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hotel within its brand family can ’ t keep up so it may require knocking it down a level to another brand . The problem for Hyatt , Hoplamazian said , was that it doesn ’ t have a brand that necessarily allows for this course of action . “ If you look at the structure of our brand portfolio , we do not have a brand into which we would encourage owners who want to downgrade their hotels to something that ’ s at a lower level , just to maintain those rooms in our portfolio ,” he said , offering that that is different than its competitors . “ Some of this is just maintaining brand integrity across our brands .” He also called this latest round of attrition an anomaly . “ Serving the high end of each segment requires investment into the properties . Our owners recognize that they ’ re well capitalized and that ’ s why our attrition has historically been so low . It is because owners have invested in the properties and they ’ ve been performing ,” he said .
“ The overall momentum remains intact and we ’ re looking into a first quarter of 2025 where gross openings are tracking to year-over-year net rooms growth of more than 6 %,” Hoplamazian said . “ This is supported by significant ongoing growth of our pipeline and increasing construction starts and improving conditions for hotel development generally . Second , we ’ ve had a significant level of conversions that have benefited us over time and we expect to engage in conversions portfolio deals .”
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TALKING TRANSACTIONS Hyatt has been active on the M & A front . Beyond its Standard International deal , Hyatt just this week announced plans to enter into a longterm , asset-light strategic joint venture with Spain ’ s Grupo Piñero , whereby it will manage all Bahia Principe-branded hotels and resorts and own the Bahia Principe brand outright . This was off of the wild success that Hoplamazian underscored of its past deal for Apple Leisure Group in 2021 . At the time of the deal , Hyatt doubled its global resorts footprint through the addition of ALG ’ s AMR Collection brand portfolio , which comprised of brands including Secrets Resorts & Spas , Dreams Resorts & Spas , Breathless Resorts & Spas , Zoëtry Wellness & Spa Resorts , Alua Hotels & Resorts and Sunscape Resorts & Spas .
“ Every portfolio has got its own dimensions and different tenor and quality of the contracts that underlie the management agreements and the franchise agreements ,” Hoplamazian said . “ All of that is taken into account for deals that we do and deals that we don ’ t do . Our goal has been to add brands that have equity and brand rationale unto themselves that are distinctly identifiable and can be described as offering a different type of experience than other brands that we already own . I don ’ t think we ’ ve overlapped in terms of buying a brand that is the substantive equivalent of an existing brand .”
Hyatt ’ s glide path has
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A guestroom at Park Hyatt Marrakech .
been one of asset-light M & A or partnership with contemporaneous divestment of owned assets . Earlier this year it met and exceeded its asset divestment goal of $ 2 billion . It completed the sales of Park Hyatt Zurich , Hyatt Regency San Antonio and Hyatt Regency Green Bay in the second quarter , accounting for $ 1.5 billion in gross proceeds . In mid-August , it closed the sale of the 1,641-room Hyatt Regency Orlando to affiliates of RIDA Development Corporation and an Ares Management Real Estate fund for approximately $ 1.07 billion . It doesn ’ t mean , according to Hoplamazian , that it won ’ t still acquire assets if they are in areas where Hyatt doesn ’ t already have penetration or is underrepresented . He cited the 2012 acquisition of the Hotel Nikko Mexico , which Hyatt acquired for $ 190 million at
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the time and subsequently rebranded it as the Hyatt Regency Mexico City . Hyatt sold the hotel a couple of years ago for more than $ 400 million .
“ We ’ ve executed a few different acquisitions of specific hotels or groups of hotels where we felt that we had a clear pathway to reselling those hotels , but they were specifically because they were exemplary in their location ,” Hoplamazian said . He added that on some deals Hyatt will deploy key money or invest in the capital stack of the hotel . It ’ s not alone : In a competitive hotel market , where there is scarcity of supply , many lodging companies use carrots like key money , an upfront payment to a hotel owner to secure either the franchise or management rights , which over time does not to be paid back , to secure a deal .
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56 hotelsmag . com Jan / Feb 2025 |