Hyatt Hotels Corp is close to finalizing an acquisition deal with Standard International, a boutique hotel operator.
The potential acquisition is part of Hyatt's strategy to expand its portfolio with luxury properties in popular tourist destinations, Bloomberg reported citing people familiar with the matter.
The report revealed that negotiations between Hyatt and Standard International, known for its hotels in London, Ibiza, the Maldives, and Melbourne, among other locations, are at an advanced stage.
However, the report cautioned that while discussions are ongoing, the deal has not yet been finalized and there is a possibility it may not materialize.
Source: RTT News
Comments:
It was just reported that Hyatt Hotels Corp. was in “advanced” talks to acquire boutique hotel company Standard International, which operates luxury properties across the world, Bloomberg reported Wednesday.
Here is my take on the potential acquisition:
Hyatt has two major challenges, both of which have increased their appetite for acquisitions:
- Global footprint - Hyatt is the smallest of the major hotel chains with a mere 1,350 properties. Compare this to Marriott with nearly 9,000 and Hilton with almost 8,000.
Hyatt needs to expand its footprint globally to be able to compete with the other major chains in many key destinations and to take advantage of the post-COVID trend for branditization of the global hospitality industry. This cannot be done organically since it will take much, much longer
- Loyalty Program: Hyatt needs to boost the membership of its loyalty program, which has a paltry 42 million members. Compare this to 205 million for Marriott Bonvoy or 185 million for Hilton Honors. By offering greater global footprint in desirable destinations, Hyatt can quickly ramp up its loyalty program membership. Why is this important?
A loyalty program is not just a “point-dispensing machine”, but a database of first-party membership data, which is priceless in this era of search engines and browsers (Google’s Chrome, Apple’s Safari and Firefox) discontinuing their support of third-party cookies and government privacy protection regulations.
Loyalty member preferences, lifetime value (LTV), past purchasing and browsing behavior are now being actively used by the OTAs to engage, convert and retain loyalty members and to improve brand marketing, CRM, personalization, customer service, upsells and in-destination experiences.
Max Starkov, Hospitality & Online Travel Tech Consultant & Strategist
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