Hyatt Eliminates CMO Position in Strategy Aimed at Accelerating Its Growth

Hilton isn’t the only major hotel company beginning this year with a major marketing leadership change this year.

On Thursday, Hyatt announced it was eliminating the positions of global chief marketing officer and global head of capital strategy, franchising, and select service on its executive committee. In their place, the company is creating a new chief commercial officer position, and consolidating its managed and franchised hotel operations and owner relations into a single portfolio to be led by its current global president of operations, Chuck Floyd.

That means that global chief marketing officer Maryam Banikarim and global head of capital strategy, franchising and select service Steve Haggerty will leave Hyatt in the coming months. Banikarim’s last day with Hyatt will be on April 30 and Haggerty will remain at Hyatt as a special advisor to the CEO through July, focusing on important deals.

“In order to achieve our growth potential and capitalize on opportunities that come from rapidly-emerging consumer, industry and competitive developments, we must be leaner and more agile,” Hyatt CEO Mark Hoplamazian said in a statement. “This starts at the top with our leadership, and we are making changes to streamline the Executive Committee and to better enable us to maximize our core hotel business and continue our expansion into new lines of business.”

The new chief commercial officer role will include oversight of global sales, marketing, contact centers, and information technology, and will report directly to Hoplamazian. Hyatt says it hopes to appoint a new chief commercial officer in the second quarter.

Additionally, the company is reorganizing its legal and corporate services portfolio under a new leader. Margaret Egan, who has been with Hyatt for 14 years and most recently served as the company’s interim general counsel since last October is being promoted to general counsel.

“The changes we’re making will better position us to grow with focus to serve our high-end customers and guests in the places and with the experiences that matter most to them,” said Hoplamazian.

What’s Driving This Reorganization

This is the third time that Hyatt has executed a reorganization of its executive team in the last five years, said Michael J. Bellisario, a senior research analyst with R.W. Baird. He believes this latest move aligns with the company’s strategy to focus more on high-end travel and complementary businesses.

“The first time was in 2012 and then again in 2014,” Bellisario said. “Hyatt continues to streamline its hotel business from an operational standpoint as it moves into additional adjacent spaces and focuses more on the high-end traveler.”

Those adjacent spaces include acquiring wellness brands Miraval and Exhale in 2017, as well as making a sizable investment in alternative accommodations provider Oasis last year.

Bellisario added that he believes the new chief commercial officer position will assume many of the duties formerly carried out by its CMO. He also noted that the company’s recent hiring of former Starwood veteran Mark Vondrasek to lead Hyatt’s loyalty program will take care of the company’s focus on growing its brands and loyalty base.

Hyatt is also in the midst of transitioning from being an “asset recycler” to a more asset-light company. Traditionally, the company would sell its properties to reinvest money into buying other hotels in other markets, but last fall, Hyatt announced plans to sell $1.5 billion worth of real estate as it “shifts to a more fee-driven business model.”

“We deeply appreciate the outstanding contributions Maryam and Steve have made to Hyatt and their leadership through this important transition,” Hoplamazian said in a statement. “Maryam transformed the marketing function and leaves us with a legacy of expressing our purpose through our brand position as a company and throughout our communications. Steve has provided tremendous value to Hyatt for nearly 11 years. He led the way in some of the most important steps we’ve taken to build our brand portfolio.”

Banikarim’s Legacy

Banikarim joined Hyatt in January 2015 and has played an influential role in the launch of a number new brands, campaigns, and initiatives for the company. Under her leadership, the company debuted a new loyalty program, World of Hyatt; a new soft brand collection, The Unbound Collection by Hyatt; and a new upper upscale brand, Hyatt Centric.

Banikarim was also behind many of the company’s most successful and memorable marketing campaigns, including “It’s Good Not to Be Home” for Hyatt Regency, and “For a World of Understanding,” promoting Hyatt’s new loyalty program.

The Hyatt Regency campaign was heralded for its innovation in partnerships: Hyatt partnered with Fast Company and Comedy Central to develop video content that aligned with those brand’s respective audiences and the Hyatt Regency guest, and used social media, especially Snapchat, to power the campaign effectively. At the time, it was the company’s largest-ever marketing campaign.

In March 2016, Banikarim told Skift: “We’re really proud of the ‘It’s Good Not to Be Home’ campaign that we launched for Hyatt Regency, which hadn’t had its own campaign in the market for several years. What was interesting about that campaign in general was that it was based on consumer insight. People told us in our research that sometimes they feel guilty about traveling, because they have to leave their families behind or their job behind or whatever the case may be. But one of the benefits is that sometimes it is good to not be home.”

The company’s most recent campaign, “For a World of Understanding,” which debuted in February 2017, resonated deeply with global audiences for the timeliness of its message; it came out not long after the U.S. issued a travel ban on several Muslim countries.

The strength of Hyatt’s marketing campaigns and its push for loyalty was something the company touted during its recent face-off with Expedia last summer, when the company threatened to leave the online travel giant and told its hotel owners that, should Hyatt leave Expedia, it would engage in an “aggressive sales and marketing plan” to drive more direct bookings, as well as promote its newly relaunched loyalty program, World of Hyatt. That departure, however, never occurred.

Whomever assumes Hyatt’s marketing efforts following Banikarim’s departure will have some large shoes to fill. Banikarim posted this message on her LinkedIn profile, today, saying: “Some personal news: after three great years I’ll be leaving Hyatt come April 30th to pursue a new challenge. Couldn’t be more proud of the work we did here and the team we’ve built.”

Haggerty’s Legacy

Haggerty played an influential role in Hyatt over his 11-year-career with the company. Most recently, he worked on the company’s acquisitions of Exhale and Miraval, as well as its investment in Oasis.

The company has also seen tremendous strength in the growth of its select-service brands both in the U.S. and on a global scale, and its growth exceeds the growth of the company’s other brands.

In the company’s third quarter earnings call, Hoplamazian said, “Strong consumer preference for our Hyatt Place and Hyatt House brands have now resulted in 23 consecutive months of share increases at our select service hotels as measured by Smith Travel Research [STR]. We opened another four select service hotels in the Americas in the third quarter with our rooms base growing by more than 10 percent over the past year, and remain on pace to have a record year of select service hotel openings and development in 2017.”

Despite that growth and demand for its select-service brands, Hyatt seems set on pursuing a strategy that appeals to high-spending travelers and brands that offer more services, including services not traditionally included in lodging companies, such as wellness and home sharing.

Given the company’s newer focus on being more asset light and retooling its loyalty program to appeal more to high-end travelers, however, it seemed that Haggerty’s position — which focused on real estate and on select-service development — would not be as crucial as it once was.

No doubt the industry will be paying close attention to Hyatt’s pick for a new chief commercial officer, as well as awaiting its next moves.