Hyatt Hotels has shifted its growth strategy towards building more roadside hotels in suburban areas, focusing on practicality over luxury. This move allows for quicker construction, lower operating costs for owners, and expansion into untapped markets where Hyatt does not yet have a presence. The company has seen a 25% increase in its select-service pipeline in the Americas over the past three years, indicating a strong emphasis on this segment.
The introduction of new brands such as Hyatt Studios and Caption by Hyatt reflects the company’s interest in moving towards more streamlined and efficient hotel concepts. Caption by Hyatt, an upscale select-service brand, has undergone a significant refresh to provide increased market flexibility and a more efficient food and beverage model. Hyatt Studios, a midscale extended-stay brand, aims to appeal to a broader range of guests with about 4,000 rooms in the pipeline and 250 deals in the negotiation stages.
Hyatt’s approach to select-service hotels includes offering greater flexibility in design and amenities to cater to the needs of local markets. This shift allows owners to customize features like pools or meeting spaces based on the demand in their specific area. Furthermore, the company has revised its renovation schedules based on performance metrics rather than arbitrary timelines, reflecting a pragmatic approach to property maintenance.
Despite the trend towards upscale and luxury brands in the hotel industry, Hyatt’s focus on expanding its select-service portfolio in untapped markets is driven by the desire to enhance its loyalty program. By offering more locations in areas where guests need to be, Hyatt aims to attract more World of Hyatt loyalty program members who tend to book directly. This strategy not only benefits guests by providing more options but also entices owners to consider Hyatt for future projects, ultimately increasing the company’s market share.
While Hyatt’s foray into select-service may seem counterintuitive compared to its luxury competitors, the strategic expansion into new brands and markets is designed to strengthen the loyalty program and attract more direct bookings. By meeting the needs of both guests and owners, Hyatt aims to bolster its presence in the select-service segment and capitalize on the growing demand for practical, cost-effective accommodation options.
In conclusion, Hyatt’s growth strategy focuses on expanding its select-service portfolio through brands like Caption by Hyatt and Hyatt Studios to meet the needs of travelers in suburban and underserved markets. By offering greater flexibility in design and amenities, the company aims to appeal to a wider range of guests and attract more World of Hyatt loyalty program members. With a pragmatic approach to property development and a focus on operational efficiency, Hyatt is positioning itself for long-term success in the evolving hospitality industry.
