Hyatt partners with German hotel chain on latest European expansion

Hyatt isn't done expanding into Europe.

The Chicago-based hotel conglomerate's $2.7 billion Apple Leisure Group acquisition might have seemed like a play for all-inclusive resorts, but the takeover boosted Hyatt's European footprint by 60%. However, Hyatt's appetite for Europe wasn't satisfied there: On Thursday, the company announced a strategic partnership with German hospitality company Lindner Hotels AG.

While the Lindner deal isn't an acquisition like the ALG play last November, the new partnership means more than 30 hotels across seven European countries will join the Hyatt brand portfolio and integrate into the World of Hyatt loyalty program. Most of the Lindner properties are expected to transition into the JdV by Hyatt brand, which is a collection of independent hotels offering more distinct flavor than, say, a stand-alone Hyatt Regency.

"The addition of Lindner's desirable hotel portfolio will substantially grow Hyatt's brand footprint in Germany and bring our guests and ultimately our World of Hyatt members to a variety of new destinations across Europe including Kiel, Leipzig, Sylt, Bratislava and Interlaken," Hyatt CEO Mark Hoplamazian said in a statement. "We are grateful for the trust the Lindner team is placing in us and are excited to strengthen our collective guest offering through strategic capital investments being made by Lindner into the portfolio."

A Hyatt spokesperson declined to provide any financial details of the partnership or whether, given the branding shifts, the partnership was only a stepping stone to an eventual acquisition.

While not a takeover, the Hyatt-Lindner partnership does play into the growing hotel industry ideology that major hotel companies are likely to grow with "bolt-on" or "tuck-in" deals that fill in geographic or branding blank areas. In the past, Marriott achieved one of these deals in Europe with AC Hotels; the deal gave Marriott a geographic lift before the U.S. company heavily expanded the brand around the world.

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Brand strategy

Lindner may not be a household name in the U.S., but Hyatt portrayed the deal as one that gives it a lift in the lifestyle hotel segment. Lifestyle hotels typically put more emphasis on food and beverage as well as design. The JdV by Hyatt brand, which many of the Lindner hotels will fall under, bills itself as a "collection of original hotels with a deep respect for the neighborhoods that make up each destination."

The Lindner website, however, shows a portfolio of hotels that appear to range beyond the lifestyle hotel segment. A mix of airport and business travel hotels as well as more leisure-oriented hotels are under the Lindner umbrella, per the company website. The company operates two brands: Lindner Hotels & Resorts, and Me and All Hotels.

There's no public knowledge about which hotels would specifically get shifted to JdV branding under the deal, but the new partners touted the joint benefit of working together. While Hyatt gets a bigger foothold in Europe, Lindner gains better global support and brand recognition.

"This type of collaboration is truly unique in the German market," Lindner CEO Arno Schwalie said in a statement. "As part of the JdV by Hyatt brand, Lindner remains a strong brand with its own identity and corporate independence, now aided by the power of Hyatt's global brand awareness and first-class sales and marketing capabilities."

Bottom line

Hyatt's attention to Europe during the pandemic was initially a curious one, as most of its competitors continued to focus on China. Many expected Europe to be the last geographic region to recover from the coronavirus pandemic due to an increased reliance on international tourism.

Instead, the European strategy appears to be the smart one. China's reopening plans for international travel remain uncertain, and tough lockdowns continue to pop up in certain cities that see new case spikes. Europe, on the other hand, appears to be booming on the hotel front despite geopolitical tension during the invasion of Ukraine.

European hotel performance was up 14% from 2019 levels at the end of last month compared to a 22% decline seen in China, according to STR.