The pontification gland, like the pituitary gland, is what keeps us all ticking over, particularly when real life is in short supply and pretty much all of our living has to be done inside our heads. Did we mention it’s Mental Health Week next week?
One of the most popular areas of pontification in this sector has been around business travel: when it’s coming back and what it’s going to look like. On the first point, results from Hyatt and Hilton this week both saw them leaning towards the end of this year. On the latter, the gland still pulses.
Hyatt, however, was willing to take a punt and has partnered up with Paris-based AI startup Swapcard to offer Together by Hyatt, a hybrid offering which will see it host a 1,000-strong gathering in the US later this year, 500 attendees of which will be in the flesh. Yes, 1,000 people. Just like a real-live event.
Mark Hoplamazian, Hyatt’s president & CEO, said that the offering meant it was seeing increased interest from the pharma, information technology, and banking and finance segments and that it was “notable that larger in-person corporate and association events are occurring as early as June”.
The agreement with Swapcard, he said, would allow Hyatt to “develop a robust and innovative integration of their platform with our proprietary meeting tools, one that will simplify event planning and execution, and unify in-person and virtual attendee experiences”.
We’re fans of the word ‘unifying’ and in this case it marks an acceptance that hotels will have to get out there and come up with their own solutions to the events business, rather than relying on vaccine rollout. As Hoplamazian went on to tell CNBC – next to a ticker showing Hyatt’s share price rising – when you have people travelling to an event from all over the world, until the pandemic is over, some will be unable to attend and it’s hard to guess who.
Hoplamazian was perky all over the place, willing to be drawn on where the company might deploy the billions it’s stashing. And where? On…resorts, commenting: “we’re looking to ensure that we’ve got very compelling resort alternatives for our guests, not just because of the benefits within the World of Hyatt, but because it’s been shown, especially in the customer base that we serve, which is a relatively higher customer base that they are continuously demanding and looking to travel at an elevated rate”.
Indication that a return to the old ways is not imminent.
Another ongoing trend was conversions, with the CEO describing them as “a meaningful catalyst with three properties converted from other brands in Q1”. Franchises were also popular, with the mix of franchise rooms growing from 16% of total rooms a decade ago to over 36% today, reflecting a compound annual growth rate of 15%.
So the message is: we need a brand but in the lightest possible touch.
This was much echoed at Hilton, where Chris Nassetta, president & CEO, was “pleased” – there’s a word – and the group was cheered by “the strength of its newer, conversion-friendly brands”. The group celebrated the openings of its100th Curio and 50th Tapestry hotel, with overall conversions accounted for approximately 24% of additions in the quarter.
The group saw net unit growth of 5.8%, with Nassetta “confident in our ability to grow net units to mid single digit range for the next several years and continue to expect growth in the 4.5% to 5% range in 2021”. At Hyatt the company was hoping to grow units, on a net rooms basis, by over 5.0% this year.
How much of this growth will be conversions and how much will continue to follow that franchise route? What does this mean for the core brands, the heavy hitters, and do the global flags care? What is clear at Hyatt is that if you want the lucrative business back, only the nimble need apply.