How empty rooms create a brand option for hyatt

Atlanta – Dan Hansen said that a simple search on Hyatt.com can show you the development opportunities for the new Hyatt -Select brand – simply find the areas on the map where Hyatt has no locations.

“You can see it from the search,” said Hansen, head of the development of Americas for Hyatt. “They type in cities in which we have nothing that we can pursue. We pursue all of this so that we know where our guests are on the move and where we have no distribution.”

At the beginning of this month, Hotel Investment spoke at the Hunter Hotel Conference in Atlanta with Hansen about why Hyatt created the new brand and gives the owners with aging hotels flexibility to stay in the company’s system and what the owners tell him.

Hansen said that the converting Hyatt-Select was a good compliment for the new offer for an extended start (while the new brand for the Exten Prize Stay Hyatt Studio will exist around 80% new build, Hyatt Select will be around 80% conversions). He also believes that Hyatt Select can also be real strength worldwide.

“We have been thinking about it for several years: How do we grow this distribution?” he said. “In Latin America there is really no demand for extended stays in the United States. Hyatt Studios is not quite right in the USA, but that will fit perfectly.”

Hansen also mentioned China as a burgeoning opportunity for Hyatt Select.

“They go outside a hotel in China and there are 100 restaurants,” he said. “You don’t really need a kitchen. So why would you do that? This not only fulfills in the United States, but worldwide.”

While Hansen said that Hyatt never looks at a brand and thinks: “We have to have 1,000 of them”, this opportunity exists for these new brands. He mentioned Mobile, Alabama, where Hyatt recently opened his first location for Hyatt Studios, as a good example.

“(You) will probably be our fastest growing brands,” he said. “But you should expect these, like most other selection service brands, to grow in hundreds and hopefully in thousands.”

To go for hotels

Last year Hyatt had to lower its net space instructions for several reasons.

The Hyatt -Select brand now offers owners of hotels (e.g. an aging hyatt place real estate) a place where you can stay in hyatt system. Hansen, previously President and CEO of Summit Hotel Properties in Austin, said that he lived this scenario.

“I was on the other side, on the owner side, in some of these hotels. They worked great, but they could be in a market in which a large demand generator, a company, could have moved, and this next outcome became a place,” he said. “It does not mean that people don’t stay there, but it is more difficult to justify a complete renovation for a Hyatt location, which probably costs 5 million US dollars, and the operating model due to the extensive free breakfast and the entire staff.

Hyatt Select will give the company and the owners more flexibility in the coming years, said Hansen.

Now we can offer the owners the opportunity to have a beautiful property and still earn money. Because if you cannot grow your reserves and the property cannot invest again, everything is connected. It gives you the opportunity to keep these owners.

Dan Hansen

“Now we can offer the owners the opportunity to have a beautiful property and still make money,” he said. “Because if you cannot increase your reserves and cannot invest the property again, everything is tied together. It gives you the opportunity to keep these owners. These are still good locations. It is only more difficult to get the price there because there may be less demand there.”

Hyatt has a legacy to always play at the highest end of all segments in which they take part, said Hansen.

“Due to the shift of some of these locations, we were in a position in which we could not only deliver this for economics,” he said. “We have a number of people from our existing portfolio with older hyatt locations that will use this conversion opportunity.”

Since Hyatt places are defined as upscale, these hotels would technically shut down the brand, but Hansen said in this scenario that this would not be the driving decision for the owner.

“From the perspective of profitability, I would tell you that it would increase. It should be no matter what the chains’ scale is,” he said. “I always looked at it as if it were the end result for an owner, because if I can’t achieve a good return, I cannot reject in my property. If I can’t go into the property, my guest services and the guests suffer. Then you can lower your rate.

What owners say

According to Hansen, the addition of Hyatt Select solves several problems for Hyatt and its owners, especially for those who have temporary guests who are not looking for a hotel with an extended stay.

“This enables us to meet the needs of locations that do not have the demand for extended bumps, but also react faster, since we can perform some conversions that we would not perform from a new build (point of view),” added Hansen.

While Hyatt has not yet announced new commitments for the new brand, Hansen said that this could be possible in the coming months.

We have a number that is very close. Part of it is to get on site and not only evaluate the quality of the furniture and devices, but when they come from another brand, what is your IT? It is more complicated than building up a sign or entering new sofas.

Dan Hansen

“We have a number that is very close. Part of it is to get on site and not only evaluate the quality of the furniture and devices, but when they come from another brand, what is theirs?” he said. “It is more complicated than building up a sign or inserting new sofas.”

Since there are about 300 US markets in which Hyatt has no representation, it is not difficult to see how many markets could be available for the Hyatt -Select brand. Hansen said instead of concentrating on pure numbers, the real success in the quality of the project after conversion will be.

“Similar to Hyatt Studios, for the first 25, which are open and operational, this will be the real confirmation,” he said.

Hansen said it was probably a three -year run for Hyatt Select to be 25, and it could take between 12 and 18 months for a location to be open. He said that the decision about the markets and locations will do just as much about demand generators such as the location, especially how the complete return-to-work trend in the United States continues to grow in the United States

“The phenomenon of return to work has started to create a lot of demand in and around large corporate headquarters,” he said. “We have just started seeing the start of it … There is a demand driver that could make some of these markets that may not look as profitable during Covid as people come back to work.”