Hyatt’s acquisition of Apple Leisure group catapulted it into the big time in the leisure resort space and the company now wants to push on, especially in Europe, but to do this it needs to do two things:
- Increase its customer base
- Increase the number of rooms and hotels
Both of those are difficult, but Hyatt is working to try and scale each of these.
After historically ceding too much power to the online travel agencies (OTAs), hotel companies have tried to reclaim guest bookings in recent years. And the biggest advantage they have is their own loyalty schemes, which have been expanded and revamped to make them more attractive.
In October, Hyatt signed a "collaboration agreement" with Germany’s Lindner Hotels that will see more than 30 hotels across seven European countries join its portfolio – most under the JdV by Hyatt brand.
Not only does this expand its presence in the German market it also gives it a pool of consumers it can potentially funnel elsewhere in Europe.
“It's a very important network move because Germany is the number one feeder market for the Balearic Islands and the number two feeder market for the Canary Islands, where we have significant all-inclusive resort presence,” Hyatt CEO Mark Hoplamazian, said on the firm's third quarter earnings call.
“So there's an intentionality to what we're trying to do. It's not just a representation play for Germany and for Europe. It's also to extend and bring millions of additional customers into the World of Hyatt and expose them to now our much bigger resort portfolio in Europe.”
These small deals — either through collaboration in Hyatt’s case or in brand acquisition as was the case with Wyndham and Vienna House — are becoming increasingly popular as the big brands opt for incremental growth. That does mean though that a lot of the brands are chasing the same deals.
Hoplamazian said, however, that Hyatt was well placed thanks to the existing relationship it and Apple Leisure Group has throughout Europe, especially with those family-owned portfolios.
“[We] feel very, very well positioned to both understand exactly what's going on in the marketplace, and– we are the largest player, the largest managed brand portfolio of luxury and all-inclusive resorts in the world. So we have a unique position from which to seek these kinds of transactions out,” he said.