Hyatt has added a host of new brands. Now comes the hard part: maintaining the old ones

If there’s anything we can all learn from Madonna, it’s this: You have to constantly reinvent yourself to stay ahead of the game, otherwise the constant churn of young men can holding a half-tone will certainly threaten your crown.

Some people (okay — maybe just the hotel reporter who wrote this story) might argue that Hyatt has followed the Material Girl’s lead in recent years with its own brand strategy.

Although the company was known for decades as a high-end hotel chain catering to business travelers, it has finally begun to reinvent itself as a luxury and lifestyle powerhouse with brands such as Alila, Andaz and Thompson Hotels. Notable openings in the past quarter include Park Hyatt London Thames River And Alila Shanghai.

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The regeneration continued in recent years with a more distinctive luxury play with acquisitions Mr & Mrs Smith booking platform. Now, Hyatt has ventured into all-inclusive resorts with the addition of a network of brands such as Apple Leisure Group’s Secrets and Dreams, and announced a planned joint venture earlier this month with the company parent company of Bahia Principe Hotels & Resorts. Hyatt also beefed up its lifestyle hotels earlier this year with the announcement that it would absorbing Standard International’s brand network including The Standard Hotel and Bunkhouse.

Hyatt’s overall development pipeline accounts for more than 40% of the company’s current hotel rooms.

“Our opening brings more opportunities for guests and members to engage with us,” Hyatt CEO Mark Hoplamazian said Thursday morning during the company’s earnings call. while our growing pipeline allows us to expand into new markets in the future.”

But even this agile Chicago-based hotel giant sometimes faces headwinds and – gasp – has to consider whether it should do what its competitors are doing. do or not.

While the company reported a whopping third-quarter profit of $471 million on Thursday, an investor call showed many analysts were curious about the higher-than-normal number of rooms leaving Hyatt’s orbit. Hoplamazian said some of this is due to Hyatt’s strict brand standards and owners’ unwillingness to keep up with modern requirements for older properties.

“I would say some of that is because the market has become more challenging or where the central business district has shifted,” the Hyatt CEO told investor analysts on Thursday morning. gone and we are looking for a new representative.” “In some cases, the owners with whom we have failed to reach an agreement on bringing the hotel up to brand standards. So part of that has to do with discipline and maintaining standards as well as enhancing the quality of our portfolio.”

The conundrum is both a blessing and a curse for Hyatt. On one hand, Hyatt has won praise for catering to the high-end of each segment. Part of this means keeping hotels in tip-top shape and maintaining strict brand standards no matter how old the property is.

Competition at Marriott, Hilton and IHG will indicate they have similar standards for each of their brands. But they also have a niche for owners who don’t always want to keep up with those standards but want to stay in the company’s orbit. DoubleTree is Hilton’s transformational brand in the luxury segment, while spark has become a rapidly growing brand in the premium mass market segment. Marriott’s Delta brand has been promoted as an option for owners who don’t want to go through the process of upgrading to New standard launched at Sheraton.

“At this time, we do not have a brand to incentivize owners who want to downgrade their hotels to a lower level,” Hoplamazian said. “That differentiates us from our competitors.”

Since this might seem like low-hanging fruit for a company that has shown in recent years that it’s not exactly shy about adding new brands, is one of those in the works? ?

“There’s an opportunity,” Joan Bottarini, Hyatt’s chief financial officer, said with a laugh on an earnings call Thursday morning. That’s something we’ve been looking at since the beginning.”

The conundrum here goes back to the logic that Hyatt focuses on high-end travelers, whether they are tourists or business travelers. So the concept of “downgrading” anything might appear at odds with Hyatt’s brand and customer logic.

“Our eyes were opened,” Hoplamazian said. “It’s something new that we really haven’t had an issue with or had to consider as much as we have now.”

New branding and bragging rights

Hoplamazian added further details on the recent acquisition of Standard and the upcoming joint venture with Grupo Piñero, owner of Bahia Principe Hotels & Resorts. The company’s takeover of Standard will mean 22 lifestyle hotels with about 2,000 combined rooms will join World of Hyatt. An additional 10 hotels with 1,300 rooms are in development in association with Standard and more than 20 other projects are in earlier stages of development.

“I am also pleased to share that we have been engaged in conversations due to calls coming in for new projects since we announced the acquisition,” Hoplamazian added of the Standard deal.

Regarding the new Bahia Principe partnership, Hoplamazian noted that it is an addition to Hyatt’s portfolio of all-inclusive resorts with more options and price points. More than 85% of Hyatt’s existing all-inclusive resort portfolio in the Americas are “five-star properties,” and the Bahia Principe network will bring more value-oriented resorts (what Hoplamazian later called is “4.5 stars””).

It all signals more options for the World of Hyatt orbit, which now has a record 51 million members — up 22% from a year ago. Co-branded credit card usage increased 16% in the first nine months of the year compared to the same period last year.

“Our members continue to benefit from our greater system scale and expanding collection of world-class brands,” said Hoplamazian.

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