Is consolidation a threat to innovation?

Rumours swirled last month of Hyatt’s intention to acquire Standard International, and last week said rumour was confirmed. In a deal valued at up to $335 million, Hyatt will acquire more than 30 projects, including the management, franchise and license contracts for 21 open hotels as well as Standard’s pipeline over the next 12 months. Hotel brands include The Standard, Bunkhouse Hotels, Peri Hotels, recently launched The StandardX, and upcoming The Manner. 

Over the last five years, most of the major hotel companies have made concerted efforts to expand in the independent lifestyle sector. First came a series of soft brand launches (Radisson Individuals, Registry Collection, Vignette Collection) as appetite for conversions increased in response to the pandemic, followed by more recent investment activity such as Hilton’s acquisition of Graduate Hotels and a controlling share in Sydell Group. 

The acquisition of Standard International builds on Hyatt’s own winning lifestyle streak – the company bought Mr & Mrs Smith last year as well as the me and all hotels brand from Lindner in June. When room count growth has become difficult to achieve due to the knock-on effect of economic uncertainty and inflation, consolidation presents a logical step forward to gain market share.

Should the hotel landscape become more concentrated, with fewer major players dominating lifestyle brands, will we continue to see the innovation and independent flair which put these brands on the map in the first place? On the flip side, consolidation may prompt the launch of new independent hotel concepts, ensuring the industry maintains its innovation and diversity. 

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