Hyatt CEO talks Mr & Mrs Smith integration and bringing all-inclusive resorts to the Middle East

Hyatt’s grip on luxury and lifestyle hotels expanded last week with news the Chicago-based hotel giant plans to acquire the Mr & Mrs Smith booking platform of more than 1,500 luxury boutique hotels.

But that doesn’t mean the company is going to do any better than a major competitor it’s snatching the brand from.

At face value, Hyatt’s gain comes at the expense of IHG Hotels & Resorts, which currently has a partnership with Mr & Mrs Smith where IHG One Rewards members can earn and redeem points when staying at participating Mr & Mrs Smith hotels.

There have been complaints that it was always a little clunky booking a Mr & Mrs Smith hotel from IHG because not every one of the 1,500 or so hotels participated in the partnership. It also took some scrolling or removing of brand options on an IHG search to actually find any of the Mr & Mrs Smith hotel options.

“Even if Hyatt owns the booking platform, how’s it going to do any better herding these hotels into its World of Hyatt orbit?” This is a question I’ve been getting a lot over the last week from readers and analysts.

Hyatt CEO Mark Hoplamazian wasn’t exactly providing much in the way of details on the company’s Thursday investor call to report first-quarter earnings.

“We will be very careful in how we integrate the hotels that are part of the system,” Hoplamazian said in response to a question regarding how Mr & Mrs Smith hotels might compete in some markets against preexisting Hyatt properties. “All the hotels we expect to stay on the [Mr & Mrs Smith] platform, but that doesn’t mean that they’ll all be integrated.”

Think along the lines of Hyatt’s partnership with Small Luxury Hotels of the World, where not all SLH properties participate. But isn’t that a little strange considering, well, Hyatt will actually fully own the Mr & Mrs Smith platform?

TPG reached out for more details on what the integration process will look like. We didn’t get much intel.

“Hyatt is evaluating, but we’re not able to share specific examples,” a Hyatt spokesperson said in response to TPG’s query regarding Mr & Mrs Smith integration and competition with existing Hyatt hotels. “We’ll have more details about Mr & Mrs Smith integration into World of Hyatt following the deal close.”

Specifics might be limited, but there was a lot of fodder on Thursday’s call about why Hyatt is acquiring the Mr & Mrs Smith brand.

Hyatt has been on a luxury and lifestyle hotel buying spree for several years, from the Two Roads Hospitality acquisition that added the Thompson Hotels and Joie de Vivre (now JdV by Hyatt) brands to the more recent $2.7 billion Apple Leisure Group acquisition that beefed up Hyatt’s presence in the luxury all-inclusive resort sector. Most recently, Hyatt acquired Dream Hotel Group, providing a boost to the company’s New York City presence as well as the broader lifestyle hotel sector.

The Mr & Mrs Smith deal adds to that theme, but it brings in a mix of much smaller hotels than is typically expected with major brand and loyalty affiliation. But these also play into Hyatt’s game of pricey luxe hotels: The typical nightly rate of a Mr & Mrs Smith hotel is in the mid-$400 range, Hoplamazian said.

“They’re small, so these are not hotels that would naturally be part of a larger brand company like our portfolio, and we feel like this is a massive expansion in the World of Hyatt members’ access to hotels,” he added.

Our eyes will be focused on how easy it is to integrate all those hotels at a level where members can earn and redeem points on a widescale basis.

Hyatt’s business travel comeback

It was a strong quarter for Hyatt, as the company posted a $58 million profit. Part of that stems from the broader hotel industry’s recovery from the pandemic — riding on strong leisure demand and high hotel rates.

The company’s overall hotel performance in March was 8% ahead of 2019 levels and set an all-time record in the company’s history, according to Joan Bottarini, Hyatt’s chief financial officer.

Expect higher hotel rates to maintain and even grow, as Hyatt leaders were the latest in the industry to say they anticipate better-than-expected results for the duration of 2023.

The recovery in Asia Pacific, as well as increasing group and business travel demand, provide that optimism.

Hyatt’s all-inclusive plans go global

Hyatt’s Apple Leisure takeover provided a major lift for the company’s presence in the all-inclusive resort sector as well as in Europe. Hyatt’s Europe footprint expanded by 60% thanks to the deal. But it now has its eyes set on taking Apple Leisure brands, which include offerings like Secrets and Dreams, farther abroad.

“We have been responding to and pursuing additional regions in the Middle East and in Asia, so I would be surprised if we did not end up with new projects in those two regions in short order because the interest level is very high,” Hoplamazian said.

While Hyatt has a significant presence in both regions with its traditional hotel brands, it doesn’t currently operate any all-inclusive brands in these parts of the world.

“It would be a relatively new format for much of those regions, so we’re taking it very carefully,” Hoplamazian added.

Related reading: