HNA Group is a massive Chinese conglomerate that has stakes in all kinds of travel brands. This includes about a dozen Chinese airlines, as well as major international hotel brands.
For a while they were investing like crazy, and now they’re selling assets like crazy. This is because they’ve had a hard time securing new financing, leaving them in a rough financial situation.
Several weeks ago I wrote about how HNA Group might be looking to sell their stake in Carlson Rezidor Hotel Group, which has since been rebranded as Radisson. This is a stake they bought just a couple of years ago.
When I wrote about the potential for a sale I wondered if Hyatt might be interested in acquiring Radisson. We know that they’ve really struggled to grow, and all of their competitors have been acquiring competitors. Meanwhile Hyatt is left with a global footprint that simply isn’t competitive with “the big guys.”
We now know that Radisson is being sold, though it’s not to Hyatt. Bloomberg is reporting that HNA Group is selling their stake in Radisson to Jin Jiang International Holding Co., which is controlled by the Shanghai government and also owns a 12% stake in Accor.
The value for the sale hasn’t been disclosed, though it’s suspected to be somewhere around $2 billion.
While Jin Jiang International isn’t a majority shareholder with Accor, it will be interesting to see if this eventually leads to some sort of further cooperation between Accor and Radisson. In many ways those two companies are very similar, so I could see something eventually happening there.
This is unfortunate for Hyatt, though, in my opinion. It’s not that we ever had a reputable reason to believe Hyatt would take over Radisson, other than their stated desire to grow. But with Radisson being sold, that seems to leave them with few acquisition targets at the moment.
On the plus side, as a customer I’m excited about Hyatt’s upcoming partnership with Small Luxury Hotels of the World. I’m just hoping that there’s some substance to the partnership (that earning rates are the same as at other Hyatts, that redemption rates are reasonable, and that maybe there are even some elite perks). I don’t think this partnership will help them achieve any big revenue goals they have since it’s essentially just a marketing partnership, but for members it’s a big development.
(Tip of the hat to Simon)
As I said when the rumor started, it simply doesn't make sense for Hyatt to create a network of properties in B and C cities around the world. Hyatt has good footprint in the US, plus a few global A cities. That's it. So why would you venture into small towns around the world, if you haven't even covered all the A cities ...
Just can't get excited about Hyatt at all, hardly any of them to be found outwith the USA!
yeah, hyatt's footprint is ridicolously small. I travel to Osaka often, and hyatt has a hotel pretty much in the middle of nowhere. i wish i could stay but no thanks.
Jin Jiang ? That's truly amazing from my perspective , in the context of dealings with them about 20 years ago. Bordering on the unbelievable but I guess it says something about China's rapid growth.
The challenge with Hyatt and any of the small players is always gonna be footprint. When I had a gig that had me going again and again to a couple of locations with good Hyatt properties, I was happy enough to harvest points and status. When that gig ended, I went over to Starwood and Marriott (way, way before any merger talks) because if only one out twelve stays is gonna be with a brand,...
The challenge with Hyatt and any of the small players is always gonna be footprint. When I had a gig that had me going again and again to a couple of locations with good Hyatt properties, I was happy enough to harvest points and status. When that gig ended, I went over to Starwood and Marriott (way, way before any merger talks) because if only one out twelve stays is gonna be with a brand, why bother trying to make the effort?
And I should land lifetime Gold with Marriott when my accounts are officially combined (though I’ll believe it when I see it), which sort of justifies my position. Of course, if Marriott goes to shit, it’ll be like my cobbled together American million miler status*...a perk I won’t use.
* My TWA miles rolled over to AA and my HP miles rolled over to US, and, between TW, HP, US, and AA, I’ve now got 1.6 million lifetime miles. Yay, because the new AA sucks.
It's one thing to be big, it's another thing to be big and high quality enough that your guests stay loyal to you. Based on my experiences with Radissons and their typical online reviews, to make Radisson work in its portfolio, Hyatt would have either had to majorly cull properties or make major investments to bring them up to any kind of standard acceptable to a customer used to a Hyatt Place or, certainly, a Hyatt Regency and above.
Jin Jiang is in fact the fifth largest hotel chain in terns of room count. If they close the purchase of Radisson, will they become the second largest chain after Marriott?
I worked on this deal :)
Agree with others. I generally have about 100 business nights a year but it's not always in big cities. I REALLY like Hyatt but just not enough footprint for me. It's one reason I don't do a lot of stays at Radisson either. The two would be a good match actually IMHO.
I agree with Santastico unless Hyatt makes a big move and not the proposed lame one their now doing they will continue to stagnate. Great Brand in Asia but the Marriott merger is going to eat into them big time. As a long time Diamond I essentially gave up on them after the WOH and my travel changed a bit so that the footprint hurt.
It will be interesting to see how the Marriott deal plays out over the next couple of years.
No matter how good Hyatt is unless they drastically improve their global footprint there is no way I will become loyal to them. It is just impossible for me to reach their top status based on my travel locations.