Marriott is king of putting hotel owners above guests. That didn’t used to be true, but it began under Arne Sorenson and has hit an apex under CEO Jim Capuano. Capuano said, “When I die, they’ll put the net-rooms growth number on my tombstone.” Marriott will seemingly take a fee from any hotel, of any quality, diluting their brands in the process.
- When chains don’t own their hotels, all they have of any value is the brand.
- Diluting the brand – taking fees from hotels that don’t deliver a consistent experience or meet guest expectations – means taking revenue now, leaving guests feeling shortchanged and disappointed – and not coming back.
- Customers no longer trust the brand, and don’t remain brand-loyal. Hotel chains lose their value.
Major hotel chains are trading their long-term value for short-term profits. That’s a dangerous game. But it’s one that Hyatt says they want to compete more aggressively in?
Thompson Savannah
Alila Marea
A video interview with Hyatt’s global head of franchise and owner relations lays out the chain’s intentions. Paul Daly shares that “his work is centered on finding ways to be flexible to owners’ needs at a point when brands are being decried for their rigidity.”
“We try to be balanced there, right? Because guests expect consistency when they travel and brands have to really represent consistency, but we really do lean into flexibility,” he said in an interview with Hotel News Now at the 2024 NYU International Hospitality Industry Investment Conference. “We try and be as flexible as we can as a brand.”
…”Each brand is a little bit different,” he said. “Lifestyle hotels, there’s a lot of opportunity to be flexible. Some of the the more kind of cookie-cutter brands like Hyatt Place, Hyatt House, there’s maybe a little bit less flexibility in terms of brand specifications. But we really try and be flexible when we can because we know owners are just trying to make sure their assets are successful. It’s oversimplified, but we know when owners do well, we do well.”
- Hyatt has grown franchising over the last three years. That means they don’t manage the hotels themselves. These are usually the properties that are bigger problems with compliance. (Hotel owners looking to save a buck hire a management company like Aimbridge.) They didn’t even have a dedicated group for franchise and owner relations until 2020.
- He wants to put owners first, “We know when owners do well, we do well.”
- Hyatt has leaned into leisure. We’ve seen that with Apple Leisure Group and other high-end acquisitions.
- They’re planning for 250 extended stay Hyatt Studios properties. Half of these will be in markets with no current Hyatt footprint. They think the average business customer will put up with Hyatt Place, Hyatt House and Hyatt Studios in order to redeem points for beach resorts. World of Hyatt added 8 million members last year (remember: hotel loyalty programs add members because you join through the booking process for ‘member only’ rates).
- They’re careful imposing brand standards, since they have to eat their own dog food.
We have a great management company, as well, by the way. We still manage a lot of hotels. So when we develop specifications, we have to eat our own cooking because this management company that is still Hyatt has to be able to deliver on those standards just like a franchise owner or a third-party management company has to.
He doesn’t talk about the traditional full service Grand Hyatt or Hyatt Regency brands. Those haven’t seemed a focus for a long time. Growth comes from franchised limited-service properties and resorts. Hyatt has shifted towards growing luxury when a decade ago their focus seemed just growing limited-service.
Brand reputation matters a great deal in luxury. Customer experience matters a great deal in luxury. So while they want to compete to grow scope, joining the race to the bottom puts luxury at greatest risk. It’s an even more dangerous game for Hyatt to choose to play than Marriott.
Starwood was best at holding hotels accountable. Customers complained, they made things right, and sent hotels the bill (plus an administrative fee). More and more we’ve seen Hyatts play games with customers.
- How many months did Hyatt’s Eliza Jane add a fee for paying by credit card, even a Hyatt credit card and by the way they don’t accept cash? They continued even after Hyatt said it wasn’t permitted but thought Hyatt would let them get away with it.
- How long has the Rio in Las Vegas failed to honor full Globalist breakfast even after Hyatt said they had to bring it back?
- We’ve seen Hyatts playing games with award inventory, setting minimum night stays and creating limited-inventory room categories for those even then.
There’s no question that Hyatt skews more high end than Marriott, Hilton and IHG overall. 70% of its rooms are in the luxury and upper upscale segment and has higher average daily room rates than Marriott and Hilton overall.
