The chain plans to nearly double its hotel presence in Latin America, spearheaded by the Hyatt Place brand for business travelers. Where will the expansion take place
Over the next few years, the two focal points for expansion of the Hyatt hotel chain will be Latin America and Asia. This was reported to Latin Business Chronicle by Hyatt Latin America's regional director, Álvaro Valeriani, at his office in Mexico City.
Hyatt plans to open 14 new hotels in Latin America in the next few years, for a total of 22. “We don't want to be the largest chain, just the one preferred by travelers, investors and partners,” he explained.
In mid-November, Hyatt announced the opening of the Hyatt San Jose/Pinares, the first Hyatt-branded hotel in Costa Rica and the first Hyatt Place to open outside the United States. Hyatt Place was launched in 2006 with a special focus on business travelers.
The company has also announced other Hyatt Place openings in the region in 2013: in Santiago/Vitacura in Chile, Panama City/Downtown Panama and in San Jose del Cabo in Mexico. An additional hotel, Hyatt Place Tijuana in Mexico, is expected to open in 2014, with the first Hyatt opening in Montevideo in 2015.
The introduction of Hyatt Place to Latin America has a well-defined geographic focus. “It has great business potential in secondary cities,” explained Álvaro Valeriani.
The current list of Hyatt projects is the longest ever. It includes the development of 175 properties with 39,000 rooms. Seventy-five percent of future expansion is expected to occur outside the United States, including entry into new markets or markets in which Hyatt has a small market share. This is a significant move, given that more than 70 percent of the hotel's income stems from operations within the United States.
This list includes a Grand Hyatt hotel in Bogota, another in Cartagena, six hotels in Mexico and four in Costa Rica, among others.
But will the increased number of hotels planned by Hyatt and its competitors exceed demand? “This is the question that all of us in the industry ask ourselves every morning when we get up,” said Álvaro Valeriani.
However, he is unconcerned because he sees relatively clear areas for expansion. There are many places with potential, with an obvious shortage of hotels, he states. It isn't a matter of small cities. There are a lot of large urban areas. Rio de Janeiro, for example, is a very well-positioned city where you would think there would be no shortage of rooms. The hotels, however, have very high occupancy and there are not enough of them to handle the volume of visitors, said the executive. Because of this and other circumstances, the chain plans to open a Hyatt in Rio in 2015.
In Mexico City, occupancy is always high and some weeks it is not at all easy to find a hotel, says Alvaro Valeriani.
Hyatt's other focal point for expansion is Asia. This year, it has announced openings in Bangkok, Manila, Colombo, Quingdao (China) and Chennai (India), among others.
The Hyatt chain (H:US) based in Chicago, has a market capitalization of US$6 billion, and operates the Hyatt, Park Hyatt, Andaz, Grand Hyatt, Hyatt Regency, Hyatt Place and Hyatt House brands with nearly 500 properties in 45 countries.