Hyatt is making new partnerships and growing its loyalty program

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Travelers flocking to the World of Hyatt loyalty program increasingly have new ways to earn and use points — and the Chicago-based hotel giant isn’t done adding more variety to its offering.

On Tuesday morning, Hyatt posted a hefty $359 million profit for the second quarter. The company is riding high on increases in business and group travel demand, while leisure travel, which was an industry leader through the coronavirus pandemic, is slated to stabilize through the end of this year. But company leaders point to a mix of new partnerships and brand offerings, from more than 700 hotels off the Mr & Mrs Smith platform to a new alliance with luxury outdoor resort brand Under Canvas, as fueling the company to a new era.

The numbers underscore that point: World of Hyatt membership is up 21% from a year ago. Further, Hyatt CEO Mark Hoplamazian pointed to growth in the loyalty program’s reach as fueling overall growth. The company’s 130,000-room development pipeline is at a record high.

“Our focus on expanding our network effect as we grow allows us to offer more options to our members, increasing their loyalty to Hyatt and making Hyatt more attractive to prospective developers,” Hoplamazian said on an earnings call Tuesday.

Mr & Mrs Smith is off to a roaring start

One of the biggest rollouts to the Hyatt platform this year was the Mr & Mrs Smith booking platform of boutique and luxury hotels, which Hyatt acquired last year. While not every Mr & Mrs Smith hotel is expected to opt into World of Hyatt, an initial batch of more than 700 properties rolled into the loyalty network earlier this year — Hoplamazian gave a little more color as to what that looks like from a loyalty perspective.

More than 80% of those initial World of Hyatt-participating Mr & Mrs Smith hotels have received bookings from loyalty members. Of those, 20% of overall bookings came from Globalists, the highest tier in the World of Hyatt loyalty network, and two-thirds of those overall World of Hyatt bookings were for cash rates rather than award redemptions.

Of course, these early booking stats may support the critique that the award redemptions at Mr & Mrs Smith hotels are nowhere as strong as some of Hyatt’s legacy properties, which participate in the company’s award chart. Mr & Mrs Smith hotels partake in dynamic pricing, however, every type of room at a Mr & Mrs Smith hotel will be available for award redemption rather than designated room and suite types found at hotels participating in the award chart.

By the end of this year, Hyatt leaders expect more than 1,000 hotels on Mr & Mrs Smith will be in World of Hyatt — that’s significantly higher than the roughly 350 Small Luxury Hotels of the World that partook in the loyalty program before SLH and Hyatt severed ties.

Leaning into every lifestyle

Along with the Mr & Mrs Smith integration, Hyatt has made strides in various lifestyle travel offerings recently. The company launched an alliance with Under Canvas, a high-end outdoor resort brand known for its luxurious safari-inspired canvas tents lodging. World of Hyatt members can book stays at Under Canvas camps and the new Ulum Moab resort via Hyatt to earn and redeem points.

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In Europe, Hyatt plans to leverage its newly acquired Me and All Hotels brand to expand its presence in the lifestyle hotel sector. The brand, acquired from Hyatt’s Lindner Hotels partner in Germany, works well for conversions of existing properties. Don’t rule out global expansion for this Europe-centric brand under Hyatt’s watch.

“It is important to note that our strategic positioning and brand mapping are designed to aggressively expand and capture market share across Europe,” Hoplamazian said. “While we expect the brand’s chain scale in Europe, initially, we believe there are opportunities to grow the brand globally, providing more destinations for our members and guests to enjoy a curated lifestyle experience.”

Hinting at Standard Hotels entering the fold?

Those looking for confirmation that Hyatt is looking to pursue some kind of deal with Standard International, the parent company of trendy lifestyle hotel brand Standard Hotels, were left high and dry Tuesday … kind of. Hoplamazian did appear to indicate a flurry of growth opportunities was on the horizon — but don’t bank on these looking like traditional takeovers.

“We have been and will continue to be very intentional with our organic and inorganic growth, ensuring that our brand and property portfolio expansion creates opportunities for new guests to find us and join World of Hyatt,” Hoplamazian said.

That’s a whole lot of nothing in terms of specifics, but the Hyatt CEO gave a little more context on how the company is shaking up globally across various partnerships. This could look like how Hyatt operates in Germany with Lindner Hotels, where there isn’t so much an actual takeover as there is a shift of hotels to existing Hyatt brands like the JdV by Hyatt collection brand.

“Since the first quarter of this year, I’ve been talking about the fact that we see a robust opportunity — and real opportunities, not just theoretical — to do portfolio deals, and sometimes that means doing a strategic partnership, like the Lindner Hotels deal where we sign franchise agreements for all of those hotels,” Hoplamazian said. “Sometimes they come in the form of an acquisition of a brand or a management platform.”

But there is always one underlying principle guiding Hyatt down this path.

“We are also very focused on making sure that we understand the customer base like we always do,” Hoplamazian said. “That’s what we start with and that each of these acquisitions or partnerships that we do have embedded growth already identified.”

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