Hyatt isn’t done expanding into Europe.
The Chicago-based hotel conglomerate’s $2.7 billion acquisition of Apple Leisure Group might have seemed like a play for all-inclusive resorts, but the acquisition boosted Hyatt’s European footprint by 60%. However, Hyatt’s appetite for Europe has not been satisfied there: on Thursday, the company announced a strategic partnership with the German hotel company Lindner Hotels AG.
While the Lindner deal is not an acquisition like ALG’s move last November, the new partnership means that more than 30 hotels in seven European countries will join the Hyatt brand portfolio and become part of the World of Hyatt. Most of Lindner’s properties are expected to transition to the JdV by Hyatt brand, which is a collection of independent hotels that offer a more distinctive flavor than, say, an independent Hyatt Regency.
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“The addition of Lindner’s desirable portfolio of hotels will substantially increase the presence of the Hyatt brand in Germany and bring our guests and ultimately our World of Hyatt members to a variety of new destinations across Europe, including Kiel, Leipzig, Sylt, Bratislava and Interlaken,” said Hyatt CEO Mark. Hoplamazian said in a statement. “We are grateful for the trust the Lindner team is placing in us and are excited to strengthen our collective guest offering through the strategic capital investments Lindner is making in the portfolio.”
A Hyatt spokesman declined to provide financial details of the partnership or whether, given the rebranding, the partnership was just a springboard for an eventual acquisition.
While not an acquisition, the Hyatt-Lindner partnership plays into the hotel industry’s growing ideology that major hotel companies are likely to grow with “add-on” or “embedded” deals that fill in geographic or brand blanks. In the past, Marriott has achieved one such agreement in Europe with AC Hotels; the deal gave Marriott a geographic boost before the US company heavily expanded the brand around the world.
Lindner may not be a household name in the US, but Hyatt described the deal as one that gives it a boost in the lifestyle hotel segment. Lifestyle hotels often put more emphasis on food and drink, as well as design. The JdV by Hyatt brand, under which many of the Lindner hotels will be included, bills itself as a “collection of original hotels with a deep respect for the neighborhoods that make up each destination.”
Lindner’s website, however, shows a portfolio of hotels that appear to go beyond the lifestyle hotel segment. A mix of airport and business travel hotels, as well as more leisure-oriented hotels, fall under the Lindner umbrella, according to the company’s website. The company operates two brands: Lindner Hotels & Resorts and Me and All Hotels.
There is no public knowledge of which hotels would specifically switch to the JdV brand under the deal, but the new partners touted the joint benefit of working together. While Hyatt gets a bigger presence in Europe, Lindner gets better global support and brand recognition.
“This type of collaboration is truly unique in the German market,” Lindner CEO Arno Schwalie said in a statement. “As part of the JdV by Hyatt brand, Lindner remains a strong brand with its own corporate identity and independence, now underpinned by the power of Hyatt’s global brand awareness and world-class sales and marketing capabilities.”
Hyatt’s attention to Europe during the pandemic was initially curious, as most of its competitors continued to focus on China. Europe was expected by many to be the last geographic region to recover from the coronavirus pandemic due to an increased reliance on international tourism.
Instead, the European strategy seems to be the smart one. China’s reopening plans for international travel remain uncertain, with strict lockdowns continuing to emerge in certain cities that see new spikes in cases. Europe, on the other hand, seems to be booming on the hotel front despite the geopolitical tension during the Ukraine invasion.
European hotel performance was up 14% from 2019 levels at the end of last month, compared to a 22% decline seen in China, according to STR.