The listed accommodation group from Chicago, which had just nine hotels between Hamburg and Munich until last autumn, could soon increase the number of its German locations to 66. Group President Javier Aguila, who has recently been responsible for European business, announced this to the Handelsblatt.
“Since the agreement with Lindner, we currently have 33 hotels in Germany,” said the native Spaniard. “I think a doubling is possible in the future.”
There are still numerous white spots for Hyatt throughout Europe. The company will now focus on selected markets for growth, with Aguila naming Great Britain, France, Spain and Italy, among others. Germany is definitely one of them.
They don’t just want to grow with the Lindner hotel group, which is to receive the addition “JdV by Hyatt” in the future. The in-house lifestyle luxury chain “Thompson”, which has so far been represented outside of America in Madrid, is another example of a Hyatt brand that is conceivable in Germany. Where there is no successor in family-run houses, they want to grab it.
According to Aguila, there are also considerations about the German locations of the luxury brands “Park Hyatt” and for the design luxury brand “Andaz”, which so far only operates a house in Munich. “We are currently still working on exact plans,” says Hyatt Europe boss Aguila.
The European boss of the US hotel chain has ambitious expansion plans.
(Photo: PR)
On the other hand, concrete results can already be seen in Frankfurt: a new five-star hotel is to be opened there in December on Frankfurt’s Kennedyallee, which will be based on the style of the 1960s. Also in Hamburg, where the “Park Hyatt” in the Levantehaus had to close at the end of 2022, a “Hyatt Centric” is to open in the immediate vicinity in the second half of 2025.
After the departure of his longtime predecessor Peter Fulton, Aguila caused a sensation in Germany nine months ago. He agreed a deal with the family-run hotel company Lindner, which brought its 25 German and ten other foreign hotels under the Hyatt umbrella. The Americans provided the recently loss-making chain with plenty of outside capital for renovations and further expansions, imposing their own hotel concept on the Düsseldorfers and letting them participate in the “World of Hyatt” loyalty program. In return, Lindner now pays them a franchise fee.
Hyatt is in dire need of financial success
Financially, Hyatt has recently been under pressure. In 2022 alone, net losses piled up to $222 million, and in 2021 it was even a loss of $703 million. But the balance sheet is not only affected by the difficult corona years. The acquisition of competitor Apple Leisure Group (ALG) in October 2021 cost the US hotel chain $2.7 billion.
Aguila is partly responsible for this: the Spaniard had negotiated the purchase price. – but on the seller side. He had recently contributed his own hotel chain, Alua Hotels & Resorts, to ALG. Only after the deal did he switch to Hyatt management.
With the acquisition, Hyatt was able to expand its leading global position in the luxury vacation segment. According to its own statements, the group has a global market share of 13 percent for all-inclusive resorts, especially in the Caribbean. Standard & Poor’s (S&P) briefly downgraded Hyatt’s credit rating to “junk” due to the continued high financial burden.
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In order to reduce debt, Hyatt had already disposed of real estate worth 625 million dollars in 2022 – and thus achieved a better rating again. “Hyatt has long been pursuing the asset light plan, which envisages real estate sales worth two billion dollars, regardless of the S&P rating,” explains Aguila. The intention is to use the revenue to accelerate growth in the hotel business.
The acquisition of ALG proved to be a “good move” for Hyatt, says former salesman Aguila. “The transaction was very successful,” he says. “We already hit some milestones years ahead of time.” In fact, Hyatt’s stock price has nearly doubled since the deal was announced in August 2021.
Ambitions in the top class of hotels
According to management’s plans, Hyatt’s rapid expansion should also strengthen its in-house loyalty program. Customers should look for offers in the 1,350 affiliated hotels on the group platform – and not via online platforms such as Booking, Expedia or HRS, to which the group then has to pay commission for the mediation. “We also want to be more present with our brands in important markets such as Germany,” explains Hyatt Europe boss Aguila his strategy. With upscale boutique brands like “JdV by Hyatt” this is happening faster than in the traditional luxury segment.
But the group also wants to assert itself in the top hotel class. For example, Hyatt operates the legendary Hôtel du Palais in Biarritz, where French President Emmanuel Macron invited guests to the G7 summit in 2019, the Hôtel du Louvre in Paris and the Hyatt Regency in Cologne, where Bill Clinton, Michael Jackson and Elton John stayed.
The legendary hotel on the French Atlantic coast also belongs to the Hyatt empire.
(Photo: Getty Images)
The US group has recently taken an unusual approach to selling such luxury hostels. London-based travel booking platform Mr and Mrs Smith, which offers 1,300 boutique and luxury hotels and villas, was acquired for £53m last month. They also want to use them to convey “curated luxury hotels” where Hyatt does not operate any hotels itself, such as on the Fiji Islands, in Croatia or on Iceland.
In order to prevent a competitive situation with the company’s own bonus program “World of Hyatt”, there should be a distribution agreement with it in the future. Aguila has not yet revealed exactly what that will look like. However, industry experts believe that the deal primarily targets the Intercontinental Hotels Group (IHG). So far it was the British adversary who worked closely with “Mr and Mrs Smith” – and now has to look for a new luxury sales channel.
More: Lindner hotels slip under the Hyatt umbrella.