Park Hyatt Plans Rapid Growth

CHICAGO— Sparked by similar plans of other deluxe hotel developers, Hyatt Hotels Corp. recently revealed that it wants to grow its upscale Park Hyatt brand from 18 properties to “40 to 50” in the near future. This aggressive plan is Hyatt’s answer to the at least 20 properties each that Four Seasons and Ritz-Carlton have currently under development globally, and to Regent’s and Omni’s desire to double their portfolio of deluxe hotels. According to industry analysts, the bold move is spurred on by the strong economy and by business and leisure travelers willing to pay top dollar for high-end accommodations, Scott Miller, president of Hyatt Hotels, said that he sees the Park Hyatt brand as a “head-to-head competitor of Ritz-Carlton and Four Seasons.” Its profile, he said, is to cater to both the transient traveler and the smaller meetings market. Properties range from 200 to 300 rooms in size, and are located primarily in gateway cities. Each of the properties will also contain a limited number of residential units, Miller added. Regarding actual Park Hyatt development, “in many of the circumstances they will be new builds, but we have converted a number of assets [to Park Hyatts], so we will see an equal mix,” said Miller. Outstanding Style It is the style in which a Park Hyatt is developed that will set it apart from its competitors, Miller noted. “These hotels are not hotels manufactured in a lab in Chicago. We feel they should be reflective of the community in which they are developed. They should resonate the local culture in the hotel, and, ultimately, in the [hotel’s] food and beverage offerings.” Miller pointed to the recently opened Park Hyatt Chicago as a good example of a product Hyatt is seeking to further develop. The 45-story property resides on Chicago’s North Michigan Avenue with retailers on its ground floor representing the area’s culture. A late-night jazz club beckons inside; paintings by a local artist adorn the walls. Public spaces are appointed with black-and-white photographs reflecting Chicago’s seasons, taken by local photographers commissioned by Hyatt. In addition, the property has 115 condo residences “that were sold to leading citizens in the community,” said Miller. The residential element is likely to appear in other Park Hyatts in urban markets, he noted, since “it helps to establish an address, and, frankly, it lowers the cost on an average basis on the land.” Aside from the 18 Park Hyatts open worldwide, seven are in various stages of construction or pre-construction, he revealed. Domestic areas targeted for brand growth are Miami, Dallas and New Orleans, along with the “Aspen, Colorados of the world.” International wish-list cities include Mendoza, Milan, Paris, Zurich and Seoul, Korea. “Internationally I think of us being in cities with inbound and outbound international travelers,” said Miller. Three-Pronged Development Known for having strong control over the properties on which it hangs its flags, Hyatt will take a three-pronged approach to developing future Park Hyatts, said Miller. “We are likely to find ourselves in circumstances where hotels fall into three categories: [first], through outright management where we have no financial interest in the asset; [second], through joint ventures where we would have a 10% to 15% interest; and [third], there will be circumstances where we control the asset, having greater than 50% interest. While all of [these routes]are opportunity-driven, we are likely to see equal growth in each category,” he stated. How will the high end Park Hyatt fare in an economic downturn? Miller admits the hotel business is a cyclical one, but points to the high-end sector of the market whose discretionary travel plans are not affected by price constraints.