One-On-One: Hyatt Launches Three New Hotel Brands, Nears E-Folio
Global Hyatt Corp. has introduced three new brands across three different hotel tiers and is increasing focus on international development. Tom O'Toole, Hyatt senior vice president of strategy and systems, last week spoke to Business Travel News hotel editor Michael B. Baker about Hyatt's development progress and technology plans.
BTN: What does Hyatt's recent rash of development mean for travel buyers?
Tom O'Toole: From a sales organization point of view, a corporate travel manager will be able to do one-stop shopping for multiple brands in every tier of the market worldwide. That's where Hyatt is headed. In the year to date, Hyatt has introduced three new brands, including what is by far the most important brand introduction in the company's history, Hyatt Place, followed by Hyatt Summerfield Suites, followed by, just a few weeks ago, the announcement of our new Hyatt-owned luxury brand Andaz. Then, in terms of full-service hotels, we will be opening outside of North America in the next several years an unprecedented—I mean that literally, not hyperbolically—number of hotels.
BTN: Has there been an increase or restructuring in sales staff?
O'Toole: Restructuring only in the sense of enabling the sales organization to sell all of our brands. This was our organizational intention all along.
BTN: How is the midprice Hyatt Place brand coming along?
O'Toole: We are well along toward completing 120 Hyatt Place hotel properties in North America in 2007. To the best of our knowledge, it's an unprecedented brand introduction to go from a standing start to 120 properties in a single calendar year. We are right on track. What is most gratifying is the business performance of the hotels that are already open. The Hyatt Place properties actually exceeded the projected business performance.
BTN: Hyatt Place sprung from the purchase of AmeriSuites. What conversion is going on?
O'Toole: The conversion really is an extreme makeover in the sense that Hyatt Place has an entirely new room design and it's an entirely new building space design. This really is gutting the rooms and the lobbies.
BTN: Meanwhile, what sort of progress is being made with the new extended stay brand, Summerfield Suites?
O'Toole: Hyatt Summerfield Suites is an interesting case of a successful brand that Hyatt had the opportunity to enhance with some of the learning and features from our development of Hyatt Place, by enabling its sales through the sales organization and accelerating the development and growth of the brand. What you see is a very prudent and methodical development of our brand portfolio. This isn't done yet, as evidenced by the fact we just announced Andaz.
BTN: What's its status?
O'Toole: It will be introduced first in London at the end of this year with the conversion of the Great Eastern Hotel, followed by two hotels in New York. We believe there was a market opportunity existing for a new global luxury brand that would offer a more relaxed style with a truly five-star level of service.
BTN: To what degree will this development be international?
O'Toole: A lot. In China, there's not just a large number of hotels already in the pipeline and in the process of development or opening but also a wealth of opportunity in cities where Hyatts are already located. Given the brand differentiation that Hyatt offers, it is very reasonable for us to do a Park Hyatt, Grand Hyatt and Hyatt Regency in the same city. Arguably, the best-known and most prestigious hotel in China is the Grand Hyatt Shanghai, and soon we will have the Park Hyatt Shanghai there as well. In Beijing, within the next couple of years, you'll have both a Park Hyatt and Grand Hyatt. India is another example of a plethora of opportunities, and there's quite a bit of development opportunity in Asia for the Hyatt Place brand.
BTN: How about Hyatt's existing properties?
O'Toole: There really is no substitute in this business for capital investment, and Hyatt has invested literally hundreds of millions of dollars in properties like the Grand Hyatt New York or the Hyatt Regency O'Hare. I wish every corporate travel manager could see Hyatt Regency O'Hare. It is truly a different hotel than it ever was, and it really evidences where Hyatt is headed.
BTN: Does Hyatt offer free high-speed Internet access?
O'Toole: Internet access is no charge at Hyatt Place and Hyatt Summerfield Suites, and there is a charge at our full-service hotels. Hyatt's competitive differentiation in this regard is that we have a partnership with T-Mobile and offer branded Internet access.
BTN: Are there are plans to change that policy?
O'Toole: What's most important to customers is the quality and reliability of the service. There's very, very little pushback to charging for it. It's like the different between tap water and bottled water. You know you're getting Evian rather than tap water. One of the things we did introduce last year that actually produced very positive customer reaction is the ability to charge the T-Mobile Wi-Fi service right to your guest folio. Once we had that enabled, it's really a very good arrangement.
BTN: Are there any plans to make electronic folio data available through corporate cards?
O'Toole: We've had select agreements in place for a couple of years now, not on the card side, but with particular corporate accounts. There's a lot of movement happening, and I expect we will be in position for a comprehensive e-folio announcement before too long. I don't want to get ahead of ourselves, but that is actively in development. We're headed for a broad e-folio solution.
BTN: What level of success has Hyatt had in securing corporate dynamic pricing agreements?
O'Toole: A greater portion of our corporate travel relationships is enabling dynamically priced rates. It may not be the optimal approach for all markets on the customer side and on the supplier side. We're now going through a constructive period of testing the waters in both directions.