Earlier this year, Hyatt reaffirmed its commitment to growth with plans to open 45 new hotels across the globe over the next two years.
During a recent trip to Singapore, Hyatt Executive Vice President of Global Franchising and Development, Jim Chu, spoke exclusively to HM’s Ruth Hogan about the return of international travel to Asia, plans to bring Hyatt’s all-inclusive brands to the region, and the launch of a luxury Japanese accommodation concept.
Asia has been slow to reopen following the pandemic – a number of markets were still shut off to visitors until recently. What are you seeing now in terms of the return of international travel to this region?
From a personal perspective, getting a flight from the States to Singapore was virtually impossible. People are traveling which is a good sign of the recovery coming into these larger, more corporate-oriented marketplaces. Of my flight from Chicago to San Francisco, I would say about 70% of us were going on to Singapore – unrelated – so, I thought that was interesting.
We’re starting to see recovery in our other non-China markets in a pretty pronounced way from a corporate travel perspective. South Korea is currently above 2019 pace – it’s pretty similar to what we are seeing elsewhere around the world from a recovery perspective – and that’s without Chinese travel. [Pre-pandemic] China was the second or third largest or the primary feeder market for so many markets in Asia, but Japan and South Korea are thriving without it.
We’re hopeful that we continue to see Hong Kong and China pick up because, obviously, those were healthy growth markets for us in the past and we anticipate they will be in the future, we’re just not sure if the future is next year or the year after, but we do see it improving.
We’ve been fortunate that, like other organisations, we’ve seen recovery in the Americas region, we’ve seen recovery in the EMEA region, and the recovery has been so pronounced in those regions that it has effectively offset the small recovery that we’ve seen in one of the greatest growth markets for us, which has been Asia Pacific, and China in particular. That’s been great, not only from a business perspective, but also from a development and a growth perspective. Once we see greater China recover that will be a pretty amazing run – that’s what we’re projecting. We’re excited about the direction that it’s heading in.
In what segments are you seeing the most demand from travellers at the moment?
Luxury-leisure and leisure are leading it. And that funny term ‘bleisure’, we’ve definitely been a recipient of that.
We play in the upper-upscale and leisure markets and those have been super dynamic. We’ve seen a great performance in our resort portfolio, and in our all-inclusive portfolio that we acquired back in November 2021, so that’s all been a blessing.
We’ve started to see a recovery in group travel, which is great. If you asked us about it two years ago, we would have said group travel would trail but we’ve seen this recover in most markets. Now, we’ve started to see recovery in our commercial travel which is the third leg of the stool.
Is leisure your main focus for future openings as a result or are there other segments that you see of growing importance for the future?
What we’re opening today is really a by-product of what we have had in the pipeline as long as 3-5 years ago. We have been fortunate in our number of openings of leisure hotels over the last 24 months, but it’s not solely leisure hotels. The Andaz in Bali, for instance, is a group type marketplace and incentive hotel which is a very mature and seasoned leisure destination.
We opened up a Park Hyatt in Jakarta, and a hotel at Fuji Speedway earlier this month. Those hotels have a great appeal to all travel segments, I wouldn’t say that they are specific to leisure, but they are conducive to leisure. In the last 24 months, we’ve done a lot of conversion of independent hotels particularly into our soft brands of Unbound, JdV and Destination. A lot of independent owners or independent markets have looked at the pandemic as a need to be more competitive and more efficient in the way they derive business, and that’s through affiliation of companies like Hyatt and our brands. We’ve seen great success over the last six to eight quarters in that. A lot of these independent lifestyle hotels are also conducive to this luxury-leisure travel.
The Andaz brand is also making its debut in Thailand later this year. Is it a pretty transferable brand that works across most markets in APAC?
Yes, it does. It’s not a secondary market brand, it’s typically primary markets and resorts, but it originally had a very Asian-influenced design theme so it fits very well into the greater Asia and APAC marketplace. It has a very personal style, and it’s very individualised in the way that it caters to the clientele, which really resonated through COVID because of the demand for luxury-leisure travel.
How is the all-inclusive resort segment growing and what are the plans to evolve that?
