Hyatt expands luxury offerings amid challenges maintaining older properties

Despite reporting a $471 million third-quarter profit, analysts raised concerns about an unusual number of rooms leaving Hyatt's portfolio. Hoplamazian attributed this to strict brand standards that some owners find challenging to maintain on older properties.

Hoplamazian explained that some markets have become more challenging or have seen shifts in central business districts, leading Hyatt to seek new representation. He emphasized maintaining standards and elevating the quality of their portfolio as key factors in these decisions.

Unlike competitors Marriott, Hilton, and IHG who offer options for owners not wanting to meet brand standards but wishing to remain within the company orbit, Hyatt does not currently offer such alternatives. "We do not at this point have a brand into which we would encourage owners who want to downgrade their hotels," Hoplamazian stated.

CFO Joan Bottarini hinted at potential developments in this area: "There is opportunity. It's something we've been looking at since the beginning of time."

Hoplamazian also discussed details on the Standard acquisition and upcoming joint venture with Grupo Piñero. The Standard takeover will add 22 lifestyle hotels with approximately 2,000 rooms to World of Hyatt. An additional 10 hotels are in development under Standard-affiliated projects.

Regarding the Bahia Principe partnership, it aims to enhance Hyatt's all-inclusive resort offerings by introducing more value-oriented resorts alongside existing five-star properties.

These expansions come as World of Hyatt membership reaches a record 51 million members — up 22% from last year — with cobranded credit card use increasing by 16%.

"Our members continue to benefit from our greater system size and expanding collection of world-class brands," Hoplamazian noted.