We like Hyatt's willingness to think outside the hotel box, and we're interested to hear how the company plans to move forward.
Hyatt Hotels Corp. wants to do a lot more business beyond the hotel.
At an investor day event in New York Tuesday, executives from the company said they are considering investments in existing companies and internal initiatives that would make Hyatt a bigger part of customers’ travel experiences.
As president and CEO Mark Hoplamazian put it: “We are focusing on extending the Hyatt brand beyond our core hotel business into new adjacent spaces that are relevant to our guests.”
Such a move wouldn’t be new for the company. In a nod to the growing popularity of the sharing economy, Hyatt previously invested in upscale vacation home-rental site Onefinestay. AccorHotels acquired the rental company earlier this year, and Hyatt sold its shares.
In a presentation, Hoplamazian gave examples of non-traditional “adjacent spaces,” including vacation homes, destination clubs, cruises, trains, adventure travel, off-site restaurants, and events. Without naming specific plans, he said the company could take three approaches: build some programs internally, partner with outside companies, and buy pre-existing businesses with known brands.
“What we do will vary across different elements,” he said.
Hoplamazian couched the company’s efforts as one of the ways it plans to win in the context of “disruptive forces” such as the rise of Airbnb and other sharing platforms and the growth of online travel agencies.
The CEO has discussed the idea of investing in hotel-adjacent experiences in the past — including in April during an interview with Skift — but spent a decent amount of time on the topic during his presentation and in a question-and-answer session with analysts Tuesday.
Chief financial officer Pat Grismer said Hyatt would consider selling existing assets to make the investment in other companies and brands.
But Hoplamazian said there was “no fixed recipe” for the scale of investments.
“My guess is that we will end up looking for things that we think are very leverageable but maybe have not necessarily been leveraged yet,” he said. “If we’re going to buy something or partner with someone to take on an opportunity that allows us to make it work for our purposes, what that will require is something that’s not fully baked or fully leveraged and built out.”
The key, Hoplamazian said, will be to make sure Hyatt has a “very clear path” for moving forward with any partnership or acquisition.
“We can’t just willy-nilly go and start to lay down bets on a whole number of ideas because they sound good and try to integrate them later,” he said. “We simply can’t afford to do that.”
Photo credit: The Royal Palms Resort and Spa, part of Hyatt's Unbound Collection, is shown in this promotional photo. Hyatt is making a bigger move into spaces adjacent to lodging, executives said. Royal Palm Resort and Spa