Hyatt profits fall 20 percent amid low group bookings

Discussion in 'Hyatt | Gold Passport' started by uggboy, May 2, 2013.  |  Print Topic

  1. uggboy
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    uggboy Gold Member

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    || Hyatt profits fall 20 percent amid low group bookings ||

    Interesting insights.
     
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  2. lsed

    lsed Silver Member

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    That's sad to hear because I love this brand.
    However some of the Hyatts I've stayed in in the US are really not up to par.

    My opinion is that Hyatt needs to open more hotels outside of the US. There are many emerging markets that Hyatt is being left behind. Look at how aggressive Accor is for example.

    I have a friend that has a hotel under construction in Jakarta. And initially I was puzzled why he chose Accor to manage his property. But after hearing the terms of the contract, it was a no brainer.

    I love Hyatt but there needs to be more properties around the world- not just the high end Hyatts (some of which I sincerely love) but catering to a broader range of demographic.
     
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  3. uggboy
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    uggboy Gold Member

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    Thanks for your insights, IMHO there should be also a new mid-tier in the Gold Passport program, between Platinum and Diamond, something is missing here, the gap is too big. Regarding expansion, yes, Hyatt needs to expand in new markets incl. major European, Asian, African cities with a diverse brand offering at different price points.
     
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  4. lsed

    lsed Silver Member

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    That's true. I also feel that non-US Diamond members have a really hard time retaining the status. I have half the mind that Hyatt Place or anything rate below $120 USD should only count as a half stay or half night.
    Also, reward nights should count towards requalification and Cat 1 - 3 should count as a half credit, and 4 - 6 as one credit.


    And while we're at it, another tier between D and C =)
     
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  5. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    Their issue here is that traffic from tour groups has decreased for existing hotels. If the focus is to increase traffic from tour groups / operators, we should be looking at where Hyatt has missed with this customer segment. Adding hotels internationally and making changes to the GP program are not going to solve this problem.

    By focusing on the tour group segment, we should be looking at factors like availability of large room blocks, rates for tour groups in comparison vs what the competition has, marketing to tour groups, etc. My guess is that a focus on garnering a greater amount of traffic from business travelers has taken some emphasis away from targeting tour groups / operators.
     
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  6. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    The best way to fix this issue is with an immediate six month FFN promo.
     
  7. marcwint55

    marcwint55 Gold Member

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  8. marcwint55

    marcwint55 Gold Member

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    What do you recommend between the two. Platinum is only ten stays and diamond is only 25 stays, is it really worth it to have another tier for 15 or 20 stays?
     
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  9. HaveMilesWillTravel
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    Plat is five stays.

    http://www.hyatt.com/gp/en/benefits/membership_platinum.jsp

    Or MilePoint Premium membership. Or UA Club card membership.
     
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  10. uggboy
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    I would recommend an extra tier at 16 stays, why? Because unlike US based loyalty members it is simply too hard at times for someone who's based in Europe to keep top status with Hyatt and there's the psychological component of reaching the next tier faster than having to slog it to 25 stays. In Europe there aren't many more affordable Hyatt's and there aren't CC's on offer. So it's really head in beds as they say.

    Indeed, PLT is 5 stays / NOT 10 stays / and Diamond is 25 stays, the GAP between them, 20 stays is simply unsustainable from my point of view, we like Hyatt, but would stay with them more often when A). there would be a second tier like after 15 or 16 stays, which comes with real benefits and B.) Hyatt would offer some brand / price point variations in Europe too. At the moment many who are based in Europe are making the choice to go with Hilton, Carlson or SPG it's simply a matter of affordability to reach status and a matter of location / choice right now. Hyatt has here a unique opportunity to catch up. [ Let's hope that someone from Hyatt reads this ]
     
  11. uggboy
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    uggboy Gold Member

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    We all know that Penny Pritzker and her clan have "special" connections. IMHO, politics and business are somewhat too near to each other.
     
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  12. MSPeconomist
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    It's hard for Hyatt to compete with chains that have much bigger footprints.
     
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  13. uggboy
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    This shouldn't keep them to add another tier, after 15 or 16 stays to their loyalty program in the future.
     
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  14. RestlessLocationSyndrome
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    Whether I agree or disagree with adding a new tier between Plat & Diamond doesn't matter. How does adding this tier generate more tour group / operator business? Do we believe that the Gold Passport program is the reason why revenue from tour groups was down?
     
