Arguably Hyatt’s biggest challenge is how small their global footprint is. We’ve seen a lot of consolidation in the hotel industry lately, as Marriott has acquired Starwood, IHG has acquired Kimpton, Accor has acquired Fairmont, Raffles, and Swissôtel, and much more. Meanwhile we’ve seen very little happen at Hyatt.
Hyatt has been struggling with growing their portfolio of full service hotels, with little organic growth, and also no acquisitions. A vast majority of new Hyatts have been part of their limited service Hyatt Place portfolio, and that doesn’t provide all that much value for loyalists, given the limited benefits at these hotels.
Hyatt has long expressed interest in growing, but it seems like they haven’t found a good fit yet. Hyatt has now publicly expressed interest in an acquisition that could increase their portfolio by nearly 400 hotels.
Bloomberg reports that Hyatt has expressed interest in acquiring NH Hotel Group, which is a Spanish hotel operator. Hyatt’s CEO, Mark Hoplamazian, said the following in a statement:
“Hyatt has a demonstrated track record of making strategic investments to extend the reach of our brands and create value for our stakeholders. In keeping with our growth strategy, we submitted a letter of intent expressing our interest in pursuing a potential acquisition of NH Hotel Group.
We believe that marrying NH Hotel Group’s strong footprint in Europe and select other markets with Hyatt’s global presence would yield a powerful portfolio of brands and network of hotels delivering compelling benefits for guests, owners and shareholders of both companies.”
NH Hotels is in an interesting situation, as their largest shareholder is Minor International, which is a Thai hospitality company. They recently increased their stake in NH Hotels to 35.55% by acquiring a stake from struggling HNA Group.
NH Hotels has about 380 hotels in 29 countries, with over 53,000 hotel rooms. Their biggest focus is in Europe and Latin America, which are areas where Hyatt has historically been pretty weak, so the two brands would complement one another in terms of their portfolio.
I’ve never stayed at an NH Hotel before. Based on what I’ve seen, it looks like the hotels are perfectly fine. For the most part they have mid-range hotels, with some options being more budget, and some hotels even being luxury. NH Collection hotels look quite nice, though there aren’t many of them. Of course I’d be much more likely to stay at any NH Hotels if they were part of the Hyatt portfolio.
So yeah, I think this would be great news for Hyatt loyalists, given that the companies complement one another geographically. At the same time, the hotels don’t look too exciting. But we’ve seen so many hotel acquisitions lately that I guess there aren’t that many interesting choices left.
What do you make of a potential takeover of NH Hotels by Hyatt?
This would be interesting - NH Collection is generally nice hotels - NH Hotels are a mixed bag - as someone who is currently living in a NH Hotel in Colombia, it is a mixed experience - Standard is basic, functional and clean, but there is no real incentive for loyalty, especially since none of the hotels in the NH chain in Colombia earns towards status in the program.
NH is really a mixed bag, ranging from pretty good to pretty bad. Not sure this is a good idea for Hyatt, it will lead to a lot of angry customers who expect a consistent standard from a Hyatt brand.
Worst thing about NH is the loyalty scheme. Points have an expiry date based on the time they were earned and you pay on check out using the points rather than on booking. Useless. I don’t bother staying in them now. Some nice properties in Amsterdam.
It would definitely broaden their range in Europe. In Germany, Hyatt has 1 hotel in Berlin and zero in Frankfurt. NH has two Collection hotels in Berlin and one in Frankfurt. As an American traveler who works in Germany a lot, I don’t give NH a second look and frankly don’t care to have Hyatt status. Combined that may change.
While I acknowledge they need more international presence, there are too many US cities with only one mid or upper tier Hyatt property.
NH only offers one US location. NYC.
As a weekly US business traveler, this acquisition would do little to compel me.
Stayed at NH Collection hotel in Venice last summer and it was excellent. This would likely be in the top category if bought by hyatt. It seems like they'd need to make several new brands with this though as it seems lots of the properties are low end in small cities not sure if it's a good fit.
Would love to see them buy Kempinski. Really wish that they had bought Fairmont.
99% this won't occur
As I stated earlier, I find it hard to believe that Hyatt has a strategic interest outside the US and global A cities. I mean strategic: Of course they can't avoid having a few properties in global B and C locations if they grow by takeovers, but I don't think that's their strategic intention.
And as much as Radisson, also NH is indeed very much focussed on B and C cities. The details of their...
