Skift Take
Standard is in a category of hotels that is coveted by Hyatt and all the big groups, and Hyatt's CEO has previously said that adding luxury and lifestyle brands creates a “network effect” that can drive growth and engagement in its loyalty program.
Sean O'Neill
Hyatt Hotels said Tuesday it plans to acquire the brands of Standard International, which operates 21 hotels across five hospitality brands, including luxury lifestyle brand The Standard.
Hyatt will pay $150 million as the base purchase price, with up to an additional $185 million for each property added to the portfolio.Standard International has more than 30 projects with signed contracts or letters of intent.
The companies expect the transaction, if approved, to close later this year.
Hyatt confirmed it would acquire all five brands operated by Standard International: The Standard, The Peri Hotel, Bunkhouse, The Standard X and The Manor.
Hyatt won't acquire any physical assets, just the management, franchise and licensing agreements for the roughly 2,000 hotel rooms. The branded homes are Standard International's latest venture; the group already sells homes in Midtown Miami, Lisbon, Thailand and Portugal, which Hyatt will also take on.
Since 2017, Thailand-based luxury property developer Sansiri has been Standard International's largest shareholder.
“The sale caps a successful investment for Sansiri, which acquired a majority stake in Standard International in 2017, furthering the company's international expansion,” Hyatt said in a statement. “Sansiri will continue to own several properties that will be managed or franchised under the acquired brands.”
The “Network Effect” of Lifestyle Hotels
The Standard and related brands belong to a category of hotels that Hyatt and all the major hotel groups are increasingly coveting: whereas a regular hotel is just a place to sleep, a “luxury lifestyle” hotel is a boutique place with a lobby that looks like a modern art gallery and a rooftop bar serving drinks with unpronounceable names.
Over the past six years, Hyatt has increased the number of lifestyle rooms in its portfolio five-fold, and Standard International is set to increase that even further.
Adding more properties creates a “network effect”: the more Instagrammable hotels an operator has, the more affluent people will want to stay there and book directly with them.
Hyatt's New Lifestyle Group
Hyatt announced that it is forming a new “dedicated lifestyle group” led by Amar Lalvani, executive chairman of Standard International. In his new role as president and creative director of the lifestyle group, Lalvani will oversee the sharing of best practices across brands while maintaining each brand's distinct identity.
Prior to founding Standard International with Andre Balazs, Lavani led the global development of W Hotels.
Morris acted as financial advisor to Hyatt on the transaction.
Correction: This article originally stated that Hyatt will increase its lifestyle rooms four-fold between 2017 and 2023, not five-fold.
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