Future Strategic Directions for Hyatt GroupIntroductionHyatt Group is $5 billion a year global chain of hotels known for its quality, flashy styles, and atrium lobbies. Despite being amongst the best hotel groups in the world, the group has actually never kept a pace with its competitors. Even when the tourism sector had been growing by leaps and bounds, the company had preferred to keep a low profile. At a time when competitor hotel giants like Hilton and Marriot added hundred of hotels to their groups, Hyatt group have contended themselves by adding one to two at a time to their 200 hotel group.
The group’s spokesperson once quoted that we have never been able to keep pace with our competitors and strategy has never been our strong point. DiscussionAfter the death of the mastermind of the family fortune- Jay Pritzker, Tom Pritzker and his two cousins Penny and Nick shouldered the responsibility of taking the family legacy forward. But soon, in 2000, the clan began to squabble and Tom was given an ultimatum by his brother and cousins to restructure the holdings.
The group lead under the leadership of Tom Pritzker plans to distribute the assets by 2011.Till the time Jay Pritzker was alive, the company ran with his philosophy that the Pritzker should not receive more than they had contributed to the society. Being a part of the competition was never his strategy. But, under the leadership of Tom Pritzker, the company’s vision changed. Tom started looking at expansion plans and Hyatt group was his first priority. Now the times have changed and the company is on a rapid expansion spree. Breaking silence, the President of the Hyatt group Tom Pritzker announced their fast paced global expansion plans.
The group has 29 hotels currently under development and has recently acquired Ameri Suites, a 146 hotel chain, surprising its competitors and even the wall street journal. The Hyatt group now plans to expand its horizon and give a global competition to its rivals. With the world wide boom in tourism industry it is not strange for a group like Hyatt to get into expansion mode. According to Steven Kent, a Lodging analyst at Goldman Sachs, “These days it seems like a hotel can charge almost whatever they want for a room”.
When the demand is increasing and people are ready to pay anything for a quality accommodation, it is but natural for a global player like Hyatt to plan expansion. With strategy never being a plus point for Hyatt, the group has to be very careful with the expansion plans and strategies. Especially, when the competition is high and there are already so many competitors who have their feet established in the market. The group always had been operated under decentralized control wherein for every hotel people come up with new and innovative ideas and implement them.
This strategy has been group’s greatest asset as well biggest liability. Decentralized control has enabled the group to have innovative concepts for the hotels. The Hyatt groups of hotels are particularly famous for themed restaurants in place of traditional coffee shops. On the other hand decentralized control has led to inconsistency in the hotels design and management.