Rob Schnitz, SVP and associate general counsel at Hyatt Hotels Corporation, talks about the lessons his company has learned from its acquisition of Two Roads Hospitality, its wellness initiatives and years of operation.
HOUSTON—When Hyatt Hotels Corporation acquired Two Roads Hospitality in November 2018 for $480 million, it was by no means the largest transaction in the world, said Rob Schnitz, SVP and associate general counsel at Hyatt. It was, however, a “huge acquisition” for Hyatt given Two Road’s size, complexity and overall value.
“We fit together really well,” he said. “It’s really been kind of amazing from what we thought would happen and what has happened in terms of what a good fit our companies have been culturally speaking.”
During the acquisition process, it was an “all hands on deck” situation, Schnitz said. It was a large transaction with a lot of complexity to it, especially since Two Roads had added several different brands over the years and there were many different existing management agreements, he said.
“It took a long time to digest,” he said. “We’re still digesting what we really have.”
The acquisition itself was like taking on a second job, he said, adding that Hyatt had to change some people’s job responsibilities to accommodate the transaction.
Though it required a great deal of work, when the deal was announced, it created a lot of excitement within Hyatt, he said, for employees, owners and guests.
Hyatt has things mapped out through the end of this year, but there will certainly be issues beyond that, Schnitz said. It has a general plan, but with something of this size, there’s still much they don’t know yet. The difficult part is trying to get everything moving in one direction, but with four new and different brands with different approaches, it will take a while to sort things out, he said.
The approach for integrating Two Roads’ brands is “not to mess things up,” he said. The company is doing well, and hotel owners under its brands were generally happy with them. Some of these properties are complex, and the leadership at Two Roads devoted a lot of time to them, he said.
Hyatt is still learning about the Two Roads brands, he said. The challenge is that there are essentially four separately run companies that were only recently brought together under Two Roads, and Hyatt itself isn’t the most centralized company of the world, he said.
Many of these hotels are more boutique-type properties, and some owners are skeptical about being part of a larger company, he said.
“The owners that are still looking for individual treatment for the unique property that they own—that is really testing our limits” he said. “We thought of ourselves as a company that was really good at that. Two Roads, that’s what they’re all about. I think that’s part of the value of why we wanted to buy into that.”
Wellness at Hyatt
Wellness has been a theme that Hyatt has jumped into with both feet, Schnitz said. It’s a clear part of the company’s strategy, he said, citing the company’s purchase of the Miraval resort brand.
“That’s a brand we hope to expand further and find ways to incorporate,” he said. “They understand mindfulness and wellness.”
Hyatt also purchased Exhale Spas because it fit into Hyatt’s vision for wellness and could help it learn more, he said.
“We’re trying not to just think about mindfulness or wellness in the spa or retreat experience but something to address for the everyday traveler,” he said.
This mindset has also influenced internal operations at Hyatt, Schnitz said. The company’s law department looks to hire service-oriented attorneys and those who are practical and can think on their feet, he said. The average tenure of attorneys who report to him is seven years, he said. Part of that is the industry itself, he said, adding that Hyatt itself is a great place to work. One example of the company’s strong culture is a recent shift to what Schnitz calls alternative work schedules.
“It should just be the norm to adapt to different people’s needs,” he said. “It’s something we don’t even think about as unusual. It’s more about how do you flex and change. You get so much value out of people if you are able to adapt to those things. I think that’s been very appealing to people. We don’t recruit on that basis necessarily, but people see it when they come to us.”
One such example is that Hyatt has created an expectation that when someone becomes a parent—as a mother or father—they should take time off to be with their family, he said.
“That’s good for the family, good for the spouse and good for the company,” he said.
Leading the legal department
Hyatt was formerly two companies: one international and the other focusing on North America, Schnitz said. At that point, the company was privately held and had nine lawyers on staff, he said. Once the company went public in 2009, it needed to increase its legal oversight and now has 38 on staff around the world. Most of its international legal staff members are focused on transactions. In the Chicago office, he oversees the operations team that also handles commercial services, distribution, marketing, sales and transactions.
The company has changed since he began working at Hyatt 18 years ago, he said. One of the more recent changes in the company has been shifting to a 24/7 mindset at its corporate headquarters, with expectations shifting along with advances in technology and social media.
“We are expected to be as responsive as our hotels are to our guests, and frankly I think that is real a challenge for our lawyers,” he said. “Speed is not always a lawyer’s best friend, and by the way, it’s not always your client’s best friend because you often can be forced into a bad decision or not as well thought out (decision).”
The relationship with outside counsel is vital to any company, Schnitz said. That was true when Hyatt had nine lawyers, and he doesn’t believe the company has leaned any heavier on outside counsel than it does now.
“Your goal is that outside counsel becomes like your partner,” he said.
Trust has to come from both sides of that relationship, he said. He appreciates it when outside counsel asks him questions to make sure they fully understand an issue and when the two teams can challenge each other.