Hyatt has added a number of new products. Now comes the hard part: keeping the old ones

If there’s one thing we can all learn from Madonna, it’s this: You have to keep reinventing yourself over and over again to stay on top of the game, or else the constant barrage of tiny pipsqueaks that can hold half a tune is bound to threaten your crown.

Some (OK, OK – maybe it’s just the hotel reporter writing this story) would argue that Hyatt has taken a page from Material Girl in recent years with its brand strategy.

Although the company was known for decades as an upscale hotel chain that catered to business travelers, it eventually began to reinvent itself as a luxury and lifestyle powerhouse with brands such as 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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Restructuring continued in recent years with the luxury game becoming more popular with the acquisition of the Mr & Mrs Smith booking platform. Hyatt has now moved into all-inclusive resorts by adding Apple Leisure Group’s network of brands such as Secrets and Dreams, and a joint venture announced earlier this month with parent company Bahia Principe Hotels & Resorts. Hyatt also flexed its hotel lifestyle muscles earlier this year with the announcement that it was adopting the Standard International network of brands including The Standard and Bunkhouse Hotels.

Hyatt’s overall development pipeline is more than 40% of the company’s current number of rooms.

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

But even this Chicago-based hotel tycoon faces storms from time to time and – gasp – we have to think we should do what the competition is already doing.

While the company reported a net profit of $471 million for the third quarter on Thursday, an investor call showed many analysts were curious about the higher-than-usual number of rooms leaving the Hyatt line. Hoplamazian said some of this is due to the strict standards of the Hyatt brand and owners not wanting to conform to modern requirements in older properties.

“Some of them are markets that have become challenging, I would say, or where the central business district has moved and we’re looking for new representation,” Hyatt’s CEO told analysts Thursday morning. “In a few cases, the owners we haven’t reached an agreement with in terms of bringing the hotels up to brand standards. So, part of that has to do with good behavior and maintaining standards and increasing the quality of our portfolio.”

The conundrum is both a blessing and a curse for Hyatt. On the other hand, the Hyatt is winning rave reviews for its high-end configuration in each of its segments. Part of this means keeping hotels in top condition and maintaining strong brand standards regardless of how old the property is.

The competition at Marriott, Hilton and IHG will say they have the same standards for each company, too. But they also have an off-ramp for owners who don’t always want to keep up with those standards but want to stay in the company’s orbit. DoubleTree is a symbol of Hilton’s transformation into premium space, while Spark is the fastest growing brand in premium economy space. Marriott’s Delta brand has been created as an option for owners who don’t want to go through the process of upgrading to the new standards being rolled out at Sheraton.

“At the moment we don’t have a way to encourage hotel owners who want to downgrade their hotels to a lower standard,” said Hoplamazian. “That’s different than the competition.”

Since this seems like low-hanging fruit for a company that has shown in recent years that it’s not shy about adding new models, is another one in the works?

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

The conundrum here goes back to the idea that Hyatt focuses on the high end of travelers, whether they are leisure or business travelers. Thus, the idea of ​​”downgrading” anything may seem at odds with the Hyatt brand and the guest’s mentality.

“We opened our eyes,” said Hoplamazian. “It’s something new that we’ve never had a problem with or had to think about like we do today.”

New products and bragging rights

Hoplamazian added more details about General’s recent acquisition and upcoming joint venture with Grupo Piñero, owner of Bahia Principe Hotels & Resorts. The company’s general takeover will mean 22 lifestyle hotels with a combined total of nearly 2,000 rooms join the 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 the early stages of development.

“I am also pleased to share that we have already engaged in discussions resulting from incoming calls for new projects since announcing the acquisition,” added Hoplamazian of the Standard deal.

On the new Bahia Principe partnership, Hoplamazian noted that it was about complementing Hyatt’s all-inclusive resort portfolio with additional options and price points. More than 85% of Hyatt’s existing all-inclusive portfolio in the Americas are “five-star properties,” and the Bahia Principe network will bring even more premium resorts (what Hoplamazian called later on the phone “4.5 star”).

It reflects all the additional options coming into the World of Hyatt orbit, which now has a record 51 million members – up 22% from last year. Consolidated 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 large system size and growing portfolio of world-class products,” said Hoplamazian.

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