Why Hyatt Is Selling $2B in Assets | WSJ

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Hyatt Hotels Corporation plans on selling off up to $2 billion worth of its real estate assets - mimicking a business strategy implemented by its competitors Marriott and Hilton years ago.
WSJ sits down with the hospitality company’s CEO Mark Hoplamazian for an extended interview to discuss why Hyatt jumped onto the asset-light strategy, and what this means for the company's future.
Chapters:
0:00 Focus on luxury
0:25 Hyatt’s shifting business model
4:25 Risks in the transition
6:03 Operating costs
9:44 Airbnb vs. hotels
Hyatt is smaller than its hotel chain competitors. So how did it get to be the most expensive? Watch the Economics of Hyatt: on.wsj.com/3xplJuQ
How did Marriott become the largest hotel chain, with over 30 brands? Marriott’s CFO explains why this is just the beginning for the hospitality giant: on.wsj.com/3J4RhZy
#Travel #Hotels #WSJ

Опубликовано:

19 май 2024

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Комментарии : 150

@wsj Месяц назад

Hyatt is smaller than its hotel chain competitors. So how did it get to be the most expensive? Watch the Economics of Hyatt: on.wsj.com/3xplJuQ How did Marriott become the largest hotel chain, with over 30 brands? Marriott’s CFO explains why this is just the beginning for the hospitality giant: on.wsj.com/3THFc1g

@johnl.7754 Месяц назад

Across most industries the luxury brands always have fewer locations than their mass market competitors.

@anthonyrussell4888 Месяц назад

Hyatts tend to be fantastic properties. I'm a big fan of the flag.

@colinhuff8591 11 дней назад

The owners of the Hyatt hotel, the pritzkers, are funding these anti Jewish protests fyi.

@giff74 Месяц назад

I like it when CEOs and management are actually smart and creative instead of "let's cut our workforce and spending until Wall St likes us again"!

@Ashnesss Месяц назад

You need the right business model and location for this. If you’re in a location where your business model doesn’t work, you won’t have high revenue and you can’t afford to have workforce. Small businesses can’t emulate this. They don’t have the same cash flow, assets, reserves or management. Cutting workforce has worked for many. That’s why companies do it. They don’t do it for nothing.

@eyelovecolorado2195 Месяц назад

They won’t be the ones without chair when the music stops! 😂

@19MAD95 Месяц назад

They want to be a more powerful Airbnb. The money is no longer in the real estate because it’s too expensive. The money is in the booking software and “servicing” the hotels.

@sikpig7302 Месяц назад

@@19MAD95they also want a lighter asset base because they were leverage financing multiple properties. Noting increase just on margin lines and mezzanine financing forced them to sell.

@michaelgrayson409 Месяц назад

If you have Hyatt loyalty status, Hyatt shifting more heavily towards franchising should worry you. Look to Hilton and Marriott to see how hard their franchisees will work to not honor elite benefits and how indifferent corporate will be. Hyatt being the direct owner of their properties was a differentiator. Storm clouds are gathering.

@KamiInValhalla Месяц назад

I have stayed with Hyatt quite a few times. Did a lot if business travel and always arrive around 11 PM to midnight. Never had a problem with them.

@J3ailey Месяц назад

Love the direction that Hyatt is going. One of their best properties, has to be Alila Ventana Big Sur, which has a stand out experience: - gifts of jade and a sage smudge stick left on your bedside - on-site farm for guests to harvest fresh produce (fruits, veggies) - beekeeping experiences with honey tasting - hiking through the redwoods Hyatt truly goes above and beyond to curate one of the most uniquely memorable hotel stays!

@ro6742 Месяц назад

You are completely oblivious to what’s about to happen. Love it! 🍿😎🥤

@J3ailey Месяц назад

@@ro6742 I'd expect service quality to go down for everything except their corporately owned and operated properties (the luxury experiences) - but maybe that means those hotels will have outsized value for redemptions that go beyond the perks highlighted above at the Alila Ventana!

@undyinsoul Месяц назад

hyatt is certainly deleveraging by selling hotels to the buyers (private equities, REIT, pension funds, and family offices) and will profit continuously with franchise fees, royalties, etc. with that money, buying leisure companies specializing in vacation resorts for upper-income consumers.

