Chicago-based Hyatt made seismic inroads in the leisure travel sector in recent years with acquisition plays for brands across the all-inclusive resort and lifestyle hotel space.
But the company has lacked in a key area that Wall Street covets: midscale brands that can notch rooms growth at a significantly faster clip than pricier-to-build resorts and lifestyle hotels.
That changed this year with the opening of the first Hyatt Studios (which Hyatt bills as an “upper midscale” extended-stay brand) in Mobile, Alabama — proof Hyatt is throttling forward with growth plans in even secondary and tertiary markets. Further, the opening of the hotel coincided with the company announcing another player in this space: Hyatt Select, a conversion-friendly brand in the upper-midscale space.
On the Hyatt Studios front, the company is reporting more than 50 confirmed deals for new hotels with 27 of those in markets new to Hyatt. Twenty-two of those deals involve new-to-Hyatt owners — a signal the brand is opening new doors for the company on a variety of fronts. The company is also bullish the brand can work in Europe, Asia, and the Middle East.
While the one-two brand addition punch shouldn’t be seen as Hyatt steering away from the premium leisure segment company leaders have hyped in recent years as a key growth opportunity, the Hyatt Studios and Hyatt Select arrivals show the company increasingly has options for owners and guests at all price points — an omnichannel brand offering seen as a necessity to stay competitive on today’s hotel playing field.
“As we looked at our portfolio — it has grown and evolved with iconic locations around the world — we realized that our customer base also travels to Mobile, Alabama, and they have nowhere to stay,” Daniel Hansen, head of Americas development at Hyatt, said in an interview with Hospitality Investor. “Our customer base expects quality. It doesn’t matter what chain scale we’re in, whether it’s luxury or upscale or even upper midscale, we want to compete at the highest end of that chain scale. So, when we launched Hyatt Studios, it was to make sure that our best customers had access to Hyatt quality and experiences in markets where we previously didn’t have a presence.”
Earlier this spring, Hospitality Investor checked into the first Hyatt Studios, where the paint was still fresh and the parking lot full of guests occupying the apartment-style accommodations spread out over four floors in a property fronting Interstate 10.
The king-sized studio suite was brightly decorated and featured a fully stocked kitchenette suitable for cooking and dining during a longer stay as well as a seating area and workstation. The layout was roomy, the bed was comfortable, and yours truly enjoyed a full 8 hours of uninterrupted shut eye — not always an easy feat for a travel journalist.
Downstairs, guests could find a fitness center (that owners can expand into larger layouts depending on anticipated demand), laundry facility and a grab-n-go breakfast station with muffins, fruit, granola bars, coffee, and tea. A 24/7 market was also available for guests to buy more substantial food items and toiletries. Each property also features EV charging stations.
“We designed the brand for the seven-plus night stay — the essential worker on a job site, the traveling nurse, the contractor — someone who returns to the same market again and again,” said Emily Wright Zamorski, a vice president and global brand leader at Hyatt. “But we’ll also have demand from the one-to-two-night guest, like traveling sports teams or weekend tournament families. Both segments are part of the design.”
Is it akin to staying at an ultra-luxurious Park Hyatt or an Impression by Secrets?
No, but this kind of product is an entirely different play for Hyatt: It’s about rounding out the brand portfolio to appeal to a broader customer base — and have a new on-ramp into the World of Hyatt loyalty system, which fuels more owner and investor interest when it comes to inking new hotel deals.
Though, company leaders maintain the Hyatt brand ethos will be to operate at the premium end of each segment it parks a new offering.
“This is a view to our future, differentiated offerings across distinctive brands and a highly focused approach to leveraging our loyalty program and the insights that matter the most as we serve high-end travelers across more and more of their stay occasions,” Hyatt CEO Mark Hoplamazian said on a company earnings call in February. “This leads to greater loyalty and share of wallet among our members and customers at a higher average rate and at a lower cost of acquisition, driving better returns for our owners.”