Higher average room rates also fund more loyalty investment. Hotels generating higher rates can do more for customers (and must do more to continue to attract those rates, oddly unless it’s Ritz-Carlton).
Park Hyatt Abu Dhabi
The trick is offering more than a place to sleep, eat and shower – it’s offering guests an overall experience, helping them tell stories not just about their stays but about themselves, and making their lives fuller when they’re away. That’s also why cutbacks on things like housekeeping make no sense at the premium end, while some guests say ‘I re-use towels at home’ or ‘I don’t make my bed every day’ that misses the point. This is all part of the experience that is more than the sum of each feature, that guests will pay more for and why they choose a premium property over a short-term rental.
So now you are a hotel company CEO too? A tired collection of recycled minor gripe posts turns into an assault on the entire company? This is why you are NOT a CEO.
And the CEO of Marriott is Tony, not Jim
This will not slow down the forced march of Hyatt devaluing points. The gravitation toward the “do whatever it takes to keep the hotel owner/operator happy and in our fold” mentality is expected to lead to increased pressure to speed up the devaluation of points and reduce the rebate value I get from earning Hyatt points on Hyatt stays.
“They think the average business customer will put up with Hyatt Place, Hyatt House and Hyatt Studios in order to redeem points for beach resorts”
I travel fairly often with a major company and that sounds exactly right. Fewer and fewer people care about full service hotels unless the hotel is the destination (i.e. a resort).
20-40 years ago, the full service hotel was needed, but the concierge has been replaced by Google, mediocre yet expensive room service has been replaced by Uber Eats, and you can almost always find a really good breakfast/coffee within a few blocks of a full service hotel in a city, especially in the US. Even places where breakfast is included if you’re a Globalist, like Park Hyatt Vendome, sounds awesome, but when I’m in Paris I’d rather go to a café or bakery than eat hotel food and I’m pretty sure many others feel the same way.
That last paragraph got me. I’m one of those people who won’t reuse a bath towel at home. There’s no way I’m going to reuse one when I’m paying at a hotel.
Fatty kind of has a point with some of this actually so ‘bravo’ for once…kind of.
The ship has sailed on hotel loyalty programs at US properties. Intl there is still some “wow” factor but that’s starting to slowly change as well. I’ve been a hotel free agent for a while and I barely notice a difference. In fact I’m much more motivated to try smaller properties in locations that I actually want to be in that I wouldn’t have tried before because of “loyalty”
Free agency has opened my eyes and in an overwhelming percentage of times has been a good thing.
*Even places where breakfast is included if you’re a Globalist, like Park Hyatt Vendome, sounds awesome, but when I’m in Paris I’d rather go to a café or bakery than eat hotel food and I’m pretty sure many others feel the same way*
Tell me you haven’t been to Europe without telling me you haven’t been to Europe! European hotel breakfasts are amazing. Andy Hyatt typically has later hours, so you can have a wonderful brunch at 10:30- 11am.
@TravelsWithTony I have been to Paris many times, hence why I’d rather go to a different cafe or bakery each day. There are some amazing breakfast places there and I like to go to a different ones. I can always do the Vendome breakfast and pay for it one day if that is what I’m interested in. I don’t need to stay there and pay an extra 10,000 points per night minimum (and that’s assuming I just want to use Hyatt points) for the “free” globalist breakfast at Vendome.
Going to the same restaurant every day in an amazing food city seems like an awful waste, but you do you.
Next year will be the first year in 5 years that I will not shoot for globalist. The devaluation of Hyatt all inclusives, the nutty points pricing of Mr & Mrs Smith, the Hilton reasonable reward pricing of SLH, I will shift to Hilton and Marriott in combination with the use of the Chase Edit program.
@ Gary
Seems like a lot of internal turmoil.
Email friday, introducing me to my 4th globalist concierge
Also Hyatt / Rio LV as of Thursday still screwing with “globalist breakfast”
I hate to draw this analogy, but the current day Marriott reminds me of Sprint. Before the merger, whenever I got pissed at Sprint for their piss poor service (both the network and customer service) and called to cancel, they’d make me a good deal.
