Hyatt is joining Marriott and Extended Stay America in adding brands in the premium extended-stay category. But leaping into this category requires finesse.
Hyatt Hotels unveiled on Tuesday a new brand, Hyatt Studios, as its entry into upper-midscale extended stay lodging in North America. It expects the first openings in 2024.
“The Hyatt Studios announcement is supported by signed letters of interest from multiple developers for more than 100 Hyatt Studios hotels,” said Jim Chu, chief growth officer. “This interest is a testament to the close collaboration with the developer community to create an upper-midscale brand that can reach new markets for Hyatt. In turn, this can serve as an ideal entry point for new guests into [our loyalty program] World of Hyatt while giving our existing loyalty members access to new markets and new stay occasions.”
Extended Stay Boom
Hyatt’s entry into extended stay follows a flurry of activity in the segment as industry executives believe blended travel is here to stay for years to come.
Hyatt last tried extended stay with an affiliate Hawthorne Suites, which is a brand it passed on to Wyndham but hasn’t set the world on fire since.
In November, Marriott International said it would debut an extended stay brand in the U.S. and Canada called Apartments by Marriott Bonvoy that it would position in the premium and luxury segments. In the same segment, Extended Stay America recently launched its Premier Suites brand.
In the broader extended stay category, Wyndham launched ECHO Suites by Wyndham and BWH launched @Home by Best Western as a new brand in recent months.
Why now? Demand for extended stay is outpacing supply in most U.S. markets. That’s the most critical factor, said Mark Skinner of The Highland Group, which has the most authoritative data on extended stay development.
Roughly a third of the construction pipeline for hotels in the U.S. is extended-stay projects, or roughly 30 percent of planned rooms, according to Lodging Econometrics. About a third of these are in the premium tier that Hyatt Studios aims to play in.
Hyatt’s brand launch comes at a time when a few hotel groups have been launching new brands again. Hilton Worldwide earlier this year launched its first hotel brand in the economy segment, Spark by Hilton. Wyndham Worldwide, Kerzner, and Best Western have created or bought hotel brands in the past several months, too. For context, read: Why Hotel Companies Keep Adding Hotel Brands.
The new brand will join Hyatt’s “timeless collection.” Dan Hansen, who had been CEO and Executive Chairman of Summit Hotel Properties from its initial public offering until his retirement in 2021, has served as strategic advisor throughout the brand’s conception.
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Photo credit: Hyatt Studios guestrooms will marry form with function and offer suites with kitchen amenities to provide comfort during extended trips away from home. The king guestroom plan provides 339 square-feet of comfort, and all guestroom kitchens will feature a multi-function convection microwave. Source: Hyatt. Hyatt