more customers into the loyalty system.

For example, Hoplamazian notes that while Dream Hotel Group’s average customer matches the typical spending power of a Hyatt guest, they tend to be on average 20 years younger. Lindner Hotel also has a similar customer profile to Hyatt but has delivered significantly more reach in Germany than the previous World of Hyatt.

Expect more selective, strategic games like this in the future – as long as it doesn’t mean getting back to the business of actually owning a lot of hotel real estate.

“For what it is, yes, there are some opportunities for the brand,” Hoplamazian said. “They tend to be narrower and so we’re seeing some activity on that front, but they’re going to be fewer and farther between. It’s not a very large universe of things that are meaningful to with us.”

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