Hyatt Hotels is rumored to be in negotiations for acquiring Standard Hotels, a small buy growing chain of premium boutique hotels in major markets.
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Hyatt’s Potential Acquisition of Standard Hotels: Expanding Luxury Offerings
In a strategic move to enhance its luxury portfolio, Hyatt is reportedly in advanced talks to acquire the Standard Hotels brand. This acquisition would significantly expand Hyatt’s presence in high-end global destinations. Standard Hotels operates boutique properties in prominent cities such as New York, London, Ibiza, the Maldives, Bangkok, Melbourne, and Singapore, among other locations. Although the transaction price remains undisclosed and neither Hyatt nor Standard have confirmed the deal, the acquisition appears imminent.
Hyatt’s Strategic Acquisitions
Over recent years, Hyatt has aggressively expanded its luxury and resort offerings. The purchase of Apple Leisure Group doubled Hyatt’s luxury rooms and tripled its resort rooms. Following this strategy, Hyatt’s focus has shifted towards acquiring more boutique and high-end brands like Standard Hotels.
What’s particularly interesting about this potential acquisition is that it parts with the “asset-light” approach the brand has focused on. Rather than building its own hotels, it manages and markets hotels owned by franchisees. This makes the business richer without heavy real estate on the books and takes away the issues and costs of managing the hotels day-to-day. While the hotel chain is small, and it may ultimately sell the assets to franchisees while maintaining the brand management, it remains a departure from the model it has honed and has become the industry standard from giants like IHG, Hilton, and Marriott.
The acquisition of Standard Hotels would also dive deeper into “bleisure”, the blend of business and leisure trips. The hotels are not business standard like Hyatt Regency or Marriott properties. It’s a fun brand more akin to what the W brand used to be, and Hyatt’s own Andaz. However, most of the properties are focused in major cities that attract both tourism and business clients. For example, The Standard Hotel’s first location was in downtown Los Angeles. The Standard Hotel NYC options are in the Meatpacking District and on the High Line. It threads a needle of a new type of traveler that avoids business hotels but still has to travel for work.
The Legacy of Standard Hotels
Founded by the renowned hotelier Andre Balazs, the Standard Hotels brand is known for its celebrity allure and trendy atmosphere. The brand’s first property opened in 1999 on Hollywood’s Sunset Strip, backed by investors including Leonardo DiCaprio, Cameron Diaz, and Benicio del Toro. Although the original Hollywood property closed in 2021, the iconic rooftop bar at The Standard, High Line in Manhattan’s Chelsea neighborhood continues to thrive.
It’s the irreverent, cool vibe that makes The Standard Hotels attractive.
Expansion Under New Leadership
Since Amber Asher took over as CEO in 2021, Standard International has seen rapid expansion. The company currently operates approximately 20 hotels under the Standard Hotels flagship brand, as well as its sister brands Bunkhouse and The Peri Hotel. These properties are located in major markets such as London, New York City, Ibiza, Miami, and the Maldives. New hotels have recently opened in Melbourne, Singapore, and Lisbon, with future openings planned in Dublin and Brussels next year. The company aims to launch up to a dozen new hotels within the next five years in locations including Brooklyn, Austin, Mexico, Vancouver, Vienna, Khao Yai, Nashville, and Pattaya.
Hyatt’s Global Growth
Hyatt has been expanding its global footprint through both organic growth and strategic acquisitions. Since 2017, Hyatt’s pipeline has grown by nearly 85 percent, reaching a record 129,000 rooms, with a significant portion of this growth in high-end properties.
Recently, Hyatt acquired the ‘me and all hotels’ brand from Lindner Hotels, adding six properties and over 1,000 rooms in Germany to its portfolio. This follows other major acquisitions, such as the purchase of lifestyle-centric Two Roads Hospitality in 2018 for $480 million, which included brands like Alila, Destination, Joie de Vivre, Thompson, and Tommie.
There’s no question, however, that Hyatt is trying to add to the spark that Standard has. Rather than fold it into Andaz, I believe it will continue to stand alone as its own brand under the Hyatt flag as Thompson and others have been left to their own devices.
Conclusion
Hyatt’s potential acquisition of Standard Hotels represents a strategic move to further solidify its presence in the luxury hotel market. By incorporating the trendy and celebrity-favored Standard Hotels into its portfolio, Hyatt continues to demonstrate its commitment to expanding its high-end offerings and global footprint. If the rumors are true and The Standard acquisition materializes it positions Hyatt as an even more premium operator than it already is.
What do you think?
I’m pretty ambivalent about this. Hyatt already has too many brands and more forays into the category 5+ range don’t do it for me. I’d love for Hyatt to invest time and energy into getting more hotels that I can actually use my multiple category 1-4 certificates at rather than a Maldives resort. Still, I guess more choices are better than fewer choices.