@HKim0072 Месяц назад

The video is a little bit ambiguous, but that's only 1 part of their business. - Sell properties --> assuming it is a sale-leaseback --> buy new established properties - Work with franchisee business (30% of the total rooms) - Run the hotel business directly (70% of the total rooms)

@chi-jenyang9752 Месяц назад

Smart move. Divest when the real estate bubble is just about to burst.

@ayhay4686 Месяц назад

They did it to themselves. Why would a successful hotel and real estate businessman agree to destroy their industry by installing hidden cameras inside the clients' rooms? Trust is a very important element for any successful business venture. Also, it's like governments don't exist. Travelers have enough stress already to deal with. Now, they have to worry about ending up streamed live on a shady website? The next millionaire or billionaire will be the one who designs and manufactures efficient mini or micro spycamera detectors.

@joshjhoward Месяц назад

@@ayhay4686 Are you talking about Hyatt or people who own Airbnb residences?

@HKim0072 Месяц назад

umm, you realize they are still using the properties that they sold right? They are still Hyatt branded hotels.

@ayhay4686 Месяц назад

@@joshjhoward Hotels/motels/airbnb/exchange/rentals...etc

@kk4649k Месяц назад

Fools been saying real estate will bust since beginning of pandemic. Year after year people got it wrong.

@LucyGreen-jg6pi Месяц назад

🤩Thank goodness you brought this up! I'm favoured, $60K every week! I can now give back to the locals in my community and also support God's work and the church. God bless America,,

@just_wendy9290 Месяц назад

Do you have any tips for those of us who are just starting to dip our toes into this world ? Thanks for sharing your story!

@thegreatyorker6132 Месяц назад

Do you mind sharing info on the adviser who assisted you? I'm 29 now and would love to grow my portfolio and plan my retirement😊

@LucyGreen-jg6pi Месяц назад

Lisa Winters Financials is the licensed CFP I use.Just research the name. You'd find necessary details to work with to set up an appointment

@thegreatyorker6132 Месяц назад

Thank you for sharing, I must say, Lisa appears to be very knowledgeable. After coming across her web page, I went through her resume and it was quite impressive.

@DarinJames-lt6dc Месяц назад

She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; I’d see if she got her own channel on here on youtube but anyway thank you for sharing.

@TheRadioAteMyTV Месяц назад

Are these guys brothers? It's like watching the same person interview themselves with a hair colour change.

@K4R3N Месяц назад

Father and son

@randycouture32 Месяц назад

I can’t unsee this now 😂😂

@Antenox Месяц назад

I thought it was just me. It's like he's interviewing himself from 20 years in the future

@adamoliver4094 Месяц назад

"My executive coach told me to talk more with my hands"

@Xolition Месяц назад

Loool my President in a nutshell. Crazy part is it totally works.

@lmac7633 Месяц назад

Hahahaha

@konigstiger3252 Месяц назад

Ayo?

@mimusic1853 Месяц назад

The tale doesn’t wag the dog regardless of who owns, operates or collects a franchise % percentage for flagship use it all comes down to the economy. Rising tide raises all boats.

@stefanbucur6472 Месяц назад

They can feel the crash in the real estate market coming and they're trying to sell at the top

@Epicknuckle1 Месяц назад

But these are the companies that stock up to buy land once the market is in recession.

@Ashnesss Месяц назад

Lol companies don’t sell that fast. They can predict market trends and the economy and know when to sell. That makes them smart. The buyers aren’t dumb either. They’re companies too. They buy for a reason.

@itstheweather5859 26 дней назад

Yep!

@lokesh303101 Месяц назад

The Spending on Tourism did diversified with many choices being offered in the Leisure Industry as for the Customer Preferences are meant for Savings then the Luxury Markets are Constrained to Selloff the Assets.

@MelissaHobbs-qm8wi Месяц назад

The cost of living seems to be increasing every year, making it harder to keep up.

@mishmohd Месяц назад

I don't think it's accurate to say you have a diverse offering when in the same breath you said you're target more affluent costumers. I think what Hyatt is betting on is that most areas considered hot today will no longer be in demand, and that the new locations are the up and coming hotspots.

