Skift Take
Hyatt is shifting its growth strategy towards establishing more roadside hotels instead of focusing solely on luxury complexes in urban centers. The initiative emphasizes practical accommodations for travelers while maintaining a straightforward approach.
When people think of Hyatt, luxury offerings like the Park Hyatt Tokyo or corporate business hotels typically come to mind. However, the company is now prioritizing suburban hotels that lack extravagant features. These properties are faster to construct, cheaper for owners to maintain, and allow Hyatt to expand into areas where it currently has no presence.
In recent years, Hyatt has seen a 25% increase in its select-service pipeline across the Americas, with these types of hotels now constituting over half of the group’s development plans in the region. The introduction of Hyatt Studios—launched a year and a half ago—marks the brand’s entry into the midscale segment, aiming for a more streamlined hotel experience.
This growth strategy also involves extending its footprint beyond metropolitan areas into smaller towns. Hyatt Studios is actively planning sites in places like Harrisonburg, Pennsylvania; Madison, Alabama; and La Verkin, Utah.
Caption by Hyatt
Caption by Hyatt is an upscale select-service brand that has recently been refreshed with increased market flexibility and a more efficient food and beverage model. The revisions allow Hyatt to expand into a wider range of markets without compromising operational efficiency.
The brand’s approach simplifies food offerings, providing developers with insight that guests may prefer more straightforward options, like a continental breakfast, over elaborate dining experiences.
Hyatt Studios
Hyatt Studios is designed for extended stays, currently with about 4,000 rooms in development and approximately 250 deals in various negotiation stages. Unlike Hilton’s Spark by Hilton brand—launched at the same time and already with numerous active locations—Hyatt Studios is still in the early stages of its rollout, with the first property set to open in Mobile, Alabama.
This strategic focus on midscale and select-service hotels addresses Hyatt’s crucial need to increase its presence in underserved markets. Greater flexibility in design and amenities is now a hallmark of Hyatt’s approach. Owners are empowered to customize their properties based on local market demands, moving away from a rigid model that dictates uniformity across hotels.
For example, in Hyatt Studios, owners can opt to include amenities such as pools or meeting spaces, allowing them to tailor offerings to specific community needs.
Loyalty Program Component
While it may seem contradictory for Hyatt to expand into select-service offerings when many other hotel groups are focusing on moving upmarket, the strategy stems from a desire to strengthen its loyalty program. The growth of its select-service portfolio aligns with the feedback from World of Hyatt members, who expressed a need for more locations that cater to their travel patterns.
Expanding this segment not only enhances guest options but also attracts more hotel owners looking to partner with Hyatt for future developments. This approach helps ensure that Hyatt can compete effectively in the hospitality sector, thereby increasing its market share and brand recognition across varying segments.
