Hyatt officially owns lifestyle hotel group Standard International. Now what?
Does this week mark the day the lifestyle hotel died? Depends on who you ask.
Hyatt officially closed this week on its asset-light takeover (meaning Hyatt will own the operations but not the real estate) of Standard International. Standard, the still-trendy-at-25 chain of lifestyle hotels, encompasses brands like The Standard, StandardX, Bunkhouse Hotels and The Manner, a new luxury concept in New York City's SoHo neighborhood.
(A refresher for those wondering what even is a lifestyle hotel: They tend to be properties leaning more into design, bars and restaurants that locals want to get into as much as the guests staying at the hotel. Someone also once described them to me as "boutique hotels with way less of the annoying dim lighting in the lobby.")
The Standard takeover adds 22 hotels worldwide with a combined 2,000 rooms to the Hyatt network. More than 30 projects are in various stages of development in the Standard International orbit and will also become part of Hyatt. While the deal is closed, it isn't clear when the Standard-affiliated hotels will join World of Hyatt, but Hyatt leaders indicate there are plenty of growth opportunities for the Standard portfolio now tethered to the Chicago-based hotel giant.
"The development community knows an industry game changer when they see it, and the enthusiasm for bringing together the ethos of The Standard and Bunkhouse brands and the power of Hyatt's network and distribution system is palpable," Hyatt CEO Mark Hoplamazian said in a statement this week. "Developers love this combination as much as we do."
It's a major win for Hyatt's continued push into luxury and lifestyle hotels, but there's plenty of chatter in the hotel orbit that this $335 million takeover is further erosion of fun, whimsical brands into major conglomerates.
While none were willing to go on the record for this story, you'll find plenty of cynics who say that Kimpton, post-IHG takeover, is nothing like its heyday as the birthplace of the boutique hotel movement. Marriott leadership has acknowledged W Hotels lost its cool factor somewhere along the way, but they have made strides in righting the ship with moves like reimagining properties like W Hollywood and W New York — Union Square.
So, should we be planning for a funeral for everything that makes Standard, well, Standard?
From personal experience, stepping foot into some of the New York properties in the now Hyatt-owned Dream Hotel Group portfolio feels like arriving at a party that ended several years ago (though the newer properties in cities like Nashville are lovely). You might say the warning bells go off when I hear of yet another cool brand getting gobbled up by one of the conglomerates.
There are plenty of reasons why Hyatt would want to acquire a company like Standard International. For starters, it's a lifestyle hotel company that remains relevant after more than two decades in the business. We can't say the same about Dream, so perhaps there's an element of Hyatt wanting another elevated crack at the Manhattan lifestyle hotel scene.
A Standard portfolio more than delivers on that front with very trendy hotels around the world in cities like London and Bangkok, as well as a robust portfolio of more along the way.
"They want to grow the brand, right? When you're dealing with a portfolio that's only about 20 assets, and then they go to 100, invariably, it's going to change," LW Hospitality Advisors CEO Daniel Lesser said. "What is that going to look like? I'm not really sure, but it definitely fills a hole for Hyatt."
In recent years, Hyatt has gobbled up other lifestyle brands like Thompson Hotels, Alila and Dream. But there are signs that the Hyatt-Standard deal is the latest example of major hotel brands recognizing lifestyle hotels are a different kind of entity that require a different kind of management and creative structure to keep them in the headlines.
Rather than base Hyatt's growing lifestyle team in Chicago, the company is parking a new group dedicated to lifestyle hotels in New York City. The team will be helmed by Amar Lalvani, former executive chairman of Standard International. Standard CEO Amber Asher is expected to depart the company sometime later this year, TPG previously reported.
This quasi-autonomy to lifestyle hotels is already seen at Accor, which has its majority-owned Ennismore lifestyle group (which includes brands like The Hoxton and Gleneagles) as an offshoot from the main Paris-based conglomerate. Even Marriott's Edition brand, seen as the world's largest hotel company's most buzzworthy lifestyle brand, has had more autonomy due to its launch in partnership with lifestyle and nightlife maven Ian Schrager.
"The lifestyle segment isn't for the faint of heart, it takes creativity and commitment," Lalvani said in a statement this week. "But if you get it right, you reap the benefits of outsized guest loyalty and outsized developer returns. The beauty of this combination is that Hyatt respects the creativity and freedom required to deliver the experiences we do, and we respect the value of Hyatt's storied history, global infrastructure and best-in-class commercial services."
Of course, this is the hotel industry, and it often comes down to more than just giving creative power to someone outside of company headquarters. It's more about not leaving room for your loyal customers to experience the competition where you don't have a hotel.
"At the end of the day, Hyatt has had some holes to fill in terms of expanding their footprint and having as much coverage as Hilton, Marriott and IHG," Lesser said. "The last thing any hotel company or hotel brand family wants is to have a loyal traveler go somewhere where they don't have a product offering for them."
As for us, we'll be waiting to see if there's ever a day when we see the arrival of a World of Hyatt Globalist bypass for the never-ending line to get into Le Bain at The Standard, High Line.
What? We can dream!
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