I think the same goes today with Marriott. I’m not a loyalist, but I stay with Marriott. Why? Because when I have points, their Pointsaver redemptions are usually very good deals. Same goes with paid says, Member only paid rates sometimes (less often than Pointsaver redemptions) are an excellent value offering a good value. Combine that with a massive footprint, and you can earn/redeem points without feeling like you are being gouged, because with SO many properties one of them will usually have a good rate when you travel (small podunk places excluded).
@TravelswithTony I’ve spent 3 years of my life in France this century. I never pay for hotel breakfast; in my opinion, only an idiot would. But, go ahead and have stale pastries.
Currently at a Hyatt House that I stay at fairly often. This is the second time of the last five times that I have stayed here that there are no tissues in the room. Not because housekeeping didn’t refill them, it is because they don’t have any available. They ran out, so instead of substituting with a different brand or something, they just don’t have any. Also, the Wi-Fi is so slow, that Speedtest can’t even start it’s test. I have been hot spotting with my phone to get decent internet. There is no excuse for these things.
I am finding Hyatt’s new additions are actually taking away from the value of the loyalty program. Unfortunately Hyatt’s have closed many lounges. New hotels that have joi Ed the program offer virtually no elite benefits. My last few stays have been at Dreams, Secrets, Alua and Zoetry with virtually no elite perks. My others have been at Hyatts and Grands with closed lounges or vastly reduced offerings. The program has gone downhill.
If customers choose to stay at high end hotels that are gonna offer questionable deals on things,then that is up to you. But,if I was an avid traveler. I’d rather stay in a place that offered fair deals- not Shady ones
Place and house blow, would never spend actual cash there. and don’t.
Still like the “core” Hyatt brands tho, but the overall reputation most definitely getting watered down.
Complaints to Hyatt might not result in changes but my corporate travel department dropped Hyatt completely after a series of complaints from my colleagues and I over the poor service we experienced at Hyatt hotels.
Hyatt made a huge mistake by failing to scoop up Radisson when it was for sale
It’s all so sad because you know where this road is leading. I wish it weren’t so, but in the end, Hyatt will join the ranks of all other hotel chains who have devalued their points so much that there’s no use to collect. Hyatt was my last remaining hotel card and it looks like it will go the way of the dodo very soon, as signified with its Mr & Mrs Smith dynamic pricing. Just indicative of the future and inescapable. So in 5 years when Hyatt finally realizes they don’t have as many loyalists staying, they’ll know why. They won’t care, but they’ll know why.
Almost all “chain” hotels are privately owned. The hotel company manages the business and hopefully the hotel follows established standards set by the hotel brand.
Hyatt is still the best by a fair bit for top tier members but they’ve been eroding benefits for years and they really need to improve things for guests rather than make things worse. For starters, make free night certificates valid for categories 1-5, return unlimited GOH awards to Globalists, make the number of hotels decreasing in category equal to the number increasing, and offer restaurant full breakfast to top elites.
Its just insulting when they email your ‘award’ of lounge access- I haven’t seen an open lounge since Covid, it seems many are not coming back. They could at least offer food credits for the lounge ‘awards’.
Sadly Hyatt is so desperate for properties to gain a larger footprint they’d
Likely take motel 6 and the pooch hotel chain if they can shove it in their portfolio
Surprised how much they have slipped in quality and value
Still ok but not nearly once what it once was
There has to be a balance between limited service and full-service. Marriott has a full-service property just about everywhere with even more limited-service properties. But I’d guess that close to 40% of the full-service properties are 1970s and 1980s downtown and suburban office park properties — the kind of hotels that have struggled since the pandemic.
I haven’t stayed at a domestic Hyatt Regency with a lounge or with an open lounge in two years. Wichita, Orlando MCO, Pittsburgh, Toronto, Denver Tech Center, Greenville, Houston IAH, San Francisco SFO, and Milwaukee. Of those properties, Milwaukee has a lounge but it’s only open three nights per week.
Despite Hyatt’s move toward franchises, Hyatt still manages more of its properties than Marriott or Hilton. Hyatt investors would be foolish to let corporate dilute the brand by allowing franchises or third parties, like Aimbridge, to manage additional full-service properties.
Lean much? My goodness. Your theories are garbage and this may as well be a post on Reddit than a “news article” as presented. You have no idea how any of that works on the inside and I think I’ll stay away from this website so I don’t have to read idiocy like this again.