As I stated earlier, I find it hard to believe that Hyatt has a strategic interest outside the US and global A cities. I mean strategic: Of course they can't avoid having a few properties in global B and C locations if they grow by takeovers, but I don't think that's their strategic intention.
And as much as Radisson, also NH is indeed very much focussed on B and C cities. The details of their geographic scope are slightly different (e.g. Radission is stronger in Northern and Eastern Europe, NH in Southern Europe), but both have in common that the vast majority of their properties are in medium sized to small cities outside the US - for which Hyatt has, so far, showed absolutely no interest at all.
It might be relevant to metion that Radisson and NH have the same current owner - HNA, looking to offload both. If anything NH is the more complex ownership structure since Minor International is also involved with a very huge chunk and they are awaiting a shareholder bid in the next 2 weeks to launch a full takeover bid themselves. My guess is this is material info to both companies and hence has to be...
It might be relevant to metion that Radisson and NH have the same current owner - HNA, looking to offload both. If anything NH is the more complex ownership structure since Minor International is also involved with a very huge chunk and they are awaiting a shareholder bid in the next 2 weeks to launch a full takeover bid themselves. My guess is this is material info to both companies and hence has to be disclosed (Despite family control, Hyatt is technically a public company).
Hyatt may have some high end representation, but straight up half of its properties are Hyatt House/Place and this half is almost entirely in USA. So they are even weaker internationally than they look and just their high end really isn't anywhere near the size of Marriott.
The total number of Unbound Collection+Park Hyatt+Andaz+Grand Hyatt is still under 150 (it was 120 last I counted some months ago, so I'm being generous). That's in the same ballpark of just total Ritz, or total Four Seasons or Shangri La.
I don't think we can really consider Hyatt a focused high end chain when the absolute number of good properties is this low. The comparisons for only lifestyle or only luxury hotels vs competitors is even more lopsided (and not in Hyatt's favour).
I think their focus is....anything at this point. To grow into a company with critical strength, they need all sorts of expansion in all sorts of segments. There are plenty of independent hotel companies and loyalty/marketing groups. They would be better off in MGM like partnerships with locally strong players. A partial list (not verified for suitable ownership structure or price on market):
USA:
Loewes
Omni
Europe:
Kempinski (GHA Discovery has similar number of properties to Hyatt with a MORE high end focus)
Radisson
Millennium
NH
Barcelo
Melia
Steigenberger
The 3+ Nordic/Scandinavian groups (First, Scandic, Thon etc)
China
Shangri La
India
Oberoi
Taj
Leela
ITC (only their high end is marketed by Marriott, rest is under Preferred etc)
UAE
Jumeirah/Zabeel House
Emaar/Address/Rove/Palace/Vida
Rotana
Other Misc
Langham
Rosewood
Viceroy
Capella
Lux
The soft collections:
Preferred Hotels Group
Small Luxury Hotels
Leading Hotels of the World
GHA Discovery
A lot of the soft collections have overlap with some chain properties and properties participating in more than one collection but there is precedent for deals such as when Starwood integrated Design hotels. Each one of these groups is several 100 of the most interesting kind of unique/boutique hotels except Preferred which has all kinds of properties.
If only Hyatt moved faster, their ownership structure really seems to make it hard for them to effectively respond quickly to market developments. They certainly seem to have the need, means and intent since Starwood was almost done...
I hope Hyatt gets this deal done. They have to make a move because they're being left behind in terms of number of property. Most times it's just more convenient to stay at a Hilton or Marriott property because there's so many of them in a given market and you get plenty of options in terms of price.
What good does it do for them to speak publicly about a letter of intent? Seems very strange to me.
The only NH I have stayed at is the Vienna airport hotel. Good hotel for a one night stay, breakfast in the morning and then on your way. Would love to see Hyatt take over this chain.
And maybe Hyatt will copy NH‘s loyalty program. How funny would that be?
NH hotels have huuuge variance in terms of quality, service and the way things look like at each property which is quite irritating to me. If they somehow manage to standardize it more, it could be a smart move, even though Hyatt is *way* higher end.
The NH Collection properties are great - stayed in Barcelona, Milan, and another in Turin. The regular NH hotels never had great reviews/pics so have never tried those ones.
So the Radisson rumour is gone?
@ Terence -- I wouldn't say it's gone, but rather that was just speculation on my part based on Hyatt's expressed interest in growing their portfolio. They never confirmed nor denied interest.