NEW YORK — Hyatt Hotels Corp. forward bookings for business transient travel in New York in October are pacing 20% higher than 2019, according to company CEO Mark Hoplamazian, speaking at the Skift Global Forum here at the Javits Center.
Calling the numbers “shocking,” Hoplamazian cautioned that October is always the busiest transient month and one month does not a trend make. However, he added, “We had been wondering if business transient would just continue to move in a sideways motion.”
Noting Bill Gates’ well-known comment in 2020 that all business travel would be down 50% permanently, Hoplamazian said Gates was wrong. Group business, he said, is also booming. “Why are so many people at this event?” he asked, adding that it’s the power of human connection that has been underestimated. Human connection is what makes creativity work and elevates the human spirit.”
Hoplamazian said the real boom in the last few years has been in leisure, which is now normalizing seasonally. He added, “I think we will start to normalize in general; I don’t see evidence of significant rate declines.” He said there are still significant gaps relative to pre-pandemic occupancies.
On international travel, Hoplamazian called U.S. to Europe is “all good” and said Asia numbers remain at a fraction of the past and customers from that region will be the next big incremental boost to sustain hotel performance.
Speaking of recent acquisitions, Hoplamazian said the company always looks at the potential acquisition’s culture and if the culture is going well “all things are possible.”
In the case of Dream Hotels, the customer base has a similar income but is 20 years younger, “giving us an expansion of our customer groups,” and adding, “we thought it was a great opportunity to broaden our reach.”
Hyatt also decided it needed more resorts, Hoplamazian said, noting the company mix of 25% leisure versus 75% business. It bought Apple Leisure Group, an all-resort operator.
Dream had a 60% leisure base. I
In general, said Hoplamazian, “We decided to go in that (leisure) direction. The fastest growing brands were in lifestyle, so it wasn’t rocket science.”
IN THE MID
On the day of the event, news broke about Marriott’s new midscale brand targeting EMEA, named Four Points Express by Sheraton.
Asked about it, Hoplamazian said that Hyatt Studios is the company’s response in the mid-market, with the first openings next year. He said he had been “dismayed and shocked” to learn through research that even Hyatt’s best loyalty customers spend more outside its system than within. That was often because there was no Hyatt in a market or because the price was too high. He said Hyatt has the same penetrations in major gateways as big competitors, like Marriott and Hilton, but when it comes to suburban, interstate and tertiary markets: “We fall off the map,” he said.
With the goal of coming up with a differentiated mid-market concept for Hyatt, it took five months to develop Hyatt Studios against 21 months for Hyatt Place in 2007 because of a more efficient and effective process. Hyatt Studios, Hoplamazian said, “means a bunch of owners who are new to us.”
Asked about if he has any concerns about domestic Chinese travel because of political tensions, Hoplamazian said so far there is no evidence of that because hospitality is not seen as a sensitive industry when it comes to national security. He said the company had always stressed food & beverage in Asia and that goal has differentiated Hyatt in the market.
Story contributed by Harvey Chipkin.