Hyatt’s grip on luxury and lifestyle hotels widened last week with news that the Chicago-based hotel giant plans to acquire the 1,500+ guest reservation platform Mr & Mrs Smith. luxury boutique hotels.
But that doesn’t mean the company is going to do better than a major competitor from whom it snatches the brand.
At first glance, Hyatt’s gain comes at the expense of IHG Hotels and Resortswhich currently has a partnership with Mr & Mrs Smith where IHG One Rewards members can earn and redeem points when they stay at participating Mr & Mrs Smith hotels.
There were complaints that it was always a bit clunky to book a Mr & Mrs Smith hotel through IHG, as not all of the roughly 1,500 hotels took part in the partnership. Also had to scroll through or delete branded options on an IHG search to find one of Mr & Mrs Smith’s hotel options.
“Even if Hyatt owns the booking platform, how will it do better to bring these hotels together in its World of Hyatt orbit?” This is a question I’ve received a lot over the past week from readers and analysts.
Hyatt CEO Mark Hoplamazian didn’t really provide many details on the company’s investor call on Thursday to release its first-quarter results.
“We will be very careful how we integrate hotels that are part of the system,” Hoplamazian said in response to a question about how Mr & Mrs Smith hotels might compete in some markets with pre-existing Hyatt properties. “All the hotels we plan to stay on the platform (Mr & Mrs Smith), but that doesn’t mean they will all be integrated.”
Think along the lines of Hyatt’s partnership with Small Luxury Hotels of the World, which not all SLH properties participate in. But isn’t that a bit odd considering that Hyatt will actually fully own the Mr & Mrs Smith platform?
TPG asked for more details on what the onboarding process will look like. We didn’t have a lot of information.
Subscribe to our daily newsletter
“Hyatt is evaluating, but we are unable to share specific examples,” a Hyatt spokesperson said in response to TPG’s question regarding the Mr & Mrs Smith integration and competition. with existing Hyatt hotels. “We will have more details on the integration of Mr & Mrs Smith into World of Hyatt after the deal closes.”
Details might be limited, but there was plenty of fodder on Thursday’s call about why Hyatt is acquiring the Mr & Mrs Smith brand.
Hyatt has been on a luxury and lifestyle hotel buying spree for several years, from the Acquisition of Two Roads Hospitality which added the Thompson Hotels and Joie de Vivre (now JdV by Hyatt) brands to the newer brands Acquisition of Apple Leisure Group for $2.7 billion which strengthened Hyatt’s presence in the luxury all-inclusive resort industry. More recently, Hyatt acquired Dream Hotel Groupboosting the company’s presence in New York as well as the broader lifestyle hospitality industry.
The Mr & Mrs Smith deal adds to this theme, but it brings a mix of hotels that are much smaller than you would typically expect with a big brand and loyalty affiliation. But these also play into the game of Hyatt’s expensive luxury hotels: The typical nightly rate for a Mr & Mrs Smith hotel is around $400, Hoplamazian said.
“They are small, so they are not hotels that would naturally be part of a larger brand like our portfolio, and we believe this is a massive expansion of World of Hyatt member access. to hotels,” he added.
Our eyes will be focused on how easy it is to integrate all of these hotels to a level where members can earn and redeem points at scale.
The return of Hyatt business travel
It was a good quarter for Hyatt, with the company posting a profit of $58 million. This stems in part from the broader hospitality industry’s recovery from the pandemic, which is driven by strong leisure demand and high hotel rates.
According to Joan Bottarini, Hyatt’s chief financial officer, the company’s overall hotel performance in March was 8% above 2019 levels and set an all-time high in the company’s history.
Expect higher hotel rates to continue and even rise, as Hyatt executives were the latest in the industry to say they expect better-than-expected results for the duration of 2023.
The recovery in Asia-Pacific, as well as the growing demand for group and business travel, encourage this optimism.
Hyatt’s all-inclusive plans go global
The acquisition of Apple Leisure by Hyatt boosted the company’s presence in the all-inclusive resort industry as well as in Europe. Hyatt’s European footprint has increased by 60% with this agreement. But he now aims to take the Apple Leisure brands, which include offerings like Secrets and Dreams, further overseas.
“We have responded and pursued additional regions in the Middle East and Asia, so I would be surprised if we don’t end up with new projects in those two regions soon because the level of interest is very high,” Hoplamazian said. . .
Although Hyatt has a significant presence in both regions with its traditional hotel brands, it does not currently operate any all-inclusive brands in these parts of the world.
“It would be a relatively new format for most of these regions, so we are taking it very carefully,” added Hoplamazian.