Hyatt’s major problems are:
- that their footprint is so much smaller than major players IHG, Hilton, and Marriott (they’re about 10% the size of Marriott), and
- that they’re building a high-end strategy while their growth has come largely in the limited-service sector.
They tried to grow by buying Kimpton, but wouldn’t overpay as much as IHG did. They tried to grow by buying Starwood, but their complicated stock structure — the Pritzker family has outsized voting rights — was a challenge.
There are plenty of smaller chains left, but ones like Omni and Loews would hardly move the needle. Even chains with several hundred properties that are left are mostly regional.
Hyatt though appears to be making a regional play: they’ve expressed interest in acquiring NH Hotels, the Madrid-based chain with 379 hotels in 30 countries.
Most NH (“Navarra Hoteles”) hotels are centered in Europe but they have a presence in Latin America. Their only property in the US is the closed for refurbishment. NH had acquired the Italian chain Jolly, Atron in Germany, and Krasnapolsky from the Netherlands.
On the whole the chain features some uninspiring properties, though there are also some gems. The Hesperia Mallorca Villamil for instance looks lovely.
Hesperia Mallorca Villamil, Credit: NH Hotels
They have airport hotels near Frankfurt, Madrid, Milan Linate, Amsterdam, Vienna, Brussels, Zurich, Geneva, Mexico City and more.
China’s troubled HNA Group, parent of Hainan Airlines, has sold its shares in Hilton and has been unloading other investments as it struggles to deal with nearly $100 billion in debt. At one point they couldn’t buy jet fuel. And they’ve sold their shares in NH Hotels as well, to Thailand’s Minor International has been working to acquire NH entirely in a decision set for an August 9th shareholders meeting.
Hyatt could make a counter offer, with CEO Mark Hoplamazian saying,
We believe that marrying NH Hotel Group’s strong footprint in Europe and select other markets with Hyatt’s global presence would yield a powerful portfolio of brands and network of hotels delivering compelling benefits for guests, owners and shareholders of both companies.”
The problem here of course is that while this helps them in Europe, they’d be acquiring management of many properties which may not fit well into existing brands (though they could keep current branding) and some that are less than what many Hyatt guests are used to, and it only helps them in limited segments of the world.
Still it’s one of the few medium-sized players out there. If Hyatt itself isn’t going to be acquired they probably do need to assemble deals like this — and they probably need either NH Hotels or Meliá Hotels Ias part of that strategy.