Hyatt
Hyatt Among Top Companies Looking to Cash in on Massive Global Growth in Hospitality
Asia is among the hottest markets for hotel growth and expansion. India looks to continue the double-digit growth it has enjoyed over nearly the last decade, and in the face of its newfound affluence and in advance of the 2008 Olympic Games, China is attracting attention from nearly major hotel company in the world.
Take Hyatt for example, which just added a third luxury hotel, Hyatt on the Bund in Shanghai, that features two looming towers with a total of 631 rooms, each offering sweeping vistas of the Huangpu river. Added to Hyatt’s two other luxury hotels, which include one in downtown Nanjing Road Pedestrian Mall, and one in the suburban Sonjiang District, Hyatt on the Bund brings Hyatt’s five-star room count to 1700 rooms, or 10% of the city’s total capacity.
On top of that, Hyatt Hotels & Resorts, which manages all three hotels. Plans to add 12 new hotels in China within the next three years, and four more in the Asia Pacific region in the same timeframe.
Global Hyatt is one of the best known of the global hotel companies, with over 735 hotels totaling 136,000 rooms in nearly fifty countries. Furthermore, even though the Hyatt empire has been carved up among its heirs in the aftermath of a lawsuit by two junior member of the family, until 2011 when it will either go public or sell out. It remains the world’s largest private hotel company.
Through its affiliates, Hyatt owns, operates, manages and franchises hotels and resorts under the Hyatt, Hyatt Place, Hyatt Regency, Hyatt Resorts, Grand Hyatt, Park Hyatt, and Hyatt Summerfield Suites brands.
In the spring of 2007, Hyatt debuted Andaz, its newest international brand. ‘Andaz’ is an Urdu term meaning ‘personal style,’ and the Andaz hotels mark Hyatt’s effort to blend upscale luxury with the stylish regional chic of a boutique hotel experience.
In place of front desks and dedicated check-in areas, Andaz will offer warm, welcoming living areas and hosts armed with portable computers so guests can check in on-the fly check-in, or as they sip a glass of wine in the living space. A flat management structure will mean all personnel managers to receptionists to doormen cross-trained in and able to deliver all aspects of guest service.
Andaz will feature restaurants with open kitchens to encourage interaction between guests and Hyatt’s superb chefs. All Andaz hotels tap local and international architects to create innovative and timeless designs that wrap the Andaz vision in the local and neighborhood cultures and styles that surround the hotels.
Hyatt is striving to build Andaz and run it in a way that is in harmony with the environment, including building with ecologically sound, low-impact materials, deploying energy efficient systems and biodegradable products wherever possible, and serving locally sourced and organic products at its food and beverage outlets.
Recently, Hyatt launched the first of its Andaz hotels with the opening of the Andaz Liverpool Street in London. Andaz offers 5-star luxury and quality with the chic, hip, personalized feel of a smaller boutique hotel.
As one of the firms looking to ride the wave of global hotel expansion and growth, Hyatt has not neglected the American market, which, between 2005 and 2007, saw the largest surge in domestic hotel expansion in the nearly twenty years, with the launch of nearly 34 brands, nearly twenty of which were luxury brands from such well-know companies as Marriott, with its Ritz Carlton Reserve, Starwood, with its Baccarat & LeCrillon, Hilton, with its Waldorf Astoria Collection, followed by a number lesser-known independents.
Another development in the Hyatt chain of hotels is the Hyatt Place, which is dedicated to serving a new breed of travelers who seek facilities that honor and promote a seamless integration of personal and business activities in what Hyatt terms a 24/7 lifestyle. To bring this idea to fruition, Hyatt as designed a relaxed, casual atmosphere equipped with the latest in technology and amenities, including free wi-fi, oversized desks with ergonomic chairs, plush 8-foot long sofa sleepers and 42-inch flat screen HDTVs with a wide array of channel selections.
Hyatt plans to open 120 Hyatt Place hotels across America by spring of 2008. To help provide liquidity for their planned expansion, Hyatt recently secured a $1 Billion shareholder investment from Madron Capital Partners, a private capital firm connected to the Rob Walton family.
Also, companies associated with Goldman Sachs Capital partners have agreed to invest another $1 billion to purchase equity securities in Global Hyatt. The original plan had been to pass control of both Marmon and Hyatt to Tom Pritzker, son of Jay, who with his brother Robert and their father A.N. Pritzker created both Marmon and Hyatt.
A suit brought in both Chicago and the Bahamas by Tom’s niece and nephew Liesel and Matthew (Robert’s two youngest children) resulted in a settlement that split the family empire into 11 pieces and called for the parent companies of Marmon and Hyatt to be sold off or to make initial public offerings by 2011.
