How Hyatt is preparing to enter the mid-range hotel segment

Hyatt is preparing to expand aggressively into the upper mid-range segment of hotels with the launch of its new brand, Hyatt Select. It is a select-service chain designed to be conversion-friendly, allowing existing hotels to easily join the Hyatt network. Although no deals have been signed yet, Hyatt is investing in the new brand as part of a broader growth strategy.

Strengthening its presence in the mid-range

Hyatt Select is the sixth addition to the company’s Essentials Portfolio, which already includes Caption by Hyatt, Hyatt Place, Hyatt House, Hyatt Studios, and UrCove. With more than 1,400 hotels and all-inclusive resorts in 79 countries and more than 30 brands, Hyatt is trying to fill a gap in the market by giving travelers a more affordable entry into Hyatt’s system and the World of Hyatt loyalty program.

Dan Hansen, head of development in the Americas and head of Hyatt Studios, explains that Hyatt is strategically targeting markets where its presence is limited or nonexistent. “We identified a number of markets where Hyatt has little or no presence, and we can fill that gap with a conversion-friendly brand,” he said.

An alternative to upgrading existing hotels

Hyatt Select is also intended to act as a conversion platform for older Hyatt Place hotels, giving them a new identity. According to Jason Ballard, chief operating officer of Hyatt Studios and Hyatt Select, “We are now offering an opportunity for new hotels in new markets, while also increasing our customers’ access to the World of Hyatt loyalty program, which now has a record 54 million members.”

Targeting emerging markets and transit travelers

“Our growth to date has been primarily focused on luxury hospitality, but now is our opportunity to balance that with a brand that appeals to both business and leisure travelers,” Hansen added.

While Hyatt Studios exposed the company’s big gap in the upper midrange segment, not all markets were suitable for an extended-stay model. Hyatt Select was designed for areas like airports and cities in Latin America, where adding a full kitchen isn’t necessary due to the high demand for short-term stays.

Flexibility and profitability in the business model

Hyatt Select will not have strict requirements for the size and structure of its hotels. The company will allow for a variety of room configurations, ranging from 70 to 200 rooms, without requiring full kitchens or large common areas. A pool and meeting rooms will be optional, while an emphasis will be placed on fitness facilities and providing quality breakfast.

In addition, the new chain’s business model will be light on staff and oriented towards high efficiency. “We will invest in the 24/7 market, with premium coffee options and self-service alcoholic beverages, which is a significant differentiator in that market,” Ballard said.

Maintaining Hyatt quality

Despite focusing on a more affordable category, Hyatt does not intend to sacrifice quality. “This is not a brand where we’re just going to put a Hyatt sign on a building,” Hansen said, emphasizing that the company will maintain high standards of quality. “We’re going to be selective about conversions and not allow substandard properties to carry the Hyatt name.”

With a focus on conversions and a groundbreaking new building in the works, Hyatt is looking to rapidly develop its new brand. The company expects Hyatt Select to fill a significant need in the market and be a strategic extension of its portfolio while maintaining its premium identity in every category it serves.

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