@Epicknuckle1 Месяц назад

People are not focussing on the fact that this guy is brilliant. His ideas and visions are really good.

@AnotherMartinez Месяц назад

As Platinum Dreams member, this integration to Hyatt has been awful - Dreams trying to sell me perpetual “upgrades” of my membership, warnings against “losing my benefits” if I don’t join Hyatt -and so on… I think Hyatt is going to screw me up

@erichuang1251 Месяц назад

You're kind of a fool to buy into timeshare programs in the first place. If you tell me next that you financed the down payment I'm going to laugh

@itstheweather5859 26 дней назад

Trying to get you to buy up when you already bought into a timeshare? I smell scam here.... pyramid scheme... they have no fresh blood to buy timeshares, so now they are preasuring the timeshare owners to upgrade or else....

@amonifinau4048 Месяц назад

Thank you!

@colinadevivero Месяц назад

Best interview to date

@overwatch8848 Месяц назад

does that mean theres a bubble thats about to burst? 😅

@mimusic1853 Месяц назад

@MCthespeaker Месяц назад

Yes

@delaparraklaus Месяц назад

Very eloquent and competent.

@Jack74u2 Месяц назад

Not a bad video though as stated this is the common playbook. It's a good story from a great brand though not necessarily different from the competition. Hyatt is later (a.k.a. more deliberate) on the franchise model rebalancing which has pros and cons.

@mimusic1853 Месяц назад

I’m glad you approve we can all rest well tonight.

@_iErik Месяц назад

11 minutes of my life that I’ll never get back.

@SorminaESar Месяц назад

No tech news briefing from Zoe Thomas at all, I miss her❤😢

@levratalex4929 Месяц назад

Great content

@toddtheisen8386 Месяц назад

Hotel company that no longer wants to own hotels. A way to make cash in the short term but long term, who knows?

@dangervybz7522 Месяц назад

Not the shelter business 🤣🤣🤣

@ceeceeh6484 Месяц назад

A lot of ways to say " we need more money" 😅

@drewconway7135 Месяц назад

3:14 “Did waiting a bit longer allow you to be more deliberate?” What kind of question is that??

@ArjunKumar-qh6wq 28 дней назад

good questions

@alexandrugheorghe5610 Месяц назад

I stayed a few times in a Hyatt hotel in Seattle, WA. It was okay.

@matthewishunting 13 дней назад

"OK is not bad :D and that's why I like to hear" - Hyatt Chief Mediocrity Officer

@AlanSmith88888 Месяц назад

Because interest rates are high and they are hurting on their loans.

@alexanderjules1869 Месяц назад

The disrespect to IHG is appalling

@DeCypher67_ Месяц назад

curious , how much is a ( re invested a portion ) back into the business

@jessicaregina1956 Месяц назад

What is that your business and what will knowing it help you?😂

@shanghaidiscovery2664 Месяц назад

This is not really new for them. I worked for Hyatt in Asia over 20 years ago and almost all properties then were already owned by entities other than Hyatt

@dccalvo 21 день назад

“they’re in the shelter business and we’re in the hospitality business”

@ArikMkd День назад

So actually all the big hotel brands like Hyatt, Marriot etc. are going to control the market without competition and raise prices to the roof

@valentinpoggio5389 Месяц назад

Airbnb = shelter felt like a sophisticated way of calling me broke 😂

@fleischwolf82 Месяц назад

No doubt they have a brand, but its not luxury. Mandarin-Oriental, Four Season, Six Senses and some more are in another league.

@ajclaravall_ Месяц назад

We really needed this talk. 👏🏻

@mimusic1853 Месяц назад

@jordankendall86 23 дня назад

I thought it was funny how said Airbnb was in the "Shelter" business. That is a huge mischaracterization. Although there are many Airbnb's that fit the definition of low quality or are like staying at a Motel, there are also many properties on Airbnb that cater to a unique experience and many of them in unique locations. So, Airbnb is diverse in its offerings and it is far from simply a shelter business similar to a long-term furnished rental.

