Hyatt flexing its muscles in select-service segment

Hyatt Hotels Corp., Chicago, will open 48 Hyatt Place and Hyatt House hotels across the Americas in 2022 and 2023, accelerating its growth among select-service brands.

Hyatt stated that the new hotels are expected to open in leisure, urban, drive-to, and mixed-use locations, 16 of which are new markets for Hyatt, including Montréal and Québec in Canada; Panama City Beach, Florida; Sacramento, California; Virginia Beach, Virginia; and more.

This expansion represents more than 6,400 rooms planned by year-end 2023, contributing to Hyatt’s net rooms growth, which was 19.5% in 2021 (this includes growth because of Hyatt’s acquisition of Apple Leisure Group). The anticipated Hyatt Place and Hyatt House hotels in the Americas represent almost 9% of Hyatt’s total pipeline and will add more than 20 new owners.

Hyatt Place Virginia Beach Oceanfront

Hyatt reported that Hyatt Place and Hyatt House hotels in the Americas outperformed its peers with an almost 400 basis points market share improvement in 2021 over 2019, with leisure, urban, and drive-to destinations as some of the top performing segments in 2021. Additionally, the Hyatt Place and Hyatt House brands in the Americas led occupancy rates across all regions and Hyatt brands with 65.1% in Q4 2021 or 61.8% for full-year 2021.

As of December 31, 2021, Hyatt Hotels Corp. had a pipeline of executed management or franchise contracts for approximately 540 hotels or 113,000 rooms globally, inclusive of Apple Leisure Group’s pipeline contribution of approximately 30 hotels, or 9,000 rooms, across six luxury all-inclusive brands. This pipeline represents a 12% expansion since 2020 and an expansion of more than 60% since 2017.

HOTELS spoke to Jim Tierney, Hyatt’s senior vice president of development and owner relations, to get more color about this update.

HOTELS: Are all of these Hyatt House and Hyatt Place deals franchises?

Jim Tierney: The 48 hotels opening in the Americas by year-end 2023 are primarily franchise relationships. We’re seeing incredible growth among our franchise business – in fact, more than 55% of Hyatt’s select-service portfolio currently operating in the Americas is franchised, and 39% of Hyatt’s total pipeline (as of 12/31/21) is projected to be franchise.

In response to this rapid growth, in 2021, we introduced our Global Franchise & Owner Relations Organization (FORG). With this dedicated group in place, we are cultivating closer relationships and providing franchise owners and operators with support and enhanced tools designed to maximize performance.

H: Elaborate on Hyatt Place and Hyatt House brand performance the past six months?

JT: For Hyatt Place and Hyatt House hotels in the Americas, we saw sequential quarterly improvement in RevPAR recovery in 2021 with RevPAR reaching 88% of pre-COVID levels in Q4 2021 and ADR at 96% of pre-COVID levels.

H: With supply chain disruptions and inflation, how are you managing development costs for the two brands ?

JT: COVID-19 has certainly presented both labor and supply chain disruptions, yet Hyatt remains committed to helping address these challenges in a variety of ways. We are making prototypes more efficient, simplifying building interior and exterior finishes and details to streamline costs, exploring modular construction for speed to market, and expanding our supplier acceptance so that we can collaborate with additional sources, particularly locally relevant solutions.

Rendering of the new four-story Hyatt Place prototype

H: How does the pipeline look beyond these 48 for the two brands?

JT: Approximately 46% of Hyatt’s total pipeline – across the Americas, EAME/SWA, and Asia Pacific – is select-service (as of 12/31/21), which includes the Hyatt Place, Hyatt House, UrCove, and Caption by Hyatt brands.

H: Any changes to prototype or amenities packages now or upcoming?

JT: To continue evolving and responding to market and owner needs, we developed a four-story Hyatt Place prototype for smaller markets, which may need a solution for a hotel between 90-110 keys. The rooms are the standard prototypical Hyatt Place rooms – separate spaces to sleep, work and play, as well as a Cozy Corner sofa-sleeper. However, we took square footage out of the overall building footprint, particularly in the public spaces, as well as in meeting spaces and business centers.