Hyatt an outlier with sharing-economy strategy
16 DECEMBER 2015 6:45 AM
Hyatt Hotels Corporation is swimming against the current with its investment in sharing-economy platform Onefinestay. The hotel chain’s CEO hopes to learn more about his guests in the process.
CHICAGO—While most public hotel companies have observed the sharing economy from afar, Hyatt Hotels Corporation has dived in headfirst with an investment in Onefinestay, which specializes in curated, high-end home rentals in major gateway markets New York City, London, Los Angeles and Paris.
The undisclosed investment was part of a nearly $40-million fundraising round completed at the end of 2014. Representatives from Hyatt and privately held Onefinestay declined to comment for this report.
It was bred of a desire to learn more about what he called a “broad consumer issue and the consumer behavioral change.”
“We've always been drawn towards it, not sort of away from it, because we feel like we need to learn from what we're seeing evolve in the market and how consumers think and how they behave,” Hoplamazian said.
The best way to learn was to put some skin in the game, he explained.
“In the case of the Onefinestay investment and some of the activities we've had with them, it's really been experimenting with, how we could potentially extend the brand experience for Hyatt customers and also understand how we may be able to interface with and help support different kinds of stay occasions outside of our hotels,” he said.
Hyatt quietly has tested a pilot program at its Hyatt Regency London – The Churchill, whereby Onefinestay guests flying to London on a red eye can store their bags and/or use a guestroom until their home rental is available for check-in.
Hoplamazian said the experience thus far has been “really valuable and very rich.”
Founded in 2009 with its headquarters in London, Onefinestay manages a portfolio of more than 2,500 homes, according to reports. Hyatt had 627 hotels with 161,796 rooms in its portfolio as of 30 September 2015.
A new distribution platform?
Will Hyatt ever distribute its rooms on Onefinestay or other sharing-economy platforms such as Airbnb?
“It's a complicated topic, because, frankly, Airbnb is not in the business of representing hotel rooms on its platform,” the CEO said.
When pressed by an analyst to elaborate, Hoplamazian listed a few hurdles: “What's the interface with our guests, and what's their interaction with our brand and who we are versus someone else's brand and who they are? So that's one key consideration. How our inventory would be represented is another key consideration.”
Business vs leisure
Hoplamazian said a traveler’s “purpose of visit” is another key distinguishing factor.
“We are hyper-vigilant on paying attention to how people are traveling and what their purpose of visit is, and how that segregates or sub-segments and what kinds of choices they make when they're traveling,” he said.
Choosing a booking platform—be it Onefinestay or Hyatt.com is one of those choices—and one Hoplamazian and his executive team hope to better understand through the company’s investment, he said.
At present, the sharing economy skews more toward leisure travelers, although some platforms are making a concerted effort to cast a wider net. Hoplamazian pointed to Airbnb’s partnership with credit card provider American Express designed to make business travel bookings more seamless as one such example.
“The lines are blurring, and there's a lot of cross-channel distribution going on. And I think we're only seeing the beginning of that; I think this will grow in incidence and complexity over time,” Hoplamazian said.
But Hoplamazian said hotels will always offer a unique proposition for guests.
“There are just some inherent differences in what they can offer and what hotels (can) offer,” he said, “and I think those differences are really, really material and substantive in terms of stay experience for business travelers.”