@a_grown_ass_kid Месяц назад

Can anyone break down the *real* reason they're doing this?

@itstheweather5859 26 дней назад

Going under?

@nitishasthana03 Месяц назад

This interview was great by virtue of the fact that how great was the interview.

@HKim0072 Месяц назад

Too lazy to research, but I wish they would have done a run down on what happens now. Ok, so they sold the properties. I'm guessing it's some type of sale-leaseback arrangement? And, Hyatt built a new hotel in Seoul, Korea in 2019: Andaz brand. Who paid all the upfront costs? Is it some type of joint venture with a REIT? etc etc

@Nainara32 Месяц назад

I agree, more on the new business model would be interesting. If they're a service company now, what's the actual value proposition that they're offering relative to their competitors?

@andrewesquerra4356 Месяц назад

No, I assume the new hotel owners use the Hyatt brand name, processes, proprietary info, etc. In exchange, they pay a fee to Hyatt. Just like a chick-fil-a. Normal franchise business model.

@HKim0072 Месяц назад

@@andrewesquerra4356 Obviously, the video did a poor job explaining it then (or you did a poor job listening). That's only 30% of their rooms. The other 70% are directly managed by Hyatt. I don't think you are familiar with the sale-leaseback business. Please research before commenting.

@Elricky124 Месяц назад

I hope Hyatt quality does not go down with these sell offs.

@celestialfix Месяц назад

Hyatt seems equivalent to a Westin to me……their luxury brand, Park Hyatts, are not quite up to Ritz Carlton.

@LewisFriso Месяц назад

By virtue of discussing the situation in the aggregate, about 10x, I feel this gentleman needs to expand his vocabulary,

@itstheweather5859 26 дней назад

Why would Hyatt secretly sell their prestegious hotel in Lake Tahoe to Larry Elision and have a deal where Hyatt name is intact? I smell a shell game of them selling off all their prime hotels and keeping their names and then when only the low quaity hotels remain, they will pull the plug.

@lambertois11 4 дня назад

Hyatt, like Marriott and Hilton, want to transfer the real estate risk to the companies who will operate their franchised hotels !

@Gabriel-dn4gg Месяц назад

10:15 “They’re in the shelter business. We’re in the hospitality business.” Funny because every time I try to check in at one of your hotels I have to deal with a cranky crack head single mother who tries to get cute with me. Every time.

@byzameli Месяц назад

Isn't this like how Apple used Samsung components for the iPhone, and then Samsung became their rival? What stops MCR from making their own brand?

@zisun7483 Месяц назад

India is interested to buy those assets

@RiseUp_Again Месяц назад

Risk in this Strategy is Property Owners May Switch to Other Big Names offering Better Incentives

@tirystanzara8366 Месяц назад

If he says by virtue of one more time I might sell

@JamesMEsler Месяц назад

Excellent

@jaysoncagula6226 18 дней назад

Wow

@koshile3794 Месяц назад

Ziva.

@dazhill50 Месяц назад

This is a move to counter balance Airbnb, but also implement some of the core practices of Airbnb.

@phoenix5054 Месяц назад

You think hotels are losing to Airbnb? 😂

@PJVist Месяц назад

Aka we don’t want poor guests!

@02nupe Месяц назад

That part!

@VictoriaAlfredSmythe Месяц назад

@bl2125 8 дней назад

JB Pritzker is saving up cash for his presidential run 🤦🏻‍♂️

@_eaturveggies01 20 дней назад

3:26 “Motivated Seller” aka Broke MF or Going Broke 😂

@jessicaregina1956 Месяц назад

Because they are rebranding into Gyatt.😂

@Unreasonable1756 Месяц назад

Hyatt correctly sees that the middle class is dyeing the poor are poorer and the rich is becoming ungodly super rich.. So its selling off all its mid hotels in exchange for those extremely nice hotels that they can charge 10K a night to stay in.

@ParisLawLess Месяц назад

I'll buy that for a dollar 💵

@jorgegomez524 13 дней назад

We are in a bubble we better get out while we can, that’s what he doesn’t say saying it😂

@bash102 Месяц назад

Hmm always wonder when people sell at the bottom of the market, why not sell when in a few years when we’re back at a bull market with a strong economy

@1sweettime207 Месяц назад

Advertising!

