Less than a half of Europe's hotel rooms are affiliated with an international brand. Hyatt sees that figure as one of the region’s biggest untapped growth opportunity and is using the new Hyatt Regency London Olympia as one example demonstrating how the company plans to capitalise on said opportunity.
Opened just this week, the 204-room hotel occupies a restored 1937 Art Deco building and is Hyatt’s fifth Regency in London. Taking pride of place slap bang in front of a station expected to bring in the crowds following Olympia's £1.3 billion regeneration, the hotel is positioned as an integral part of Olympia's reinvention, which will also include exhibition space, an international convention centre, theatres, live music venues, restaurants and offices to form a mixed-use ecosystem.
Speaking with Hospitality Investor at an exclusive event ahead of the opening, Hyatt Regency London Olympia’s general manager Georges Moura said: “We are not only a hotel next to an exhibition centre. We are part of the creation of this new destination.”
Looking at it through a wider lens, Marc Jacheet, Hyatt's Group President for Europe, Africa and the Middle East said the hotel encapsulates the company's next phase of growth which will see selective expansion into strategically important markets, stronger brand positioning and developments in mixed-use destinations, particularly as business and leisure travel continue to overlap.
All about the brands
He stressed that instead of chasing scale in its European expansion journey, Hyatt’s focus will be ensuring the presence of the right brands in the right location to create long term value for both owners and guests.
“We're not looking for mass or scale. What we want is having projects that are relevant to the markets and to guest expectations. The right place, the right timing and the right guest profile are the factors that determine investment decision,” Jacheet said sitting in the hotel selected because it sits within one of the capital's largest regeneration schemes, where Hyatt expects demand to come from a blend of exhibitions, conferences, concerts, theatre and leisure travellers.
Jacheet, who joined Hyatt after senior leadership roles at luxury companies including Louis Vuitton, Tiffany & Co. and Moët Hennessy, believes hospitality is undergoing a transformation similar to that experienced by luxury retail.
“The big transformation that is ahead of us is about brands. Brands create value because they signify quality. They create reassurance, desirability and preference.”
Loyalty as infrastructure
This is as industry research shows that Europe still has a substantial proportion of independently operated hotels compared to regions such as North America. Jacheet says this creates significant opportunities for conversions and brand affiliations as owners seek stronger distribution, marketing reach and access to loyalty programmes. And part of Hyatt’s strategy is its World of Hyatt loyalty programme which now has round 66 million members globally, with roughly half of Hyatt's occupied rooms worldwide reportedly booked by loyalty members.
Stressing that owners are seeking for value that international brands and loyalty ecosystems can bring in the form of reduced customer acquisition costs, increased direct bookings etc as competition continues to increase in the hotel market, Jacheet says Hyatt’s loyalty network is expected to be a major source of demand for Hyatt Regency London Olympia, adding the hotel is expected to benefit from visitors from the US, Germany, the UK and the Middle East.
More bullets in the chamber
Another one of Hyatt’s strategies exemplified by the new opening is the expansion of its classic and select-service brands including Hyatt Regency, Grand Hyatt and Hyatt Centric, across major outbound feeder markets, being countries that generate significant international travel demand. Jacheet identified the UK as one of Hyatt's three most important feeder markets globally alongside Germany and Spain, making further expansion in both London and regional UK cities a strategic priority. He stresses that London remains one of the world's most important gateways for international travel, while the UK is one of Hyatt's three most important outbound markets globally.
“The UK is of strategic importance. British travellers are of strategic importance for the group in Europe, the Middle East and for the world,” he notes.
Another bullet in the chamber is Hyatt’s focus on luxury and lifestyle brands in leading leisure destinations. The company has accelerated growth across brands such as Park Hyatt, Andaz, Thompson and Alila, opening new properties in destinations including Lisbon and Seville while continuing to identify opportunities across Europe's most sought-after leisure markets.
Next is strengthening its position in the all-inclusive space and lifestyle, exemplified through its acquisitions of Apple Leisure Group and Standard International.
“What we observe is clearly an appetite for all-inclusive and clearly an appetite for premiumisation of all-inclusive," Jacheet said, noting that travellers value the convenience, predictability and experience-led nature of higher-end all-inclusive holidays.
Rather than viewing all-inclusive as a budget proposition, Hyatt sees growing demand for premium products that combine high-quality food and beverage offerings with curated local experiences beyond the hotel itself.
Confidence despite uncertainty
Despite ongoing geopolitical tensions, economic volatility and recent disruptions to international travel, Jacheet remains optimistic about demand for premium hospitality. Rather than seeing uncertainty suppress luxury travel, he believes consumers are prioritising experiences over material possessions.
At Olympia, the recently opened 4,000-capacity live music venue, operated by AEG Presents, has already begun hosting performances while the new theatre - operated in partnership with Trafalgar Entertainment and The Shubert Organization - is expected to open next year. More than 20 restaurants, bars and leisure concepts are also being introduced across the estate alongside the expanded exhibition facilities and international convention centre. As activity in Olympia continues to ramp up, Jacheet stresses that rather than seeing the hotel as another addition to its London portfolio, Hyatt sees the property as helping to establish a new destination where exhibitions & conventions, live entertainment, dining, hotels and hospitality reinforce one another to create a more resilient, year-round demand base.