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  15. uggboy
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    uggboy Gold Member

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    The problem is that Hyatt's are usually too expensive, beside "luxury" tour groups, it's unlikely that I go and visit my local travel agent, ask for tours that they offer something which includes some nights at Hyatt hotels, why? as said, mostly too expensive, too few properties and no price point diversification. Meaning Hyatt does loose out to their competitors in this market niche.

    Regarding a new tier, while nothing to do with tours / groups etc. such a tier is still missing, especially with a gap between 5 and 25 stays, surely a new tier @ 15 stays / incl. new "real" benefits / unlike PLT / would drive more people towards Hyatt, it's all about reaching Status and depending where people are based that's what matters most, especially when CC's aren't an option and head on pillows really count. Here Hyatt could garner new business.

    [ Just as a side note, the CC game is going too far anyway IMHO, it's time that hotel chains look after guests who fill up rooms and not just paying a fee for a CC and getting benefits, I only wonder what hotels earn or how real guest subsidize such CC deals? ]
     
  16. cova

    cova Gold Member

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    Isn't the earning ability already revenue based - so the lower points for Hyatt Place is already in place. Say a Hyatt Place is $100, and a Grand Hyatt is $200 per night - you already have the difference. Plus rewards are tiered as well.

    Marriott is 10/50/75 nights for status level (nights not stays) but many here move every night. Big difference between 10 and 50 nights at Marriott low to mid-tier. The 50 and 75 night levels give you lounge access.
     
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  17. MSPeconomist
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    The lack of a middle tier perhaps seems especially striking given that Hyatt recently eliminated the special benefits for Plats with various numbers of nights/stays, such as executive lounge level room upgrades for a few stays.

    The small footprint has noting to do with the number of elite tiers, but it could have a lot to do with Hyatt's inability to attract group bookings.

    I also wonder whether some Hyatt properties are ineffective at revenue management. For example, I notice that many Hyatts seem to have less flexible pricing policies than other chains. For example, at some Hyatt properties, weekend rates only apply to Friday and Saturday nights, while Sunday nights are never discounted, regardless of how low their occupancy is on a day that is traditionally regarded as very slow at USA hotels and that doesn't tend to attract many business travelers. Something else that I've noticed is Hyatt Place airport hotels that offer airport parking packages, but price them double what their competitors of the same quality and location charge (a difference of over $100). It's hard to rationalize these practices and they surely cost these hotels a number of room nights.
     
  18. HaveMilesWillTravel
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    But the comment was about the difficulty/cost to acquire status in Europe compared to the US. If I had to guess, there are probably more Hyatts in the Bay Area than in all of Europe (ok, I guess they just got a few more in France if I recall correctly), and we have places like the Hyatt Place Fremont wit $75 weekend rates if one needed to top off.
     
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  19. cova

    cova Gold Member

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    But the second sentence was:
    "Also, reward nights should count towards requalification and Cat 1 - 3 should count as a half credit, and 4 - 6 as one credit."

    I think the overall net of this is that smaller groups are more price sensitive.
     
  20. HaveMilesWillTravel
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    I interpreted that as stay credit (for qualification). The point earnings, as you said, are revenue based, but a cat1 Hyatt Place night counts the same as a night at a $600 Park Hyatt when it comes to status qualification.
     
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  21. RestlessLocationSyndrome
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    I would agree that tour groups / operators are quite price sensitive and that they would be unlikely to select any Grand Hyatt property. At the same time, I do tend to see tour buses frequently at Hiltons, and Marriotts. Doesn't the Hyatt Regency brand effectively play at this same level / price point?

    If the price point needs to be lower, isn't Hyatt Place a legitimate offering for tour groups / operators or do they need full service?

    This is something that I wonder as well. It seems like Hyatt Place would be a natural offering for tour groups. They are fairly nice as many of my consulting colleagues feel that they are best of the equivalent across the other big brands. In addition, they do include free breakfast which although not large, sufficiently covers most of my breakfast requirements. Perhaps revenue management is not pushing Hyatt Place product in lieu of conference traffic to the full service Hyatt's.
     
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  22. HaveMilesWillTravel
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    I suspect they are probably too small. Can you imagine a tour bus or two crowding into the breakfast area of a Hyatt Place at 8am? It's bad enough when a youth soccer team takes over the property's common areas on a weekend day.
     
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  23. MSPeconomist
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    The category of groups is pretty varied with different purposes and requirements. There's a tradeoff in some situations in that the presence of certain groups would be off-putting for business travelers and other market segments. Few people like to stay in a hotel that is being over-run by folks on a cheap package bus tour or youth athletic team that is not being properly supervised by a few drunk and irresponsible chaperones.
     
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