Several weeks ago, Hyatt announced plans to acquire yet another brand. There’s now a major update, as this deal has closed, so hopefully we’ll see a World of Hyatt integration soon.
In this post:
Hyatt acquires Standard International, multiple brands
Hyatt has acquired Standard International, parent company of The Standard and Bunkhouse Hotel brands. The deal closed on October 1, 2024, and in the coming weeks the properties should be integrated into Hyatt platforms, and join World of Hyatt. Hyatt has paid a base purchase price of $150 million, with up to an additional $185 million over time, as more properties are added to the portfolio.
This is an asset-light purchase, as this includes management, franchise, and licensing contracts, for 22 open hotels, with approximately 2,000 rooms. Hyatt anticipates the stabilized annual fees associated with the base purchase price to be around $17 million, and sees them going up to $30 million, as more hotels are added to the portfolio.
For those not familiar with Standard Hotels, it’s a “lifestyle” hotel brand known for nightlife and partying. I wouldn’t say it’s a luxury brand, but rather it’s more a “hip” brand. Standard Hotels has properties in places like Ibiza, London, the Maldives, Melbourne, Miami, New York, and more. Then Bunkhouse Hotels has a portfolio that includes properties like Hotel Saint Cecilia in Austin and Hotel San Cristóbal in Baja California.
Here’s how Hyatt CEO Mark Hoplamazian describes this deal:
“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. Developers love this combination as much as we do.”
Historically, Hyatt has of course had the issue of not having as big of a footprint as competitors like Hilton, IHG, and Marriott. The company has tried to improve that situation by acquiring other hotel groups. This has included the purchase of Two Roads Hospitality (Alila, Thompson, and more), Apple Leisure Group (Secrets, Dreams, Zoëtry, and more), Mr & Mrs Smith (essentially a luxury travel agency), etc.
Hyatt forming new dedicated lifestyle group
While this shouldn’t impact guests directly, it’s worth noting that with this deal, Hyatt will form a new dedicated lifestyle group that will have its headquarters in New York City, with additional offices in Austin and Bangkok.
It will be led by Standard International’s Executive Chairman Amar Lalvani, who used to lead global development of W Hotels, before partnering with André Balazs on Standard Hotels.
This new group will leverage Hyatt’s operational and loyalty infrastructure while assuming distinct leadership across key functions, including experience creation, design, marketing, programming, public relations, restaurants, nightlife, and entertainment. It will be made up of staff from both Standard International and Hyatt. Here’s how Lalvani describes this:
“The lifestyle segment isn’t for the faint of heart, it takes creativity and commitment. 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.”
I can’t help but find this to be an interesting development, given that Hyatt is based in Chicago, so decentralizing many functions is an unusual move. I’m not sure if Hyatt just wanted to retain some talent that didn’t want to move to Chicago, if Hyatt thinks it’s cooler to have offices for its lifestyle brands in New York, or what.
It’ll be interesting to see if Andaz and Thompson also have many functions moved to these offices, or how it plays out.
This is a positive development, I guess?
I’m a fan of Hyatt, as much as one can be a fan of a for-profit, publicly traded travel brand, without seeming like a company spokesperson. I think Hyatt tries harder than other major hotel groups, and the World of Hyatt program differentiates the hotel group from competitors.
I appreciate the focus that Hyatt leadership has on growing the brand, to become more competitive in terms of global footprint. At the same time, this seems to be happening primarily in the form of acquiring small portfolios of properties. I’m conflicted about that.
On the one hand, I generally think that more options for earning and redeeming points, and taking advantage of elite perks, are a good thing. Furthermore, I also recognize that organic growth can only happen so quickly, so often these kinds of strategic investments are the best way to fuel growth fast. That’s especially true at a time like this, when interest rates are high, and developers don’t necessarily have the appetite for a lot of newly built properties.
On the other hand, I can’t help but feel like Hyatt has had an unbelievable amount of brand inflation at this point, and it makes it hard for even engaged customers to keep track of the various brands. Hyatt is now up to 30(ish) hotel brands.
I mean, heck, Hyatt has 10 different all-inclusive brands. Can someone explain the difference between them all to me? Because I can barely name a handful of them, and don’t even ask me to tell you the differences between them.
And here’s the other thing. Hyatt is definitely focused on “luxury” expansion, rather than limited service expansion. The Wall Street Journal even recently did a story about “Why Hyatt Is Choosing Luxury Over Affordability.”
