Dive Brief:
- Hyatt Hotels Corporation announced yesterday it has executed franchise agreements for the first locations of its Hyatt Studios brand, the company’s first upper midscale extended stay brand in the Americas, which launched in April. The hotels will be located in Mobile, Alabama, and Marysville, California, two markets where Hyatt has not yet established a brand presence, a company release detailed.
- Company veteran Jason Ballard was promoted to head of operations for Hyatt Studios, Hyatt also announced. Ballard, most recently Hyatt's vice president of franchise operations for the select service category, will report to Hyatt Studios lead Dan Hansen. The company also hired new leadership for finance and commercial services roles for Hyatt Studios.
- The expansion of the Hyatt Studios brand will grow Hyatt’s reach not only in new untapped markets, but also within the upper midscale segment and extended stay space.
Dive Insight:
Hyatt is launching Hyatt Studios in locations where its presence is currently limited, such as suburban, interstate and small-town markets, Hansen told Hotel Dive. He added that the brand’s operating model was designed to adapt to developer needs and to the markets and demographics they operate in across primary, secondary and tertiary markets.
“By enabling guests to choose a Hyatt hotel in new markets, we grow brand loyalty without intra-brand competition and present more white-space options to developers,” Hansen said in a statement, adding that Hyatt guests often stay with competing brands because there is not a Hyatt hotel within 5 miles of their destination.
According to Hansen, the Mobile and Marysville markets are well-suited for Hyatt Studios hotels because they match the intended guest profile and their “competitive landscapes” exhibit strong performance metrics that align with the brand’s expansion strategy.
The inaugural Hyatt Studios hotel in Mobile, to be developed by 3H Group Inc., is expected to open late next year. The Marysville property, developed by Presidio Hotel Development LLC, will follow, opening in 2025. There are currently signed letters of interest for more than 100 Hyatt Studios hotels.
With the new hotels, Hyatt strengthens its position within the upper midscale and extended stay spaces, both of which have seen heightened development activity in the first half of this year.
According to Lodging Econometrics’ Q2 2023 U.S. Construction Pipeline Trend Report, new construction projects in the upper midscale and upscale segments dominated the U.S. hotel construction pipeline in the second quarter, accounting for 62% of all projects in the pipeline.
The report also found that extended stay development increased in Q2, the eighth consecutive quarter of growth for the product type.
Other hotel companies to expand in the extended stay space of late include Choice Hotels International, which ramped up development of its WoodSpring Suites brand in Q2. Also in the second quarter, Marriott International and Hilton launched extended stay brands in the U.S. midscale and lower midscale segments, respectively. And in July, Wyndham added 60 hotels to its Echo Suites pipeline, including in Alabama, Iowa, Nebraska and South Dakota.