The recent news of Hyatt’s acquisition of Standard International is just one of many examples of major players in the hospitality industry seeking to enhance their portfolios with boutique additions. This move reflects a growing trend where large hotel companies are adopting a more expansive strategy by acquiring smaller, independent brands to broaden their reach. Patrick Scholes, managing director for lodging and leisure equity research at Truist Securities, emphasized that the industry is witnessing a trend of “brand grab,” particularly in the higher-end hotel sector. The goal for these companies is to increase their global brand footprint and net room counts through acquisitions of unique and distinctive brands like Standard.
According to Scholes, developing a new lifestyle brand from scratch would be much more costly for a company like Hyatt compared to acquiring an established brand. In addition to cost savings, these acquisitions provide the acquired brands with access to a larger company’s global marketing, online reservation network, guest reward system, and favorable lending availability. Robert Cole, Phocuswright’s senior research analyst for lodging and leisure travel, highlighted the importance of scale for boutique brands to thrive in the market. Acquiring larger-scale resources, including reward programs and management efficiencies, is crucial for boutique brands to grow and succeed.
The Hyatt purchase of Standard International is part of a series of high-profile lifestyle and boutique hotel deals in recent years. Other major hotel companies, such as Accor and Hilton, have also been actively involved in acquiring lifestyle brands to expand their portfolios. These acquisitions aim to consolidate various lifestyle brands under one umbrella to offer a diverse range of experiences to guests. By tapping into the unique offerings of boutique brands, hotels can cater to different market segments and enhance their overall appeal.
The acquisition of Standard International by Hyatt is set to strengthen the former’s presence in the lifestyle hotel segment. Standard International’s portfolio includes The Standard lifestyle brand, Bunkhouse Hotels, Peri Hotels, and The StandardX, each with its distinct identity and appeal. With plans to launch new concepts like The Manner, Standard International continues to innovate and expand its offerings globally. The acquisition will enable Hyatt to establish a lifestyle group in New York, indicating a strategic move to maintain the independence and unique appeal of the acquired brands.
Industry experts suggest that maintaining a certain degree of independence is crucial for preserving a brand’s popularity and appeal after acquisition. Hyatt’s plan to establish a lifestyle group in New York, headed by Amar Lalvani from Standard International, indicates a hands-off approach to integration. By allowing acquired brands like Standard to operate autonomously, Hyatt aims to preserve the unique characteristics that make these brands attractive to consumers. This approach reflects a shift in the industry towards embracing unconventional and edgy hospitality brands that offer a distinct and memorable guest experience.
As the hotel industry continues to evolve, major players like Hilton, Hyatt, and Marriott are expected to pursue further brand acquisitions and strategic partnerships. The recent acquisitions of Graduate, MGM, NoMad, and Sonder demonstrate a growing trend towards diversifying portfolios and appealing to a wider range of travelers. By collaborating with boutique brands and incorporating their unique offerings into their portfolios, hotel companies can enhance their competitiveness and cater to the evolving preferences of modern travelers.