Hyatt CCO Says Lifestyle Brands, Well-Being Focus And Loyalty Program Fueling 2023 Growth

Hyatt Hotels Corporation is on the fast track to growing its brand, its property portfolio and its loyalty partnerships. While not the biggest hospitality company, it is laser-focused on being the best by expanding its geography and listening to customers. Even during the tough pandemic era, Hyatt found opportunity to grow in key markets and evolve with the ever-changing travel landscape. All of this helped position Hyatt for the post-Covid travel boom, benefiting both consumers and investors.

Chief Commercial Officer Mark Vondrasek explains how Hyatt’s latest brand acquisitions (especially in the lifestyle space) and its generous loyalty program position the company for future success.

What role have brand acquisitions played in recent years?

It’s been a whirlwind last five years with acquisitions and growth. Most of it started during the Covid period. Many companies were focused on staying solvent through difficult times, but we managed to be victorious in adding brands that fit with our portfolio.

The genesis for all of this came from really listening to our customers. Hyatt doesn’t have scale as an advantage, but our advantage can be offering a range of properties in the destinations that are on the mind of our loyalty program members. They were telling us that they really liked all-inclusive properties, and even those unfamiliar with it said that if we offered them, they would be interested in trying them.

A good example of this was adding Apple Leisure Group, which has a large network of all-inclusive destinations. We went from having a small presence in that market to having the largest luxury, all-inclusive portfolio. Our traditional hotel and hospitality competitors are nowhere near us in that space.

We spent a lot of time from a data and analytics standpoint asking questions like “when you travel and don’t stay with us and why is that?”

This type of insight leads our development team from an acquisition standpoint. In the last five years we doubled the number of luxury hotels we have, tripled the number of resorts and quadrupled the number of lifestyle properties. Given our size, there was a lot of opportunity, and now World of Hyatt members can find us in more places.

What other brands have joined Hyatt?

Dream Hotel Group and Mr & Mrs Smith are two of the high-end, lifestyle brands that are now part of our network of properties. Our customer base aligned well with theirs, and both were a great fit for Hyatt help fill the top end of our portfolio while also introducing new destinations.

The German Lindner Hotels brand is another addition, which has added dozens of properties to Hyatt in Germany, Belgium, Austria and Slovakia among others, countries where Hyatt was previously not very strong. World of Hyatt customers gain access to more properties (now operating as part of the JdV by Hyatt brand), and those owners appreciate the distribution that comes from Hyatt’s global base.

After all, a World of Hyatt guest spends more on property than a non-member, and they typically book directly, which cuts down on the hotel’s own distribution costs. There is great value to being part of a larger system.

Mr & Mrs Smith has around 1,400 hotels, 80% of which are in markets where we didn’t previously have distribution. Instantly, Hyatt was able to add properties in places like Croatia and Fiji, which gives World of Hyatt members even more choice and reason to stay loyal.

What is Hyatt’s strategy in the extended stay market?

There is booming demand for upper mid-scale extended stay products, which is why we introduced the Hyatt Studios brand. It is a product that will sit below Hyatt House and offer an easy-to-build and operate model for owners. Where the puck is going from a development standpoint, you’re going to be seeing a lot more construction in this segment. The pandemic brought this to the forefront of the market, and it is one that is here to stay. It felt like the right time for us to invest in that segment.

Hyatt Studios will be in places where we don’t already have a presence opening new markets for Hyatt. We don’t want to bump up on ourselves, of course. We already have 100 in the pipeline with more to come.

How does Hyatt see itself in the larger hospitality marketplace?

Hyatt has made a name for itself in the mindfulness and wellness space, and this is incredibly important. Since the pandemic, people have discovered that experiences are more important than ever. People had their freedom taken away, and now people want to be a little more mindful and present, especially when they travel. We are noticing that guests are staying longer on property, and the “bleisure” trend is real with people blurring business and personal trips into one.

Our corporate customers are asking more about well-being practices, too. When we added Miraval, which has three wellness resorts, we learned a lot from how they approach mindfulness and wellbeing. Meetings and events are moving away from the stuffy corporate approach, and some of our top customers are looking to roll Miraval-like experiences, like stretching and mindful practices, into their meeting. This is something that we have learned from our top corporate customers; it’s something they want.

The FIND Experiences offering is another way that Hyatt succeeds in the experiential travel space. We have someone that curates those experiences for the platform, which customers can earn or redeem World of Hyatt points for when booking them. The program also relied heavily on what hotels were already doing in terms of local signature experiences.

Hotel managers, concierges and team members were already doing incredibly creative things in their local areas, and FIND Experiences essentially catalogs them into one larger platform. We also host forums with our properties to share larger trends that may help them curate new experiences that members will enjoy. Everything on the FIND platform has some sort of well-being filter tied to it. It’s not just about tickets to a sport event or concert; it’s about achieving life balance on a larger scale.

With the end of the MGM partnership, are there other plans in the casino and gaming space?

Las Vegas is a hugely important market for us. We are lucky that we have quite a few properties coming to life there including the Rio, which will become a multi-branded Hyatt operation as well as a new Dream property that is under construction.

How do you develop partnerships for World of Hyatt?

Given our size, we rely heavily on our loyalty program to drive incremental business and provide meaningful value to members. One way we do this is through partnerships like what we have with Lindblad Expeditions and American Airlines, both of which reward members with bonus points when they do business with those brands. It’s about creating a synergy that benefits the consumer and encourages new business with either brand.

What we have with American Airlines, for example, is unique in that it offers elite status and bonus miles and points. It’s more rewarding than what other hotel and airline partnerships offer. When people travel, they don’t think about the experience in individual moments, like the drive to the airport, the airport experience, the flight and the hotel. They think of the trip in its entirety, and this thought process gives us a leg up when it comes to providing partnerships that offer value throughout the travel process.

What are your favorite benefits of World of Hyatt?

One of my favorite perks is the Guest of Honor benefit, which allows a top elite status traveler to share their status perks with someone else (even if they are not traveling together). It’s something we consistently receive positive feedback on from our members. If someone is important to you, then they should also be important to us, too. It is the ultimate show of hospitality and loyalty. Guest of Honor helps us to connect a bit differently with our members, which helps them feel recognized even when they are not the one traveling. There are ways to think about this in other industries.

Brand Explorer is another creative way that we incentivize members to try more of our brands. For every five brands you stay at as a World of Hyatt member, you receive a free night to redeem elsewhere. You would be surprised how our members may not be able to keep up with all of the new brands we are adding to our portfolio, and this is a rewarding way to educate people about the geographic breadth of World of Hyatt has a program.

Milestone Rewards is another recognition tool that members really like. People enjoy having something out in front of them, something that they can work towards to be rewarded. Not everyone is a road warrior that can achieve top elite status. Tiered Milestone Rewards gives them benefits for completing smaller achievements like ten nights, for example.

Where are Hyatt’s biggest growth opportunities?

The Europe, Middle East and Africa (EMEA) region has the most potential for us. It is growing faster than any other region right now. Hyatt is looking to build scale there so it’s not just about adding new countries, but also adding more distribution in those same countries. Another area of focus is India where there is so much opportunity. We have a lot of optimism for growth in both of those regions.

Hyatt’s Inclusive Collection is growing in Europe with around 40% of the portfolio already on the continent in places like Spain, Greece, Bulgaria, and next year, Portugal. The collection grew from 11 hotels to 50 over the past three years, and there is tremendous potential to keep growing there as well as in parts of the Middle East, Africa and Asia-Pacific. There is still room in the Caribbean, too, but it’s a more mature market, which is why this is the right time in those places to grow.