Hyatt is acquiring yet another hotel brand. This has been rumored for several weeks, and is now official.
In this post:
Hyatt acquiring Standard International, multiple brands
Hyatt is acquiring Standard International, parent company of The Standard and Bunkhouse Hotel brands. The deal is expected to close in late 2024, at which point the properties will be integrated into Hyatt platforms, and join World of Hyatt. Hyatt is paying a base purchase price of $150 million, with up to an additional $185 million over time, as additional properties are added to the portfolio.
This is an asset-light purchase, as this includes management, franchise, and licensing contracts, for 21 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.
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 transaction, Hyatt will form a new dedicated lifestyle group that will have its headquarters in New York City.
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.
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.
We’re told that more details will be shared in the future, so it’s not entirely clear yet if this will be specific to this acquisition, or if other Hyatt lifestyle brands will also have offices moved to New York.
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 is acquiring Standard Hotels. The deal should close by the end of 2024, at which point these properties will join the World of Hyatt portfolio.
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?
All inclusive brands:
Whats the same - the poor food quality thru out them
- The lack of Hyatt management control, oversight
to the management of the properties. Its a run
away train at the moment.
That is a pitfall of over expansion too quickly. Got to find the good managers from other companies to come in, then the curve to learn the Hyatt ways.
Good stuff for Wall St, tough stuff for the guests
Hip brand? Lifestyle hotel? Adjectives in order to charge more. Build more HR and Grands. That is what the majority of people will use. Not some brand that will have minimal contribution to top and bottom lines.
I wish Hyatt would focus on having better hotels in the US. Every time I try to book there are only Hyatt Place or Hyatt House hotels. Europe and Asia have great high end hotels.. why can’t we have more here?
Partly because of labor costs. Nobody wants to build a full-service hotel in the USA these days. Downtowns are dead with remote work and suburban office parks also haven't come back, also because of remote work. Limited-service hotels like Hyatt Place, Fairfield, and Courtyard are as profitable or more profitable than a Hyatt Regency, Marriott, Sheraton, or Westin.
Plus, Marriott pretty much owns most markets. A mediocre Hyatt Regency can't compete against a slightly...
Partly because of labor costs. Nobody wants to build a full-service hotel in the USA these days. Downtowns are dead with remote work and suburban office parks also haven't come back, also because of remote work. Limited-service hotels like Hyatt Place, Fairfield, and Courtyard are as profitable or more profitable than a Hyatt Regency, Marriott, Sheraton, or Westin.
Plus, Marriott pretty much owns most markets. A mediocre Hyatt Regency can't compete against a slightly better than average Marriott, Sheraton or Westin.
Part of the problem is that outside of cities like NYC, Philly, Chicago, SF, and maybe Seattle and Portland, very few US cities have a downtown worth visiting for tourism purposes. All the neighborhoods containing the people that actually made those places vibrant were bulldozed for office buildings and highways for suburban commuters to drive to said office buildings. End result is that after 7PM, unless there's a major convention or something happening downtown, there's...
Part of the problem is that outside of cities like NYC, Philly, Chicago, SF, and maybe Seattle and Portland, very few US cities have a downtown worth visiting for tourism purposes. All the neighborhoods containing the people that actually made those places vibrant were bulldozed for office buildings and highways for suburban commuters to drive to said office buildings. End result is that after 7PM, unless there's a major convention or something happening downtown, there's no reason for anybody to want to be downtown. All the shops and restaurants are closed and very few people are on the street.
With the current rates in NYC, I'm certain they could afford the labor costs to build additional full service rooms. The issue there is crazies thinking another skyscraper going up in a sea of skyscrapers is going to somehow ruin the city.
I’m personally very excited by this, and I wouldn’t overthink this too much. I love Hyatt, and I’ve always been a fan of the Standard Hotels, so I’m excited for the new options.
I work with some of the design directors at Hyatt and the growth areas for them are the 4-star, aspirational brands, such as Thompson and Hyatt Centric, which are good for leisure and business travel. This fits perfectly with that plan. There’s...
I’m personally very excited by this, and I wouldn’t overthink this too much. I love Hyatt, and I’ve always been a fan of the Standard Hotels, so I’m excited for the new options.
I work with some of the design directors at Hyatt and the growth areas for them are the 4-star, aspirational brands, such as Thompson and Hyatt Centric, which are good for leisure and business travel. This fits perfectly with that plan. There’s a limit to how many 5-star properties a market can sustain (not in Asia or ME, but definitely in the U.S.).
They can leave the 3-star and 2-star properties sto Marriott and IHG.
What on earth is Hyatt doing? They have recognizable brands that they need to grow. This acquisition does very little for them in untapped markets.
This is a cool acquisition if you like partying with investment bankers and Instagram models, but not really that useful for well-adjusted people. Just buy Rocco Forte already...
Not sure this helps much with their footprint. Most of The Standard properties are in cities with existing Hyatt options already. They need footprint in cities where Hyatt has no options available at all.
I'd like to see Hyatt acquire Omni then Loews
So the thing about a the all-inclusives is you’ve got 4 family brands with Ziva at the top and sunscape at the bottom 4 adults only brands with Zilara at the top and breathless at the bottom. As I understand it, impressions is like a timeshare hotel brand and then Zoetry is kind of above both Ziva and Zilara, and is the true “luxury” resort. We stayed at one and I wasn’t super impressed, but the price points are typically higher than Ziva.
Just wondering...what does this have to do with Hyatt buying Standard Hotels and their plans for a Lifestyle group?
Ben asked:
"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."
Seems that Sean's reply answered that question well.
