The luxury lifestyle hotel segment remains Hyatt's core business.
The Chicago-based hotel giant announced plans Tuesday to acquire New York City-based Standard International and most of its affiliates for a base price of $150 million. The Standard International portfolio includes The Standard and Bunkhouse Hotel brands and has 21 hotels in operation.
With more than 30 properties in various stages of development, Hyatt's acquisition could add another $185 million to its total spend as more of those hotels open. Standard's portfolio also includes the new Standard X brand and The Manor, a soon-to-open luxury hotel in New York City's SoHo neighborhood.
On the loyalty side, all Standard International properties included in the agreement will be integrated into the World of Hyatt network.
“The Standard International team has created a portfolio of unique, award-winning brands and properties that disrupt the status quo and have attracted a loyal following of the most discerning lifestyle guests over the past 25 years,” Hyatt CEO Mark Hoplamazian said in a statement. “These properties truly lead the zeitgeist and create destinations of their own with well-known, much-talked-about programming and events, such as the Met Gala after-party. We are thrilled to welcome Standard International's properties and team into the Hyatt family, along with our newly created Lifestyle Group, and to leverage their talent, creativity, culture and innovation.”
Rumors of a possible acquisition surfaced late last month. Standard's most well-known properties include The Standard at the High Line in New York City and The Standard at Mahanakhon in Bangkok. Hyatt's current lineup of lifestyle brands includes Dream Hotels, Thompson Hotels, Andaz and Alila, and acquiring Standard would provide a major boost to Hyatt's strong lifestyle hotel push. Hyatt's lifestyle hotel room count is already growing fivefold between 2017 and 2023, and the company acquired the Mr. & Mrs. Smith luxury lifestyle hotel booking platform last year.
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The Standard acquisition is expected to close later this year, creating a New York City-based specialty lifestyle group. Ammar Lalvani, executive chairman of Standard International, will become Hyatt's new head of lifestyle, a structure similar to how Hilton appointed Graduate Hotels president Kevin Osterhaus as president of global lifestyle brands after acquiring Graduate.
“It has been a long time since we last found the right company to join forces,” Lalvani said in a statement. “Choosing Hyatt allows us to leverage their strong global infrastructure and loyal customer base. I am incredibly proud that our team has been able to realize the potential we saw in The Standard and Bunkhouse Hotels, and honored that Hyatt recognizes the specialness of our brand, our properties and most importantly, our employees. We share a shared vision of the great potential that still lies ahead.”
The structure signals that major hotel conglomerates like Hyatt are realizing that the best approach to succeeding in the lifestyle hotel space is to leave their creative juices largely intact: Brands like Marriott's W appeared to stumble when they moved too far away from their original design and creative teams, and recent acquisitions of major brands signal an industry move to avoid similar mistakes.
Accor's acquisition of Ennismore, for example, will be primarily run by brand leaders such as Gleneagles, Delano and SLS, and the new lifestyle group will be made up of “the talented Standard International team and Hyatt colleagues,” according to Hyatt's announcement on Tuesday afternoon.
However, the announcement made no mention of Standard International's current CEO, Amber Asher, which some have suggested could be a sign she is leaving the company. Asher and Standard are one of the few women to hold the top role at a hotel brand in the industry.
“After leading growth as CEO for the past three years and 13 years with the company, Amber Asher has decided to pursue new opportunities after remaining in the role for a transition period to support her team and ensure a smooth transition,” a Standard International spokesperson told TPG after this story was first published.
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