Introduction
Hyatt Hotel Corporation is a US hospitality establishment with many branches worldwide. It was founded by Hyatt Robert and Jack Crouch in 1957 when they purchased Hyatt House at LA International Airport. The company went global twelve years later and grew by developing portfolios and acquisitions. The hotel acquired AmeriSuites in 2004, and Two Roads in 2018, and the most recent acquisition is Apple Leisure Group (ALG) and Dream Hotel in 2022 (Whyte, 2021). The revenue per room available (RevPar) has contributed significantly towards this hotel’s acquisition and expansion factors.
Discussion
Hyatt Hotel RevPar from 2019-2021 has been increasing, improving its room occupancy and gaining the power to acquire new properties. In 2019, the firm’s income increased by over 25%, where a whopping $296 million was witnessed as a gain in the third quarter (“Hyatt reports fourth quarter 2019 results,” 2019). The company has sold Hyatt Regency Atlanta and other properties that improved its revenue. By the end of 2019, the company’s net income increased to $321 million. That was a collaborative effort from the global management and offering unique hotel services that meet current customer needs (Dobrosielski, 2019). The hotel’s average daily rate (ADR) for rooms went high by 1.5%, translating to a 0.7% RevPAR increase (Bryantt & Weber, 2020). With more than 15656 rooms, the ADR was $20,503, and the occupancy rate of 61.8%; thus, the RevPAR was 105 USD (Bryantt & Weber, 2020). In 2020, the net room growth witnessed a 5.2% decrease, which made ADR reach $18,405, translating to RevPAR of 56 USD from its global operations (Bryantt & Weber, 2020). These projections inspired the hotel to expand more in the industry.
The total revenues were reduced due to the emergence of COVID-19, where many travelers stopped booking hotels as a measure to curtail the matter. The 2021 RevPAR shot to 76 USD from 56 dollars in 2020 (Bryantt & Weber, 2020). Hyatt Hotels Corporation’s total earnings in 2021 revealed high expectations, so they purchased ALG for $2.7 billion and Dream Hotels for $300 million. (McCarthy, 2021; Jelski, 2022). The hotel also collaboratively developed a strategic alliance with the Shougang Group. The expanded portfolio was agreed upon based on performance in the China region, with the key strategic goal being the strengthening of network and brand portfolio for the company in the Asian area. The alliance is meant to raise the brands and increase customer loyalty through a joint venture (Whyte, 2021). The hotel’s high revenue returns effectively enable all these financial moves.
There is effectiveness in acquiring new hotels and partnering with others to offer hospitality services. Firstly, through acquisitions and strategic alliances, Hyatt Hotels addresses financial issues. That means there will be increased sales, and that raises its revenue in the form of RevPAR. For instance, upon acquiring ALG, Hyatt Hotels president Alejandro Reynal assured the customers of continued offer of exemplary travel services with luxury (McCarthy, 2021). Therefore, those moves mean the hotel will build a strong loyalty and reputation, which translates to increased revenue facilitated by global expansion and ventures.
Conclusion
Secondly, Hyatt Hotels Corporation builds a strong competitive base compared to other hotels such as Hilton, Marriott International, and many others, enabling hotels to recover from financial redundancies from the pandemic. The reason is that acquisitions and strategic alliances lead to an all-inclusive space that meets modern culinary, restaurant, and exploration services. Reynal said, “Hyatt and ALG have highly complementary brand portfolios and share a deep commitment to colleagues and guest experiences focused on care” (McCarthy, 2021 para. 5). The hotel is ready to expand its differentiation to beat other global giants in the same industry. When hotels acquire new properties, their sales rate goes high. For instance, acquiring Dream Hotel Group and ALG saw the addition of more than 1700 and 33,000 guest rooms in the portfolio, respectively (McCarthy, 2021; Jelski, 2022). When the revenue goes high, that becomes a competitive base since the company has financial resources that enable innovation and changes that can bring a difference.
References
Bryantt, A., & Weber, F. (2020). Hyatt reports fourth quarter 2020 results. Hyatt Hotels Corporation – Hyatt Reports Fourth Quarter 2020 Results. Web.
Dobrosielski, C. (2019). Hyatt lowers 2019 forecast after Flat Q3 RevPAR. Hotel Management. Web.
Hyatt reports fourth quarter 2019 results. (2019). Hyatt Hotels Corporation. Web.
Jelski, C. (2022). Hyatt is buying Dream Hotel Group for up to $300 million. Travel Weekly. Web.
McCarthy, D. (2021). ‘The beginning of ALG’s next chapter’: Hyatt completes $2.7 billion acquisition. Travel Market Report: The Voice of The Travel Advisor. Web.
Whyte, P. (2021). Why Hyatt is buying Apple Leisure Group. Hospitality Investor. Web.