|
remainder of the year , the bulk of which is delivered by rate . Next year ’ s pace , he said , was plus-7 %, with the occupancy earning a higher split over rate . “ You ’ re now starting to see some demand fill out of that lag that we ’ ve had in occupancy ,” Hoplamazian said . “ Total RevPAR of that base growth in group is super healthy and very well balanced .”
Bottarini called momentum on the business transient side “ super encouraging .” In Q2 , Hyatt reported 12 % revenue growth in the segment and surpassed pre-Covid levels in the U . S . There has also been a flip in the types of business travelers hitting the road . In the wake of COVID , the first segment to come back harder were the SMEs , or small- to middle-sized enterprises .
Now , the larger corporations are back “ and since a lot of our deals with them have dynamic pricing elements to it , the rate increases are significant ,” Hoplamazian said .
|
A DEVELOPING SITUATION A looming interest-rate cut should have a profound and positive effect on future hotel development , which has been stunted in the years following the pandemic . Most of the capital up to now , Hoplamazian pointed out , has come from regional and local banks that require personal guarantees . “ There are constraints in terms of what developers can actually do ,” he said .
Higher construction costs and interest rates are part of why Hyatt launched Hyatt Studios , billed as an uppermidscale , extended-stay brand , which Hoplamazian said is starting to see more traction in construction starts . Companies like Hyatt , Marriott International and Hilton have leaned into offering brands , especially in the extended-stay segment , that are more geared to travelers seeking value at a lower price point . These include Hilton ’ s LivSmart Studios and
|
Marriott ’ s StudioRes , which accompany brands like Echo Suites from Wyndham Hotels & Resorts .
“ These are much smaller projects and it ’ s a little easier for a developer because it doesn ’ t cost them a massive amount of their own capital ,” Hoplamazian said . Around two-thirds of Hyatt ’ s current pipeline is outside the U . S .
As Hyatt looks to develop new hotels , it ’ s doing so in an asset-light capacity . Part of its mandate has been to pare down its owned real estate . It recently busted through its commitment to divest $ 2 billion in owned assets . In August , it completed the sale of the Hyatt Regency Orlando for $ 1.07 billion .
More deals are on the way . The Andaz London Liverpool Street has reportedly been under contract to be sold since 2022 ; similarly , Hoplamazian noted that the Hyatt Grand Central New York , which Hyatt and the Pritzker family have owned outright since
|
1996 when it acquired former President Donald Trump ’ s stake in the property , is under contract to be sold . The hotel is set to be razed to make way for a new one with a much smaller room count — around 500 keys compared to the now more than 1,300 . It ’ s part of the redevelopment of 175 Park Ave . by RXR Realty and TF Cornerstone that was supposed to get underway in 2023 . A Hyatt spokesperson said that Hyatt continues to collaborate with TF Cornerstone and RXR on the project and confirms a purchase and sale agreement remains in place .
In August , Hyatt announced plans to acquire Standard International for a base purchase price of $ 150 million , with up to additional $ 185 million over time as it adds more properties to its portfolio . Since 2017 , Hyatt has made $ 3.4 billion worth of investments in asset-light companies at an approximate 9x to 9.5x multiple .
|
The Hyatt Grand Central New York ( here ) and Andaz London Liverpool Street ( at left ) are both under contract to be sold . |
|||
Oct / Nov 2024 hotelsmag . com 23 |