Joe McConnell
Travelers who join the World of Hyatt loyalty program have more and more ways to earn and redeem points, and the Chicago-based hotel giant isn’t done adding variety to its offerings just yet.
Hyatt reported a healthy $359 million in second-quarter profit Tuesday morning. The company is riding high on rising business and group travel demand, while leisure travel, which has led the industry during the coronavirus pandemic, is expected to stabilize later this year. But company leaders point to a mix of new partnerships and brand offerings, from more than 700 hotels on the Mr & Mrs Smith platform to a new alliance with luxury outdoor resort brand Under Canvas, as fueling the company into a new era.
The numbers underscore this point: World of Hyatt membership is up 21% over last year. Additionally, Hyatt CEO Mark Hoplamazian has highlighted the loyalty program’s growing reach as a driver of overall growth. The company’s 130,000-room development pipeline is at a record high.
“Our goal to expand our network footprint as we grow allows us to offer more options to our members, increasing their loyalty to Hyatt and making Hyatt more attractive to potential developers,” Hoplamazian said Tuesday in a financial results conference call.
Mr. and Mrs. Smith are off to a flying start
One of the biggest launches on the Hyatt platform this year has been the Mr & Mrs Smith boutique and luxury hotel booking platform, which Hyatt acquired last year. While not all Mr & Mrs Smith hotels are slated to join World of Hyatt, an initial group of more than 700 properties joined the loyalty network earlier this year, Hoplamazian shared a little more detail on what that looks like from a loyalty perspective.
Over 80% of those Mr & Mrs Smith hotels that initially participated in World of Hyatt received bookings from loyalty members. Of those, 20% of total bookings came from Globalists, the highest level in the World of Hyatt loyalty network, and two-thirds of those total World of Hyatt bookings were for cash rates rather than award redemptions.
Of course, these early booking statistics may support the criticism that award redemptions at Mr & Mrs Smith hotels aren’t as strong as at some of Hyatt’s historic properties, which participate in the company’s award table. Mr & Mrs Smith hotels participate in dynamic pricing, however, any room type at a Mr & Mrs Smith hotel will be available for award redemptions rather than the designated room and suite types found at hotels participating in the award table.
By the end of the year, Hyatt executives expect more than 1,000 Mr & Mrs Smith hotels to be part of World of Hyatt, significantly more than the approximately 350 Small Luxury Hotels of the World that participated in the loyalty program before SLH and Hyatt severed their relationship.
Suitable for every lifestyle
Along with the integration of Mr & Mrs Smith, Hyatt has recently made strides in various lifestyle travel offerings. The company launched an alliance with Under Canvas, a luxury outdoor resort brand known for its luxurious safari-inspired canvas tent accommodations. World of Hyatt members can book stays at Under Canvas camps and the new Ulum Moab resort through Hyatt to earn and redeem points.
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In Europe, Hyatt plans to leverage its newly acquired Me and All Hotels brand to expand its presence in the lifestyle hotel sector. The brand, acquired from Hyatt’s partner Lindner Hotels in Germany, works well for conversions of existing properties. Don’t rule out a global expansion for this Europe-focused brand under Hyatt’s watch.
“It is important to note that our strategic positioning and brand mapping are designed to aggressively expand and capture market share across Europe,” Hoplamazian said. “While we initially expect the brand’s chain scale in Europe, we believe there are opportunities to grow the brand globally, offering more destinations for our members and guests to enjoy a curated lifestyle experience.”
Are you hinting at Standard Hotels joining the group?
Those looking for confirmation that Hyatt was looking to strike some kind of deal with Standard International, the parent company of the trendy Standard Hotels brand, were left empty-handed Tuesday… sort of. Hoplamazian seemed to indicate that there was a flurry of growth opportunities on the horizon, but don’t count on them looking like traditional acquisitions.
“We have been and will continue to be very focused on our organic and inorganic growth, ensuring that the expansion of our brand and property portfolio creates opportunities for new guests to find us and join World of Hyatt,” Hoplamazian said.
It’s a lot of nothing in terms of specifics, but Hyatt’s CEO did provide a bit more context on how the company is shaking things up globally through various partnerships. It could be similar to how Hyatt operates in Germany with Lindner Hotels, where it’s not so much an acquisition as a shift of hotels into existing Hyatt brands like the JdV by Hyatt Collection brand.
“I’ve been talking since the first quarter of this year about how we see a solid opportunity, and real opportunities, not just theoretical, to do portfolio deals, and sometimes that means doing a strategic partnership, like the deal with Lindner Hotels where we signed franchise agreements for all of those hotels,” Hoplamazian said. “Sometimes that comes in the form of a brand acquisition or a management platform.”
But there is always an underlying principle that guides Hyatt along this path.
“We’re also very focused on making sure we understand the customer base as we always do,” Hoplamazian said. “That’s where we start and each of these acquisitions or partnerships that we do has growth that’s already identified.”
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