Hilton Eyes Global Growth
U.S. private equity giant Blackstone Group recently formalized its nearly $30 billion dollar purchase of Hilton Hotel, the largest hotel group in the world. In buying Hilton, Blackstone added s very large cherry to its already impressive sundae of hotels. Hilton brings nearly a half a million rooms spread over nearly 3000 properties in 76 countries and territories.
So it perfectly understandable that we expect Hilton so be on the in the pack of hotels looking to expand their offerings to meet the worldwide demand for hotels. Hilton Hotels has announced plans to open the first twenty new Hampton hotels in the U.K. by the end of 2008.
The inaugural property in the chain will be opened by franchisee Hotel Solutions London and will offer 86 rooms on Corby’s new Rockingham Leisure Park. All 20 of the planned hotels will offer free high-speed internet, hot breakfast and a full money-back guarantee.
Hilton plans to increase is U.K. hotel presence from 75 to 150 hotels over the next ten years.
Homewood Suites by Hilton plans to add 125 new hotels over the next several years. Homewood owns or manages 210 hotels under brands such as Conrad Hotels & Resorts, Doubletree, Embassy Suites Hampton Inn, Hilton, Hilton Garden Inn, Hilton Grand Vacations, Homewood Suits by Hilton and the Waldorf Astoria collection. Homewood was launched by Hilton in 1989.
Conrad Baron Hilton, son of the late founder Conrad Hilton oversaw the firm’s $26 billion sale to Blackstone in July 2007. Baron Hilton, as he is known, stands to make between $750 million and $900 million on the sale. Baron had been with the firm since just after a stint in the Navy as a photographer in World War II, when he started as an elevator operator and rose to become CEO by 1979.
When his father died in that same year and left the bulk of his estate to charity, Baron Hilton began a ten-year legal battle to gain his inheritance. In 1989, he won and was awarded his share of the Hilton fortune.
In addition to his stake in Hilton Hotels, Baron Hilton maintains a stake in Harrah’s Entertainment, and stands to realize $300 million once Harrah’s finalizes its sale to a partnership of private equity firms Apollo Management and TPG.
A recent survey of hotel guests in the Middle East showed Hilton to be the Middle East’s number one hotel brand.
This, coupled with rapid growth in the Middle East hospitality industry, might help to explain Hilton’s rapid expansion into places like the UAE, where Hilton plans to double the number of its properties over the next five years by adding another 2100 rooms of capacity to its existing 43 hotels. Hilton has another 15 new properties set to open in the next three years in such places as Egypt, Jordan, Lebanon, Morocco, & Algeria, among others.
Moreover, Hilton’s global expansion continues with Homewood Suites expansion into Mexico with its important new hotel in the industrial powerhouse of Torreon, and its fourth new Hotel in Costa Rican capital of San Juan.
Blackstone’s July acquisition puts them in a perfect position to take advantage of the global boom in hotel demand and construction. With the acquisition, Blackstone added Hilton’s 500,000 rooms to its existing portfolio of recent acquisitions like Wyndham International, MeriStar Hospitality, & LaQuinta in addition to a handful of extended stay brands.
Marriott Looks to Cultivate European/Asian Styles
Like many major players in the international hotel market, Marriott has its eyes on the European and Asian Markets.
Marriott recently announced a multiple franchise agreement with the Scandinavian Hospitality Group that will greatly expand its presence in Scandinavia. As a result of the agreement, Marriott expects to open 15 hotels in the next 5 to 6 years under the Marriott Renaissance, Courtyard by Marriott, and Marriott Executive Apartments, for those looking for a more extended stay.
The first two hotels to open their doors under the deal will be the 272-room Courtyard by Marriott in Stockholm, and the 155-room Courtyard by Marriott in Kristiansund, Norway, both set to open in 2009.
In addition to its Scandinavian expansion, Marriott plans to make further inroads into the U.K. with the 2009 opening of the European-designed Marriott Courtyard in Aberdeen, Scotland, near the Aberdeen Airport.
Marriott in India
The Indian hospitality industry has entered a phase of astounding growth and demand for hotels has never been higher.
To take advantage of this hotel boom, Marriott has drawn up plans to quadruple its current portfolio of six hotels to 25 by adding 19 new properties over the next 2 years.
Marriott will add three luxury properties under the J.W. Marriott brand, one Ritz Carlton, two upscale Renaissance hotels, one first-class Marriott, eight mid-range Courtyard by Marriott hotels, and a single Marriott Executive Apartment complex for longer-term travelers.
Marriott recently announced plans to increase its already rapid expansion in India by bringing its four-star Courtyard by Marriott hotels to so-called second-tier Indian cities like Noida, Ahmedabad, Gurgaon, & Hyderbad. The company plans to open a total of 14 Courtyards by Marriott over the next 3-4 years.
If these plans all pan out, Marriott will increase its hotel properties in India by 500% in less than 5 years.
