Hyatt launches new brand aimed at affordable, longer stays


Even in the worst months of the pandemic, extended-stay hotels were a surprising bright spot in the travel industry and maintained the highest occupancy rates across all hotel sectors.

The industry noticed, and major brands all started making various plays to add an extended-stay hotel brand to their lineup. Hyatt became the latest on Tuesday by announcing Hyatt Studios, the company’s 28th brand.

Hyatt Studios is the company’s first “upper-midscale” brand in the Americas (UrCove by Hyatt is an upper-midscale brand that operates exclusively in China). It aims to court both extended-stay travelers as well as shorter-stay leisure and business customers.

If you’re wondering what, exactly, upper-midscale means, hotel data firm STR lists brands like Comfort Inn, Hampton and Holiday Inn within this category.

The traveler mix will likely depend on the location of each hotel. However, Hyatt Studios guest rooms across the brand will all have one key feature of extended-stay property: a kitchenette where you can prepare meals while away from home.

A change in tune?

Earlier this year, Hyatt appeared to be notably bucking the trend of major competitors like Marriott International and Hilton, both of which were moving toward more affordable hotel brands. Instead, Hyatt remained focused on higher-end travel with luxury and lifestyle hotels and luxury all-inclusive resorts.

However, offering more affordable options like Hyatt Studios — which will be clustered in a select-service brand mix that also includes Hyatt Place, Hyatt House and Caption by Hyatt — gives the company a presence in smaller markets that might not be able to support more expensive offerings like Thompson Hotels or Park Hyatt.

“We identified a white space for Hyatt, creating a compelling opportunity to significantly accelerate our industry-leading net rooms growth, care for World of Hyatt members on more stay occasions and introduce World of Hyatt to new guests in a new segment which we expect will drive increased direct bookings for all properties across the Hyatt portfolio,” Jim Chu, Hyatt’s chief growth officer, said in a statement.

The company claims it has signed letters of interest in development agreements from multiple hotel developers for more than 100 Hyatt Studios hotels. Construction on the first hotels is expected to begin later this year, and the first Hyatt Studios hotel is slated to open in 2024.

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Hyatt Studios will only feature new-build hotels compared to other brands that sometimes grow by converting existing hotels.

Artist rendering of Hyatt Studios exterior. HYATT

Along with the in-room kitchen, Hyatt Studios will offer free grab-and-go breakfast and a 24-hour market that sells ready-made meals and snacks that can be prepared in the room. Renderings provided to TPG show guest rooms also feature a seating area, a flexible workstation and open shelving for storing luggage and clothes.

Company leaders maintain that Hyatt Studios will still target higher-end clientele in the market it operates.

“As with all brands in the Hyatt portfolio, Hyatt Studios hotels will appeal to the high-end guest within its segment,” Amy Weinberg, Hyatt’s senior vice president of loyalty, brand marketing and consumer insights, said.

Acknowledging “a sea of interchangeable extended-stay competitors,” Weinberg said Hyatt Studios hotels will provide “both the coziness of a studio apartment and the positive energy of being in a creative studio, all with the quality and contemporary style that is characteristic of Hyatt.”

The battle for the budget traveler

Hyatt might focus more on high-end travelers, but Hyatt Studios still enables the company to go after more budget-conscious travelers. They aren’t the only ones in this increasingly crowded space by the biggest hotel companies.

Marriott is expected to soon close on a deal to acquire Mexico-based City Express, a chain of affordable midscale hotels across Latin America. There is potential for the company to expand that brand globally as it did with AC, originally a Spanish chain of hotels.

Hyatt Studios lobby. HYATT

Hilton’s premium economy Spark brand is expected to roll out later this year, and Hilton’s CEO Christopher Nassetta earlier this year noted that while the brand might not be “sexy,” it also had “an opportunity to be a value contributor in the billions of dollars for this company and its shareholders” and that he was “as excited about this as anything else.”

So, what explains the sudden push into more affordable options?

Think of it as a starter car for the hotel orbit. If you provide younger customers with less disposable income with a more affordable brand, you have the potential to retain them as they grow up, make more money and can start shelling out for those costlier brands.

“The sooner you get them into the system and [start] building loyalty with them, the better off you are,” Nassetta said of Spark on an investor call in February.

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