What is Hyatt’s ambitions and priorities for 2024 and beyond, and what factors have shaped these priorities?
Growth is first and foremost. We compete in the top half of lodging, from upper-mid to luxury. We want to build a presence in places where we are not, increase our presence in markets where we are under-represented even though we have hotels there already, and be in locations where our customers want to be.
A lot of that, over the last several years, has been focused on the luxury leisure market. A good example of what we have achieved in this aspect is our all-inclusive business, which we call The Inclusive Collection. This started in 2017 when we launched Hyatt Ziva and Hyatt Zilara, and then in late-2021 we bought Apple Leisure Group, which was a terrific acquisition that solidified Hyatt as the largest luxury all-inclusive company and brand globally.
Leisure travel has really grown exponentially during Covid, and continues to be a very popular motive for travel and a reason for our company’s growth. While business and events travel have started to pick up speed now, leisure travel demand has not abated.
Through 3Q2023, 72 new hotels joined the Hyatt portfolio this year. Notable openings in 3Q2023 (in Asia) included seven UrCove by Hyatt properties and Andaz Macau.
As of September 30, Hyatt has a pipeline of executed management or franchise contracts for approximately 600 hotels with approximately 123,000 rooms.
Last year, our focus was on bringing the luxury all-inclusive concept into Asia-Pacific – and we are still working on it. We’ve done a lot of work and identified the markets for us – Thailand, Vietnam, China, Japan, the Maldives and Australia, just to name a few.
We know where there are a lot of leisure traffic but not a lot of all-inclusive resorts, especially luxury all-inclusive resorts.
It is very surprising to me to see that this part of the world does not have many luxury all-inclusive products because the customer base here will love this concept. It is so easy to understand, and we do it so well (that customer satisfaction ratings are high).
Our all-inclusive resorts have the highest customer service scores among all of our hotels. This just shows how much the concept resonates with customers.
We will also focus on growing our select service through brands like Hyatt Place, Hyatt House, Caption by Hyatt, and UrCove by Hyatt. Select service properties allow Hyatt to go into tertiary markets or small markets.
Another thing we started in 2023, which we absolutely will continue to focus on in 2024, is new platforms. We acquired Dream Hotel Group, a US-based luxury lifestyle group with a huge focus on restaurants and bars. It further exemplifies our commitment to the lifestyle space. After that, we acquired Mr & Mrs Smith, a distribution platform with 1,500 hotels, mostly in the upscale and luxury space. Both give World of Hyatt loyalists a lot more experiences to choose from.
Third, we are focusing a lot more on wellness. This started some years ago, with the acquisition of Miraval, but further enhanced by our work on developing our spa and wellness programmes across our hotels and resorts. The focus spreads across physical and mental well-being, which people greatly value post-Covid.
Just this month we launched Wellbeing Collective, a collection of Hyatt properties around the globe that offer tailored well-being experiences to meet the specific needs of travellers. For a start, the Wellbeing Collective has 30-plus properties and we will keep adding to it. There are several properties in Asia-Pacific that are part of this collection, such as Grand Hyatt Bali and Hyatt Regency Bali in Indonesia; Grand Hyatt Goa in India; Hyatt Regency Danang in Vietnam; Hyatt Regency Hua Hin/The Barai in Thailand; and Park Hyatt Sanya in China.
What does Hyatt’s expanded portfolio of brands mean for Asian real estate developers and owners?
I’ve been with the company for almost 20 years now, and I started off when it had five brands all aggregated at the top. When you have five brands, you don’t have much opportunities to work with your developers and owners, and to really broaden your footprint.
Now, with 29 brands, we can have an all-inclusive offering and a luxury offering at the same beach, or a Hyatt Regency, Grand Hyatt and Hyatt Place in the same city. We can better fit a price point and development budget, and offer travel experiences across different markets based on a type of travel, like MICE, and reason for travel, like visiting family.
You spoke of the company wanting to further grow its upper-mid to luxury portfolio while expanding the select service brands in tertiary cities. Are your Asian developers and owners also keen on having projects in these hotel categories?
Well, yes. I’ll take UrCove by Hyatt as a good example. It is a growing upper-mid-scale brand unique to China, created to cater to the Chinese traveller in China. It was a joint venture with BTG Homeinns, and it allowed us to enter primary and tertiary cities, as well as into the ring roads where we did not have a product.