How would you rate Zilara/Ziva/Zoetry against Excellence? I only have experience with Excellence, but been trying to broaden my horizons with all-inclusives.
Hyatt has a pitiful footprint outside of the US, so this makes sense ...kinda.
It's too bad tho, another set of niche hotels to get overran by Americans and globalists DYKWIAs.
Hyatt needs to fix its Park Hyatt brand if it wants to do luxury. PH has a few truly excellent hotels and a lot of not-quite-there hotels with lackluster service and/or design, and some of the older hotels need to be renovated or town down. PH Jakarta and Buenos Aires are lovely, but Sydney and Paris are wildly overrated. (Sydney is a terrible hotel city all around. Looking at you Four Seasons.) Melbourne and Washington...
Hyatt needs to fix its Park Hyatt brand if it wants to do luxury. PH has a few truly excellent hotels and a lot of not-quite-there hotels with lackluster service and/or design, and some of the older hotels need to be renovated or town down. PH Jakarta and Buenos Aires are lovely, but Sydney and Paris are wildly overrated. (Sydney is a terrible hotel city all around. Looking at you Four Seasons.) Melbourne and Washington are awful, while NY and Chicago are not impressive, particularly for such key cities. The global footprint is not global. PH has twice as many hotels in China as compared with the whole of Europe.
The Park Hyatt in Washington is like a glorified Westin or Sheraton.
I agree. It is like Hyatt has no plan whatsoever except to buy whatever small or niche hotel group or booking platform comes on the market for acquisition.
Meanwhile, we still have entire states without a Hyatt Regency or even a Hyatt Place. It doesn’t look like anyone is wants to develop and open a brand-new Hyatt Regency these days.
It’s also concerning that Hyatt is moving down the road of franchising and...
I agree. It is like Hyatt has no plan whatsoever except to buy whatever small or niche hotel group or booking platform comes on the market for acquisition.
Meanwhile, we still have entire states without a Hyatt Regency or even a Hyatt Place. It doesn’t look like anyone is wants to develop and open a brand-new Hyatt Regency these days.
It’s also concerning that Hyatt is moving down the road of franchising and not managing upscale brands. View from the Wing wrote about this recently. This is what destroyed Marriott — once they started allowing franchisees (or third-party management companies) to manage upscale brands. It’s one thing for Hyatt or Marriott not to manage a Fairfield Inn or Hyatt Place.. It’s something altogether different when JW Marriott, Hyatt Regency, and so forth are no longer being managed by corporate.
Look at London. Hyatt was so desperate to expand its footprint that it took in a mediocre franchised Crowne Plaza owned by a shady Iraqi exiled politician and then also developed a lackluster Park Hyatt in a boring park of London that almost certainly depend on US embassy business for survival.
Years ago, Visa had the tagline, "It's everywhere you want to be." Well, Hyatt isn't. Or, if it is, it is not the property type one wants. For many, Hyatt absolutely works. For me, Hyatt has always been a compromise. Within the hobby, I've sensed that Hyatt apologists are willing to accept that compromise in the name of cents per point. They rationalize the tangible economic value over the intangible detractors.
To your point about...
Years ago, Visa had the tagline, "It's everywhere you want to be." Well, Hyatt isn't. Or, if it is, it is not the property type one wants. For many, Hyatt absolutely works. For me, Hyatt has always been a compromise. Within the hobby, I've sensed that Hyatt apologists are willing to accept that compromise in the name of cents per point. They rationalize the tangible economic value over the intangible detractors.
To your point about the Park Hyatt in London, it is a perfect example of compromise. And, in comments to other articles discussing that property, Hyatt apologists argue that its location is not that bad . . . it's not that inconvenient. Being a London regular, when I hear such arguments, I acknowledge that it is not possible to candidly discuss the matter . . . or Hyatt's shortcomings in general.
The big shoe to drop will be when Hyatt expands dynamic pricing to brands beyond M/M Smith . . . or systemwide. When that happens . . .
London is a great example. Hyatt went from having basically just the Hyatt Regency Churchill to having four Hyatt Regencies after THREE Crowne Plazas deflagged and converted. The Hyatt Regency Blackfriars is probably the best of the three ex-Crowne Plaza properties, but it's positioning itself as a 5-star hotel when it isn't. London has genuine 5-star hotels. The HYatt Regency Blackfriars is not one of them. It's on par with Marriott's Marriott brand. The Hyatt...
London is a great example. Hyatt went from having basically just the Hyatt Regency Churchill to having four Hyatt Regencies after THREE Crowne Plazas deflagged and converted. The Hyatt Regency Blackfriars is probably the best of the three ex-Crowne Plaza properties, but it's positioning itself as a 5-star hotel when it isn't. London has genuine 5-star hotels. The HYatt Regency Blackfriars is not one of them. It's on par with Marriott's Marriott brand. The Hyatt Regency Albert Embankment should be a Hyatt Centric or even JdV. Rooms are small, everything is still ex-Crowne Plaza, there's no club lounge, breakfast is on par with a Fairfield Inn or Hyatt Place, and the club lounge was closed after it left IHG's Crowne Plaza. And then there's the owner. I don't know how he passed corporate background checks. The hotel surely wasn't built with clean money.
Hyatt needs to do what IHG did in 2009 or 2010 when it de-flagged a bunch of dumpy Holiday Inn properties that wouldn't renovate. Or like Marriott did by taking old Marriotts and converting them to Delta, a lower end brand. There are a lot of Hyatt Regency properties in the USA (Denver Tech Center, Wichita, Pittsburgh, Houston IAH, San Francisco SFO, Rochester, Milwaukee, Clearwater Beach) that should be kicked out of Hyatt or downgraded to Hyatt or Hyatt Centric.