Hyatt Hotels Corp. Sweeps Both Upscale Segments with Hyatt Regency & Hyatt Place

Hyatt Hotels Corp. proved a dominant player in this year's survey, particularly in the upscale segments, where three of its brands snagged top slots. The company has seen tremendous growth in recent years. In its most recent earnings call, CEO Mark Hoplamazian said hotel room supply rose 7 percent over the previous year and its signed deals equal 37 percent of Hyatt's current rooms. Bjorn Hanson, a clinical professor at the New York University School of Professional Studies Tisch Center for Hospitality and Tourism, said Hyatt Hotels' more established position as a public company—its IPO occurred in November 2009—also may have something to do with its brands being more top of mind.

Snagging the No. 1 spot in the upper-upscale segment, Hyatt Regency earned the highest scores for corporate rate programs, data quality and price/value relationship. Hanson said the price/value piece is a particular strength of the Regency brand. "These are typically very dramatic hotels," he said, "but the rates aren't higher just because of the atrium lobbies or more interesting architecture." Though Hyatt Regency properties are diverse in both market type and appearance, full-service features—such as flexible spaces in rooms and lobbies to work and relax, plus full restaurant and bar spaces—nevertheless run standard.

The upper-upscale segment once more proved the most competitive in BTN's survey, as first and third places were separated by just 0.02 points on a six-point scale.

More luxury than upper-upscale, second place InterContinental Hotels & Resorts improved on its 2016 performance, in which it placed fourth. It earned the top marks for helpful and courteous service, public business amenities, in-room business amenities, personal amenities and traveler satisfaction.

InterContinental specializes in distinctive style and has continued to expand its global portfolio, opening eight properties last year. As of June 30, it boasted a pipeline of 63 hotels, 25 of those in Greater China. Its portfolio stands at 64,572 open rooms across 188 properties in more than 60 countries.

Third place Hyatt received the highest scores in the upper-upscale tier for sales staff, consistency, ease of negotiating group travel and meetings, and meeting facilities. Its brand standards include full-service restaurants and bars with creative food and beverage concepts, lobby lounges, fitness centers, pools and small meeting rooms.

Hyatt Hotels Corp. VP of global sales for the Americas Gus Vonderheide said all the Hyatt brands emphasize to on-property staff the importance of emotional intelligence and empathy. "We are doing a number of things with property-based training right now to touch all these people who are [interacting with] customers," he said. "Are we actually worried about the guy that comes in at 2 o'clock in the morning to check in to the front desk? Are we really thinking about, again, what he's been through, what she's been through? Are we understanding why they're visiting? That kind of thing."

The company also finds success with its guest experience management system, which allows on-property staff to note customers' likes and dislikes and track that information across the organization. "If Mrs. Smith checks into the Hyatt in Sydney, Australia, and we find out that she likes feather pillows, Hyatt Regency Atlanta will know that just as quickly," Vonderheide said. "We start to be able to really build some camaraderie and some great stories with these customers as they come back and, all of a sudden, they're not having to ask anymore because we know them."

From January to July, the average daily rate for the upper-upscale segment increased 1.5 percent year over year to $182.56, according to STR. Occupancy decreased 0.2 percent to 75.4 percent. The segment is starting to see an imbalance between supply growth, 2 percent, and demand growth, 1.8 percent.

Upscale Brands

After falling to fourth in 2016, Hyatt Place this year returned to the top spot it had occupied in 2015. While "roomy rooms," modern design and a casual atmosphere are still trademarks of Hyatt Place, Hyatt Hotels Corp. VP of global brands Steven Dominguez said the brand is evolving to meet the standards of guests who want more from the upscale hotel experience. "We've started on the innovation trajectory with an eye toward really evolving consistently with our guests. Their needs are changing; their expectations are changing," he said. "We want to change with them."

This year, Hyatt Place launched Breakfast Your Way, featuring customizable breakfast bowls with high-quality ingredients, such as cage-free eggs, all-natural bacon and sausage, Greek yogurt and steel-cut oatmeal. Dominguez said the brand's breakfast is a step above while balancing needs: remaining both free for guests and feasible for owners.

Hyatt Hotels Corp. in recent years has expanded its select-service footprint aggressively through Hyatt Place and Hyatt House, which earned the top score for price/value relationship in the upscale extended-stay segment. Through those brands, the company is gaining ground, particularly in urban markets. It added 13 Hyatt Place hotels during the second quarter, bringing the brand portfolio to 244 properties.

Tech-forward Aloft Hotels snagged second place in the upscale segment, earning the highest scores for physical appearance, in-room business amenities and personal amenities.

Senior director of global brand management Bridget Higgins said the brand serves as a sort of R&D lab for Marriott International. For instance, Aloft, already known for deploying a robotic butler, aka Botlr, is testing an on-property chatbot addition called Chat Botlr.

"When you have guests that are up in their room and calling downstairs to the front desk, oftentimes that front desk talent is missing the call or has to pick up the phone and interrupt their interaction with the guest that's checking in," Higgins said. "What the Chat Botlr is able to do is allow the guest that's in the room to get connected and put in their request and get information that they need and allow the front desk talent the ability to really provide an impactful and meaningful experience for the guest that's checking in."

The brand is also geared to providing a fun, social environment for guests, particularly through its W XYZ Bar and its Aloft Live music programming. "Our hotels are able to provide a local experience through the lens of music," Higgins said, "bringing in a local artist to give guests a sense of what the music sounds like, say, in Nashville as compared to San Francisco and Taiwan and Abu Dhabi."

During Marriott International's most recent earnings call, CEO Arne Sorenson said Aloft's strength as a select-service product and franchisees' increased interest in the brand make it a keen target for development. There were 130 Aloft Hotels globally as of June 30.

Third place DoubleTree by Hilton earned the highest score among upscale hotel brands for its meeting facilities. DoubleTree global head and SVP Dianna Vaughan said the brand continually invests in its meetings product, focusing on flexible meetings spaces that feature high-quality audiovisual equipment and wireless technology optimized for laptops and tablets.

The brand opened its 500th property in February and around that time also opened its 100th property in the Europe/Middle East region.

From January to July, the upscale segment's average daily rate increased 1.3 percent year over year to $140.58, according to STR. Occupancy decreased 0.8 percent to 74.6 percent. The segment boasts the largest net growth of any other tier in both supply, 6 percent, and demand, 5.1 percent. However, the imbalance between supply and demand within the upscale segment could impact occupancy and pricing power negatively in the quarters and years ahead.