The brand was created specifically to the type of owner.
Hyatt Place and Hyatt House are other examples, both developed with regional or local developers and/or owners.
What new brands is Hyatt bringing into Asia-Pacific, and why will they be exciting for the travel marketplace?
Atona, a brand of modern hot springs ryokans, will see its first property open in 2025. It will be a Japanese-inspired, contemporary but also traditional experience just for Japan – very local, very authentic, very updated.
We have also done a terrific job with our soft brands – Unbound by Hyatt, JdV by Hyatt, and Destination by Hyatt – particularly in this region. They allow us to bring great local hotels with very regional experiences into Asia-Pacific at a time when travellers want tailored experiences that are not too scripted. An example is our Fuji Speedway Hotel, located on the grounds of the iconic Fuji Speedway race circuit in Japan.
Let’s talk a little more about Hyatt’s all-inclusive hotel development in this region. Club Med still dominates when travellers think about all-inclusive resort options. How will Hyatt change market sentiments?
Club Med is one of the frontrunners of the all-inclusive hotel concept and has done a nice job, but we are taking a different approach. We are focused on delivering a luxury experience with large rooms; we are focused on gastronomy through different types of restaurants and bars that will impress our guests throughout the long course of their stay; we are focused on programming from an activity and entertainment perspective, from day to night.
Hyatt’s all-inclusive approach also promises a larger destination experience.
Is this making cruise companies worried?
(Laughs) We get asked that a lot – what’s our biggest competitor. You could say it is cruising, but there are people who don’t want to be embedded on the ship even though cruises are a great way to see many destinations in a single trip.
With all that talk about travellers prioritising impactful experiences post-lockdown, what is Hyatt doing to cater to such desires?
It is intended that our hotels are programmed with some sort of local experiences. If you were to go the gallery hosts at this hotel (Andaz Singapore – a Concept by Hyatt), they would have a well thought-out schedule of daily or weekly events and activities available around the area and native to the destination.
When people recall their favourite travel experience, it is rare that they would say, wow that was a really, really nice guestroom. People remember what they did, whether they did it alone, with friends or family.
Sustainability will be the core focus of discussions among airline leaders gathering at the 67th Assembly of Presidents of the Association of Asia Pacific Airlines (AAPA) in Singapore this week.
“Achieving sustainability goals is critical to the future success of the international air transport sector and its continuing role as an agent for social and economic development,” said Subhas Menon, AAPA director general.
“Extreme weather events and record temperatures in 2023 nearing global warming thresholds set by the United Nations Intergovernmental Panel on Climate Change, are a clarion call for all industry players, especially governments and fuel suppliers, to step up efforts on sustainability, and to ensure that aviation is able to achieve its net zero carbon emissions goal by 2050,” he added.
In addition to aviation sustainability, the AAPA Assembly of Presidents will also celebrate the industry’s return to growth and profitability. AAPA member carriers continue to see strong recovery in air travel despite a dampened global economic climate resulting from unprecedented inflation, and aggressive monetary policies to reign it in. In September 2023, the number of international air passengers in Asia-Pacific reached 79 per cent of 2019 levels, behind other regions given that borders in Asia only fully re-opened six to twelve months after the rest of the world. Nevertheless, demand is robust, with international air passenger traffic measured in revenue passenger kilometres (RPK) growing by 171 per cent in the first nine months of 2023, compared to the same period in 2022.
Seat capacity measured in available seat kilometres increased by a comparatively slower 130 per cent in the first nine months of 2023, in part due to supply chain constraints affecting the timely delivery of new aircraft, and essential spares for maintenance. Load factors have already recovered to pre-pandemic levels and airfares remain high on the back of strong travel demand in the region.
“China, accounting for a fifth of the region’s international traffic before the pandemic, is still at only 54 per cent of 2019 levels in September 2023. Excluding China, recovery of the region stands at a markedly higher 87 per cent. Nevertheless, the return of Chinese travellers in full force will kick off another significant wave of growth for the region and global tourism,” observed Menon, adding that “the demand for air travel is resilient in spite of the challenges in the global economy, as there is a distinct shift in spending from goods to services, including on air travel.”