There are reasons for the hotel sector to feel positive. This may sound counterintuitive, but past experience teaches us that just as the hotel sector tends to be one of the early casualties of an economic downturn, it is invariably one of the first to bounce back. So while many businesses are still licking their wounds, I am feeling optimistic about the year ahead.
As always, we have prioritised the wellbeing of our colleagues, something which is now more important than ever, to enable every single Hyatt colleague to be at their best to support each other and those we work with.
Over the past year, myself and my colleagues have worked closely with owners and, despite all the challenges and false dawns along the way, the pandemic has brought us all closer together. We’ve spent a lot of time talking and – more importantly – listening. We’ve taken the time to understand the challenges and concerns that owners are facing. Being owners ourselves, we have sharpened our understanding of how to alleviate some of these pressures.
Operating a hotel isn’t easy and it is entirely understandable that some owners are struggling to see a way forward right now. No doubt some will want to look at other investment opportunities. But if a hotel is in the right location, with the right brand and positioned to cater to the right audience, owners should be confident that trade will come back. This is why our own strategy for growth is so important to us. We open hotels in markets where our guests want to be. We work collaboratively with owners and encourage them to have a long-term business strategy – because hotel investment is a long-term commitment and there will be bumps along the way.
There’s no question that as a business we have been tested. Who hasn’t over the past 12 months? Yet our relationships with our colleagues, guests and owners are stronger than ever. As we look to the future, our priority is to be responsive both to the wider global context and the evolving needs of guests. That means staying close to our owners, franchisees and other stakeholders as we move forward.
Confidence in the right deals
Taking a long-term view of growth puts hotel owners in a good place to deliver sustainable recovery following the pandemic. We have always expanded in locations we know our customers love, so are confident our hotels will perform well when travel can resume.
As part of our growth strategy, we expect to expand our portfolio in Europe by more than 30% in the next three years. This clear intention is based on the appetite we see for investment in the sector, and our confidence that we can craft the right deals with owners that share our own vision and values.
Hyatt’s investment in technology and distribution has accelerated over the past three years – and we can share the benefit of this with our owners and franchisees, providing some much-needed shelter from the storm. We are small enough to be “fleet of foot”, reorganising our sales and marketing teams ahead of our key competitors, while retaining colleagues who can thrive in a less-scripted environment which celebrates innovation.
This means being open-minded, upending convention and working quickly to test new ideas which fulfil unmet needs for owners. And we are already seeing success with this strategy. Forging ahead, we plan to ramp up innovation whilst keeping safety at the forefront of all that we do. We are focused on building trust, instilling confidence and driving business back to hotels as encouraging vaccine developments bring back a semblance of normal life.
Our independent collections are attracting particularly high levels of interest right now. Starved of variety during repeated lockdowns, many guests are drawn to the unique experiences offered by The Unbound Collection by Hyatt and JdV by Hyatt, both of which allow independent hotel owners to retain their name and unique identities while benefiting from being a part of the Hyatt family. That combination of distinct culture and personality, coupled with access to a loyalty programme and a number of new revenue generators, are mutually beneficial to both owner and brand.
Over the past year many independent hotels have, through necessity, become laser-focused on simply staying afloat. In the process, available capital becomes scarce. That is why we have restructured deals to be more flexible, helping owners who want the reassurance of joining an established brand while recognising there may not be funds available in the immediate future to refurbish or expand properties.
Each deal is bespoke and unique – there is no ‘one size fits all’ approach to hotel investment. Listening to what owners need right now – and adapting to meet those needs – sets the industry up for long-term success.
By Felicity Black Roberts, vice president of Acquisitions and Development for Europe Hyatt