Hyatt added a bunch of new brands. Now comes the hard part: maintaining the old ones
If there’s something we can all learn from Madonna, it’s this: You have to keep reinventing yourself over and over to stay on top of the game, or else the constant churn of young pipsqueaks who can hold half a tune will inevitably threaten your crown.
Some (OK, fine — maybe it’s just the hotel reporter writing this story) could argue Hyatt has taken a page from the Material Girl in recent years with its own brand strategy.
While the company was known for decades as a lofty hotel chain that catered to business travelers, it eventually started to reinvent itself into a luxury and lifestyle powerhouse with brands like Alila, Andaz and Thompson Hotels. High-profile openings in the last quarter include the new Park Hyatt London River Thames and Alila Shanghai.
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The reinvention continued in recent years with a more bespoke luxury play with the acquisition of the Mr & Mrs Smith booking platform. Now Hyatt has ventured into all-inclusive resorts with the addition of the Apple Leisure Group network of brands like Secrets and Dreams, and a planned joint venture announced earlier this month with the parent company of Bahia Principe Hotels & Resorts. Hyatt also flexed its lifestyle hotel muscle earlier this year with the announcement that it was absorbing Standard International’s network of brands that include The Standard and Bunkhouse Hotels.
Hyatt’s overall development pipeline is more than 40% of the company’s current hotel room count.
“Our openings provide more opportunities for our guests and members to engage with us while our growing pipeline allows us to expand into new markets in the future,” Hyatt CEO Mark Hoplamazian said Thursday morning on a company earnings call.
But even this nimble Chicago-based hotel giant faces headwinds from time to time and — gasp — must ponder if it should do what the competition is already doing.
While the company reported a hefty $471 million third-quarter profit on Thursday, an investor call showed many analysts are curious about a higher-than-usual number of rooms leaving the Hyatt orbit. Hoplamazian said some of this is due to Hyatt’s strict brand standards and owners not wanting to keep up with modern requirements on older properties.
“Some of it is markets that have become, I would say, more challenging, or where the central business district has moved and we are looking for new representation,” the Hyatt CEO said to investor analysts Thursday morning. “In a couple of cases, owners that we didn't come to an agreement with on bringing hotels to brand standards. So, part of that has to do with just discipline and maintaining standards and elevating the quality of our portfolio.”
The conundrum is both a blessing and a curse for Hyatt. On the one hand, Hyatt wins rave reviews by catering to the high end of each of its segments. Part of this means keeping hotels in top shape and maintaining stringent brand standards no matter how old the property is.
The competition at Marriott, Hilton and IHG will say they have similar standards around each of their brands, too. But they also have an off-ramp for owners who don’t always want to keep up with those standards but do want to stay in the company orbit. DoubleTree is Hilton’s conversion brand in the upscale space, while Spark has become a rapidly growing brand in the premium economy space. Marriott’s Delta brand has been touted as an option for owners who didn’t want to go through the process of upgrading to new standards rolling out at Sheraton.
“We do not at this point have a brand into which we would encourage owners who want to downgrade their hotels to something that's at a lower level,” Hoplamazian said. “That's different than our competitors.”
Given this seems like low-hanging fruit for a company that has shown in recent years it isn’t exactly shy about adding new brands, is one in the works?
“There is opportunity. It’s something we’ve been looking at since the beginning of time,” Joan Bottarini, Hyatt’s chief financial officer, said with a laugh during the earnings call Thursday morning.
The conundrum here goes back to the logic that Hyatt focuses on the high end of travelers, whether they’re leisure or business travelers. So, the concept of a “downgrade” of anything might appear at odds with Hyatt's brand and guest logic.
“We've got our eyes wide open,” Hoplamazian said. “It is something new that we really haven't had an issue with or had to consider as much as we do today.”
New brands and bragging rights
Hoplamazian added further details on the recent Standard acquisition and upcoming joint venture with Grupo Piñero, owner of Bahia Principe Hotels & Resorts. The company’s Standard takeover will mean 22 lifestyle hotels with roughly 2,000 rooms combined join World of Hyatt. An additional 10 hotels with 1,300 rooms are in the Standard-affiliated development pipeline, and more than 20 other projects are in earlier phases of development.
“I'm also pleased to share that we've already engaged in conversations resulting from inbound calls for new projects since we announced the acquisition,” Hoplamazian added of the Standard deal.
Of the new Bahia Principe partnership, Hoplamazian noted that it was about filling out Hyatt’s all-inclusive resort portfolio 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 in more value-oriented resorts (what Hoplamazian referred to later in the call as “4.5-star”).
It does all signal more options coming to the World of Hyatt orbit, which now has a record 51 million members — up 22% from a year ago. Cobranded credit card use is up 16% for the first nine months of the year compared to the same time last year.
“Our members continue to benefit from our greater system size and expanding collection of world-class brands,” Hoplamazian said.
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.