Big news in hospitality: Hyatt to take over The Standard and Bunkhouse Hotels

Hyatt Hotels Corporation (NYSE: H) has announced its intent to acquire Standard International, the parent company of The Standard and Bunkhouse Hotels, marking a significant expansion in its lifestyle hospitality segment. This strategic move, anticipated to close later this year pending regulatory approvals, is set to amplify Hyatt’s footprint in the premium lifestyle market, further cementing its position as a leader in this sector.

Hyatt’s acquisition of Standard International will enhance its global lifestyle presence, reflecting the company’s aggressive expansion strategy. This deal will add 21 hotels to Hyatt’s portfolio, encompassing around 2,000 rooms across prominent locations such as The Standard, London, The Standard, High Line in New York City, and The Standard, Bangkok Mahanakhon. This acquisition represents a crucial part of Hyatt’s broader strategy to diversify its portfolio and capitalize on the growing demand for lifestyle-driven hospitality experiences.

Formation of New Lifestyle Group to Lead Expansion

Post-acquisition, Hyatt plans to establish a new lifestyle group based in New York City. This group will be led by Amar Lalvani, Executive Chairman of Standard International, who will assume the role of President & Creative Director of the new entity. The lifestyle group will benefit from Hyatt’s established global infrastructure and its World of Hyatt loyalty program, which boasts 48 million members. Lalvani, known for his transformative work with W Hotels and The Standard brand, will spearhead the integration of the acquired brands while maintaining their distinctive character and appeal.

Hyatt Hotels Corporation is set to acquire Standard International, expanding its lifestyle hospitality portfolio with iconic brands like The Standard and Bunkhouse Hotels. Photo courtesy of Business Wire.

Mark Hoplamazian, President and Chief Executive Officer of Hyatt Hotels Corporation, highlighted the significance of this acquisition. He lauded Standard International for its innovative approach and its ability to create properties that define trends and attract a sophisticated clientele. Hoplamazian emphasized that the integration of Standard International’s brands and talent will enhance Hyatt’s offerings and extend its reach in the lifestyle sector.

Strategic Synergies and Brand Integration

The acquisition will also include Standard International’s other ventures such as Peri Hotels, The StandardX (recently launched in Melbourne), and The Manner (set to debut in Soho, New York). Additionally, Standard International’s renowned restaurant and nightlife concepts, including The Boom Boom Room, The Standard Grill, and Café Standard, will become part of Hyatt’s portfolio. This diverse range of properties and concepts will be incorporated into Hyatt’s loyalty program, enhancing the benefits available to its members and reinforcing the company’s commitment to providing exceptional lifestyle experiences.

Financial Overview and Future Prospects

Hyatt will pay a base purchase price of $150 million for Standard International, with potential additional payments up to $185 million based on the performance of the acquired properties. The deal is expected to generate stabilized fees of approximately $17 million, with the possibility of up to $30 million in additional fees depending on the full realization of the acquisition’s potential.

In a related development, Hyatt recently concluded the sale of the Hyatt Regency Orlando for approximately $1.07 billion. This high-profile transaction, involving the sale of the 1,641-room hotel and adjacent land to affiliates of RIDA Development Corporation and an Ares Management Real Estate fund, aligns with Hyatt’s capital allocation strategy. Despite this sale, Hyatt will retain long-term management of the property and maintain a significant financial interest in the adjacent land.

Insight on Lifestyle Hospitality Trends

The acquisition of Standard International aligns with a broader trend in the hospitality industry, where established hotel chains are increasingly investing in lifestyle brands to capture a growing segment of discerning travelers seeking unique and immersive experiences. According to industry analysts, the global lifestyle hotel market is expected to continue its robust growth, driven by increasing consumer preferences for personalized and experience-oriented travel.

Amar Lalvani’s leadership in transforming lifestyle hospitality through innovative design and experiential programming has set new standards in the industry. His vision for the new lifestyle group at Hyatt is anticipated to drive further growth and enhance the overall guest experience, positioning Hyatt at the forefront of this evolving market.