We closed that transaction with ALG (Apple Leisure Group) in November 2021, and quite honestly, it has outperformed even our estimates. Not only has it resonated within our core leisure travellers, but it has resonated generally with the marketplace. We’re in major all-inclusive markets like Cancun in Mexico and Dominican Republic in Jamaica and in southern Spain, which are really traditional all-inclusive marketplaces where there is a large population. We see a couple of things happening. One is interest to grow that brand outside of those traditional markets that have been growing for the last couple of decades. We’ve signed a five-pack of all-inclusive hotels in Bulgaria which is indicative of a growth strategy where we can take our all-inclusive brands and apply them into new markets where it wasn’t represented – and we absolutely have a strategy to bring the product into Asia, in Southeast Asia. We know that it is not a robust marketplace today as it reports to all-inclusive, but it is a high leisure market, and we know that the product will resonate – it just hasn’t gotten over here yet.
Hyatt recently announced the launch of the Atona brand, created in partnership with Japanese developer Kiraku. What can we expect from this brand?
One of the strategies that we’ve had about growth has been serving our customer set and finding ways to translate these experiences. We did it with Miraval, our wellness brand, which we continue to grow, and Atona is an extension of that same strategy – creating experiences that are unique or individualised. With Atona, we are bringing a modernised interpretation of the Japanese Ryokan (traditional Japanese inn) experience catering to both the traditional marketplace (Japanese), but also to an international traveller. It fits because a lot of the Ryokans over thousands of years have been traditional experiences but not luxury experiences. There are a fair percentage of luxury Ryokans that have done well, and that’s the marketplace that we’re targeting, the luxury Ryokan marketplace. It’s a joint venture, and we expect to see that brand starting to deliver hopefully as early as 2025 – as a general matter, they are new construction hotels. We’re really excited about that brand because it delivers on our strategy of delivering luxury experiences to the high-end customer.
‘Individualised’ seems to be the key word at the moment – moving away from that cookie-cutter approach. Is that a challenge when trying to do it at scale?
Yes, it is – honestly, we have to keep a mindful eye to it. I don’t think Atona, in particular, is going to a mass brand like you would see in maybe mid-scale distribution or even in our Hyatt Place brand, which is upscale. I think it’ll be very curated, very experiential. It will be not only in some major markets but also some tertiary, localised, individual markets within Japan. They are small experiences and small marketplaces where I think we can do two things; deliver on that experience in the way that we want to and have permission to deliver those brands to our customer set and to that luxury customer. If we go back to the early years, when we launched Park Hyatt in Asia, and when we brought Andaz into Asia, it’s about tailored experiences. It’s things that we’ve done well, we’ve executed it well, and we’re confident that we can continue to do that. We’re not looking to be the largest lodging company out there, that’s never been our goal, but we do want to be differentiated and we want to be the best in the segments that we play in.
It was interesting to see Hyatt’s recent partnership with sportswear brand Fila to open the first ever Fila-branded hotel in Shanghai. Are partnerships with major brands something Hyatt is interested in focusing on further in the future?
I think it’s a great opportunity for us. We didn’t set out with a strategy to focus on consumer brands, like Fila which is well identified within that marketplace. We had a development partner that brought that forward with us – we liked the notion of it. It does fit well within our soft brands strategy with Unbound and JdV – you can take an individual hotel that has a unique either brand offering and/or experience offering and put that story inside our soft brands and be able to do two things; let it continue to survive and thrive but yet give it a platform to be distributed through our channels of both leisure and business travel. That’s why it worked with Fila. Would we be receptive to doing something similar to that again? Absolutely.
What’s in the pipeline for Australia and New Zealand? What are customers looking for in these markets?
It’s an extension of the same strategy – it’s upper-upscale and luxury. We have a growing portfolio in those areas. Unlike other companies, we’ve been trying to bring our brands to life through our own developers versus doing large chain distribution programs within that marketplace. Today, we’re at 11 [properties]. We have a pipeline that we will continue to deliver over the next several years. We are mindful of the projects that we do there. It’s a very, very important marketplace. One of the things we did pre-COVID was we put a developer into the marketplace, which has been very beneficial to us because in a market the size (geographically) and specificity between New Zealand and Australia, you have to be local in order to be able to deliver that.