But if you ask me, Hyatt is only sort of focused on luxury. Sure, most of Hyatt’s recent brand acquisitions have been for upscale and upper upscale properties. But we’re seeing very little growth with true luxury brands, and frankly even those luxury properties that are opening, aren’t exactly “flagship” properties.
Yes, I’m happy there’s a new Park Hyatt London and Park Hyatt Marrakech, but both of these seem like “better than nothing” additions, rather than true flagship properties for the brand, based on the location alone. I doubt it will happen (since it would be very costly), but I’d absolutely love to see Hyatt acquire one of the major, non-publicly traded luxury hotel brands out there.
Bottom line
Hyatt’s purchase of Standard Hotels has just closed, and the expectation is that these hotels will join the World of Hyatt portfolio in the coming weeks. Hyatt has been growing quite a bit lately by acquiring new brands. While more World of Hyatt properties is a good thing, in an ideal world we’d see a bit more growth to existing portfolios, rather than just small new brands added.
What do you make of Hyatt acquiring Standard Hotels?
Lifestyle and hip = overpriced.
Meh otherwise.
Debating how concerned I should be that Hyatt uploaded these properties to their app without any category designations
Perhaps this is also a result of the Mr. and Mrs. Smith Hyatt points fiasco that is raging to this day. They are trying to get a grip on why that merger isn’t working.
This article is really out of touch. All inclusive resorts are having a moment, and Hyatt has recognized that. People are looking for more value when they travel (I suspect due to the economy), Hyatt has recognized that. And your problem is that despite Alilas, Thompsons, and Park Hyatts existing… Hyatt isn’t premium enough. Because you can’t name an all-inclusive brand they offer.
*eye roll*
Yeah, I think Ben is getting a little too "aspirational" focused here. I understand if he doesn't find it exciting or interesting to stay anywhere that's not very-good-Park Hyatt level or above, but the addition of, say, the Standard in New York is a great add for regular people trying to use Hyatt points. They don't have that many genuinely cool hotels in NYC; the Standard is a new one.
Either Hyatt corporate leadership are geniuses or they're fools.
For growth, they have decided to forgo traditional full-service branded properties, at least within North America, for a combination of (1) resorts, all-inclusives and niche boutique/upscale properties and (2) franchised limited-service properties.
It would seem nobody in Canada and the USA wants to open a new Hyatt Regency.
You mention luxury private brands and the hope for Hyatt to obtain one. I agree that most are too large and would be difficult to acquire.
However, the two luxury brands that stand out for me as attainable and perhaps the right timing would be Como and Rocco Forte. The Ongs, who own Como, are getting up there in age and they have no alliance to any group. Big enough to add some great...
You mention luxury private brands and the hope for Hyatt to obtain one. I agree that most are too large and would be difficult to acquire.
However, the two luxury brands that stand out for me as attainable and perhaps the right timing would be Como and Rocco Forte. The Ongs, who own Como, are getting up there in age and they have no alliance to any group. Big enough to add some great properties but not so big as to require a massive investment. Forte is the same and is sort of stuck at any growth at this point. They had their heyday in the 90’s and early 2000’s and seem unable to implement any growth or new strategy.
I highly, highly doubt Sir Rocco will sell Rocco Forte Hotels. Ditto for his heir, Lady Shawcross.
Maybe Omni.
What's confusing is normally when a company buys a small company, they do so to acquire its customers and eliminate upstart competition. Trash companies are probably the best example of this. It's confusing that Hyatt is keeping the brands of very small hotel chains when these properties could easily be re-flagged into Hyatt's JdV or...
I highly, highly doubt Sir Rocco will sell Rocco Forte Hotels. Ditto for his heir, Lady Shawcross.
Maybe Omni.
What's confusing is normally when a company buys a small company, they do so to acquire its customers and eliminate upstart competition. Trash companies are probably the best example of this. It's confusing that Hyatt is keeping the brands of very small hotel chains when these properties could easily be re-flagged into Hyatt's JdV or Unbound brands. Standard probably has less than 1% name recognition.
Standard has name recognition in the right circles. It's like how no avg Joe has heard of Aman yet their customer base all knows. However, I, as a hotel enthusiast, had never heard of Dream prior to the acquisition. That brand needs to go.
Omni is an interesting point, though. They have slowly continued to grow but I've been wondering about their long-term strategy for years now.
Yet more props we’ll be unable to apply Globalist benefits (free upgrades/breakfast/SUAs). I just stayed at The Magdalena in Austin with Chase Edit perks, I think will still be the better way to book than thru Hyatt for better value