@ElishaZakai Месяц назад

I love Hyatt, they are by far the best award program. I never pay for my stays there…

@learningearning8385 Месяц назад

Inflation and the dollar weakening but instead of holding real estate..you sell? you’re now selling service as a property management company but this is a big bet that companies would be able to afford your services. I guess they’re offloading old property.

@TeamTimeRiders Месяц назад

Yeah was really a shock to hear. This guy doesn’t look like he knows how to run a company at all. Like he brings in freshly graduate consultants who told him that selling his properties was the next big thing and he listened.

@Dakid015 14 дней назад

I wonder if this is part of the exposure to the struggling commercial real estate market? We know the CRE market is carrying higher interest debt and hasn't been performing. Maybe the CEO had properties exposed to this market and sees more clouds coming over CRE. So offloading while he could still get top dollar was the move? Could be wrong

@AcctistaZ Месяц назад

@user-vj4sn1hk3n Месяц назад

This trend has been seen for some years already the rich gets richer than the not rich haha.

@mack-uv6gn Месяц назад

Marriott does the same thing

@koolflows7581 Месяц назад

ouch

@danielgolarz674 Месяц назад

WSJ please talk about the out of control OCCUPATIONAL LICENSING for k-12 teachers that's why we have teacher shortages I'm the author of EIGHT DAYS IN AN INNER CITY SCHOOL

@felipeballadares8205 Месяц назад

YOU NEED TO OWN ASSETS.. OTHERWISE IT SOUNDS JUST LIKE A MIDDLEMAN

@OHANA-Beach-Suites-CDO Месяц назад

I'M A REGULAR GUY IN SEATTLE......BUILDING A BEACH HOTEL IN THE PHILIPPINES! DREAM'S COME TRUE EVERYONE!!!!!!!!

@braydenborbely 12 дней назад

This interviewer?? Did he just wake up?

@gibbonholder3274 Месяц назад

🎉 RAS HOUSE MUSIC 🎶 LABORIE BEACH ⛱️ ST LUCIA

@caribbeanradiology7004 Месяц назад

Hyatt downtown Atlanta is horrible.

@brucehicks5817 Месяц назад

Hyatt pulling a Four Seasons.

@khunopie9159 Месяц назад

Drinking game: "asset light"

@jutah Месяц назад

scrolling through the comments learning about hyatt and happening upon mr khunopie

@khunopie9159 Месяц назад

@@jutah I see you see me Jonny! 🍻

@hkmorhsi Месяц назад

Recession and bankruptcies.

@memonk11 Месяц назад

Yup, another company that will divest itself right into non-existence.

@OnlineVibes-bs9jn Месяц назад

Um no. You did this to get more cash flow to the PRIVATE EQUITY firm that owns the company! So many lies!

@macrosense Месяц назад

The Arabs. Taiwanese. Some Ukrainian oligarchs

@K4R3N Месяц назад

"People is our #1 cost." Get ready to be replaced by AI 🤖

@TheDavidlloydjones Месяц назад

The CEO of Hyatt Hotels is Mark Hoplamazian, not the "Mark Hole" that you throw on screen, Wall Street Journal. The most important words in any person's life are those that make up their own name, but the Journal's carelessness would be a gratuitous insult, both to Hoplamazion and to us, their audience, even if this were not so. Take it down and fix it, OK, folks?

@mimusic1853 Месяц назад

I’m sure whoever has the intent to reach this man to hire him away knows how to reach him. They aren’t coming to RU-vid in search of his contact information.

@jimgilmore5349 Месяц назад

Where did WSJ find this interviewer? What a sleepy head. I’ve seen better interviews conducted by high school students. Chat GPT could have done a better job. Probably a diversity hire.

@Dakid015 14 дней назад

Except he doesn't fit the diversity profile?? So not sure where you're going?

@08996688 Месяц назад

It’s a disaster waiting to happen. Trust me, people aren’t looking for that regardless of how much we make. Everyone wants a comfortable, clean, 3-4⭐️ hotel they can save money on.