Hyatt Hotels & Resorts has been active on the branding front, converting acquired brands to the Hyatt House brand. The company is being aggressive on the distribution front, as well, becoming a founding member of Room Key, a site created by hotel companies to take market share back from online travel agencies (OTAs). Contributing editor Harvey Chipkin spoke with Jack Horne, Hyatt's senior vice president of sales for North America, about these and other issues.
Q: You're converting the Hyatt Summerfield Suites and Hotel Sierra properties to the Hyatt House brand. What's the status of those conversions?
A: The goal is to have all the hotels converted by the end of the year. Acquiring Sierra Suites gave us the distribution we needed in many locations. Summerfield never resonated with travelers.
Q: What will distinguish Hyatt House from other extended-stay and all-suite properties?
A: The focus is on the residential feel. Our lobby is more expansive than most, with amenities like oversized furniture for guest comfort and a game room. Travelers did not get Summerfield as an extended-stay product, and we had only 35% who stayed five nights or more. We would like to get that number to 40% or even 50% at Hyatt House. The brand will be similar in quality to [upscale, select-service brand] Hyatt Place. The difference will be the average stay at a Hyatt Place is one to three nights.
Q: You are a founding member of Room Key. Do you think it will be able to win back market share from the OTAs?
A: Room Key is just another alternative distribution channel, targeting leisure. The jury is out on whether we can get market share back from the OTAs through Room Key, but it does give us another channel. Meanwhile, booking on our brand sites is growing. That's partly due to loyalty programs, which are becoming more competitive and attractive to consumers.
Q: Where do you see your growth across brands?
A: We like to grow as we have in San Diego, where we have a Park Hyatt, an Andaz and a Hyatt Place. We want our brands in every market, if not on every street corner. Our goal lies more in enhancing standards rather than increasing numbers. We have invested $300 million of our own money in hotels in which we have equity, like Atlanta, Chicago, New York, San Antonio and San Francisco. We want to set an example for our owners. The number of international travelers to the U.S. is soaring, and we want to get domestic properties up to the standards of Hyatts abroad. We will say to the owners: "Look, we've done it. Can you do it?" And some already are. For one thing, we are hoping to have a Grand Club, our lounge concept, installed into all Grand Hyatts in the U.S.
Q: Where will the growth be geographically?
A: Of course we are looking at China and India, but we are underrepresented in Europe. We have nothing in places like Ireland or Spain or Rome. The opening of the Park Hyatt in New York in 2013 will catapult that brand domestically. We would like to get Park Hyatt back into Los Angeles and San Francisco.
Q: Hyatt does a lot of meetings business, which took a big hit in the recession. Is that coming back?
A: It is coming back, but the cost of getting that business jumped from 12% in 2008 to 17% in 2011. The reason is that so many companies cut their meeting staffs and turned it over to third-party planners, which take a piece of the action. All we can do is hope we can raise rates enough to compensate for that.