Starwood Hotels and Resorts Ups Latin American Ante with Three New Hotels in Peru
Starwood Hotels & Resorts Worldwide, Inc. is looking to expand its South American presence with the opening of three new properties in Peru.
Starwood has negotiated a franchise deal with Inmobiliaria Inversiones Nacionales de Turismo S.A., that will permit Starwood to open its first Westin hotel in South America in Lima, Peru, as well as a Luxury Collection hotel in the ancient Incan capital of Cusco, and another in the sacred valley of Urubamba, close to the Inca trail to Machu Picchu.
Peru is one of the world’s most exotic tourist destinations and an perfect place for Starwood’s well-known and respected Westin and Luxury Collection hotels.
Lima’s Westin Libertador will be the first Westin Hotel in South America. The Libertador will offer a first-class destination for travelers to rejuvenate while staying in this eclectic capital.
Meanwhile, the two new spectacular Luxury Collection hotels in Cusco and Urubamba will wrap travelers in a magical environment rich with indigenous design touches, and offer extraordinary service, all just a short distance to Machu Picchu, one of the wonders of the world.
Each of the exquisite properties will smoothly blend local cultural heritage, customs, and natural aspects to create a holistic guest experience, while providing each guest with an exceptional level of service. Palacio del Inca Libertador Luxury Collection Hotel will open in Cusco in 2009. Cusco is Peru’s main tourist destination, attracting visitors from around the world who are eager to explore its world-famous Inca ruins and embark on adventure tours in the most sacred body of water in the Inca Empire, Lake Titicaca.
Palacio del Inca Libertador Luxury Collection Hotel will feature 192 rooms, including 14 suites, as well as two restaurants, a spa and more than 1,900 square feet of meeting space. The second Luxury Collection hotel will open in early 2010 in Urubamba, Peru, a beautiful, small town just one hour’s drive from Cusco, and surrounded by dramatic landscapes.
Valle Sagrado Libertador Luxury Collection Hotel will be the first internationally branded hotel to be built in the Sacred Valley of Urubamba, Peru, and will offer 128 guestrooms and more than 4,200 square feet of meeting space. Urubamba is a haven for tourists visiting Machu Picchu, which is the best-known remnant of the Inca Empire.
Westin Hotels & Resorts is making its debut in South America by opening its first property in Lima, the capital city of Peru located on the country’s western coast. The new-build hotel will be strategically located in San Isidro, a high-end neighborhood at the heart of the city’s financial district. Scheduled to open in early 2010, the new Westin will feature 311 guestrooms, more than 30,000 square feet of meeting space, a lobby bar, two restaurants and the Westin brand’s signature amenities and services including The Westin Heavenly Bed.
Starwood’s W Hotels to open its first hotel in Japan by 2010
Starwood Hotels and Resorts have entered into a joint venture with Pacific Management Corporation and Penta-Ocean Construction to manage Starwood’s first W hotel in Japan, which will open in Yokohama in 2010.
The 245-room hotel will feature its own W Living Room Bar, two restaurants, a large meeting space as well as its own spa.
The W Yokohama will offer W’s signature service, which includes a 24 hour concierge to provide whatever guests want, whenever they want it.
The W Yokohama will be located right on the water-front beside the Red Brick Warehouse, a district offering a wide range of shops and restaurants, all just a half-hour drive from Tokyo’s Haneda Airport.
As Japan’s largest port, Yokohama is home to a large expatriate community and many high-end boutiques. These facts, coupled with Yokohama’s reputation as a sophisticated and enticing destination make it a great fit with the W brand.
W Hotels is currently the world’s fastest expanding hotel with plans to open more hotels in locations such as Barcelona, Hong Kong and Athens following the popularity of their W Retreat and Spa Maldives and W Montreal.
Budget Hotelier Travelodge Looks to Spain and Beyond
Not to be outdone by their counterparts in the luxury sector, budget hoteliers are looking to carve out a slice of the rapidly expanding global hotel market for themselves.
American budget hotel operator Travelodge recently announced plans to make a big push into Spain by opening up to 100 new properties by 2020.
Travelodge has run three pilot hotel projects in Madrid and Barcelona since 2005, and plans to add hotels in Valencia, Malaga, Zaragoza and Bilbao. With barely 100 economy hotels in the entire country, Spain looks like a ripe market for Travelodge, which has enlisted the services of Horacio Alcalá, from property company Metrovacesa, to direct its development in Spain.
Travelodge is aiming its Spanish properties at Spain’s domestic market. The 100-room hotels will be constructed for a projected cost of about £4 million each. Travelodge will then lease each of the properties for 25 years at a cost of about £7 million per hotel.
Travelodge anticipates having five hotels up and running, and sites for another 15 secured by 2008. The company views Spain as the ideal place from which to stage their expansion into the broader European market, and also other international locations.