Hyatt executives highlight new partnerships as the loyalty program experiences significant growth

Members of the World of Hyatt loyalty program are increasingly discovering new opportunities to earn and redeem points — and the Chicago-based hotel giant is just getting started with its diverse offerings.

On Tuesday morning, Hyatt announced a substantial profit of $359 million for the second quarter. The company is benefiting from rising demand for business and group travel, while leisure travel, which thrived during the pandemic, is expected to stabilize by the end of the year. Leaders attribute this success to a combination of new partnerships and brand expansions, including over 700 hotels from the Mr & Mrs Smith platform and a new collaboration with luxury outdoor resort brand Under Canvas, ushering in a new era for the company.

The statistics reinforce this trend: World of Hyatt membership has increased by 21% compared to last year. Additionally, Hyatt CEO Mark Hoplamazian noted that the expansion of the loyalty program’s reach is driving overall growth. The company’s development pipeline now boasts a record high of 130,000 rooms.

"By focusing on enhancing our network as we expand, we can provide more choices for our members, which boosts their loyalty to Hyatt and enhances our appeal to potential developers," Hoplamazian stated during an earnings call on Tuesday.

Mr & Mrs Smith is off to an exciting start

This year, one of the most significant additions to the Hyatt platform has been the Mr & Mrs Smith booking platform for boutique and luxury hotels, which Hyatt acquired last year. While not all Mr & Mrs Smith hotels are set to join World of Hyatt, an initial group of over 700 properties was integrated into the loyalty network earlier this year. Hoplamazian elaborated on what this means for loyalty.

More than 80% of the Mr & Mrs Smith hotels participating in the World of Hyatt have attracted bookings from loyalty members. Notably, 20% of these bookings were made by Globalists, the top tier in the World of Hyatt loyalty program, with two-thirds of overall bookings being cash rather than award redemptions.

These initial booking figures might indicate that award redemptions at Mr & Mrs Smith hotels aren't as favorable as those at Hyatt's established properties included in the award chart. However, Mr & Mrs Smith hotels utilize dynamic pricing, allowing all room types at these hotels to be eligible for award redemption, unlike the specified room and suite types available at properties in the award chart.

By the end of this year, Hyatt anticipates that over 1,000 hotels within Mr & Mrs Smith will join World of Hyatt, a substantial increase compared to the roughly 350 Small Luxury Hotels of the World that were part of the loyalty program before SLH and Hyatt ended their partnership.

Embracing diverse lifestyles

In addition to integrating Mr & Mrs Smith, Hyatt has made significant progress in various lifestyle travel offerings. The company has established a partnership with Under Canvas, a premium outdoor resort brand renowned for its luxurious safari-style tent accommodations. World of Hyatt members can book stays at Under Canvas camps and the new Ulum Moab resort through Hyatt to earn and redeem points.

In Europe, Hyatt intends to utilize its recently acquired Me and All Hotels brand to strengthen its foothold in the lifestyle hotel market. This brand, obtained from Hyatt's Lindner Hotels partner in Germany, is well-suited for converting existing properties. Don't overlook the potential for global expansion of this Europe-focused brand under Hyatt's management.

"It's crucial to understand that our strategic positioning and brand alignment are crafted to aggressively grow and capture market share across Europe," Hoplamazian stated. "While we anticipate the brand's chain scale in Europe initially, we see global growth opportunities, offering more destinations for our members and guests to enjoy a curated lifestyle experience."

Could Standard Hotels be joining the mix?

For those seeking confirmation that Hyatt is looking to forge a relationship with Standard International, the parent company of the trendy Standard Hotels brand, Tuesday's announcements were somewhat ambiguous. Hoplamazian did hint at a wave of growth opportunities on the horizon, but it seems these won't resemble traditional acquisitions.

"We have been and will continue to be very deliberate in our growth strategies, both organic and inorganic, ensuring that our brand and property portfolio expansion opens up avenues for new guests to discover and join World of Hyatt," stated Hoplamazian.

While the specifics were sparse, the Hyatt CEO provided additional insights into how the company is evolving globally through various partnerships. This could resemble Hyatt's operations in Germany with Lindner Hotels, where the focus is less on outright acquisitions and more on transitioning hotels into existing Hyatt brands, such as the JdV by Hyatt collection.

"Since the beginning of this year, I've been discussing the strong opportunities we see — real opportunities, not just theoretical ones — for portfolio deals. Sometimes this means forming strategic partnerships, like the Lindner Hotels agreement where we establish franchise agreements for those properties," Hoplamazian noted. "Other times, it could involve acquiring a brand or a management platform."

However, there is always a fundamental principle steering Hyatt on this journey.

"Our primary focus remains on understanding our customer base, as we always have," Hoplamazian explained. "This is our starting point, ensuring that each acquisition or partnership we pursue already has identified growth potential embedded within it."