|By Kathy Bergen, Chicago
TribuneMcClatchy-Tribune Regional News
Nov. 14, 2007 - A year after debuting the Hyatt Place brand for the young and the budget-minded, Chicago-based Global Hyatt Corp. is expanding its reach again, this time with a luxury boutique brand aimed at the young and the flush.
The hotel company run by the billionaire Pritzker family on Friday will unveil the conversion of the historic Great Eastern Hotel in London's financial district into its first "Andaz," an Urdu word meaning "personal style." Hyatt will dive into an escalating battle aimed at capturing emerging generations of affluent travelers, as well as youthful Boomers.
The strategy makes sense for Hyatt as it prepares for the possibility of becoming a publicly traded company, one observer said.
"It shows that they are a player on the new-product development side, that they are not just a historic, very traditional hotel company. ... It livens up the image," said Ted Mandigo, an Elmhurst-based hotel consultant.
Indeed, Hyatt is not the only hotel company going for fresh looks, as 34 brands were launched in the U.S. between 2005 and October 2007, the biggest brand surge in nearly two decades, according to PricewaterhouseCoopers LLP. The biggest segment was luxury, with 18 new brands from the likes of Marriott, with its Ritz-Carlton Reserve; Starwood, with its Baccarat and Le Crillon ; Hilton, with its Waldorf-Astoria Collection; and an array of lesser-known operators and independents.
"If you're a Millennial or younger Gen-Xer, and you're traveling in shorts, sneakers and a baseball cap, the trappings of a typical luxury hotel -- the mahogany panels, the Oriental rugs, the paintings of English hunting scenes -- are not all that welcome," said Bjorn Hanson, a hotel consultant with PricewaterhouseCoopers.
In their place, hotel developers are "taking the lobby and making it into more friendly communal space, providing seating areas, lounge areas and work areas ... so guests are not sitting in their rooms staring at the TV," said Mandigo. The new brands also are adding sophisticated exercise equipment, spa services, jogging maps and specially trained employees who can provide personalized attention.
The 236-room Andaz Liverpool Street London aims to provide "casual luxury" for sophisticated travelers in their late 20s to their 60s, the company said. The renovated lobby is designed to feel more like sleek modern living space, with no check-in counters or concierge desks. Greeters with hand-held computers act as personal hosts for weekday stays that start at 395 British pounds a night, which at current exchange rates translates to about $819. Weekend rates start at 120 pounds, or $248 at current exchange rates.
The room rate includes such perks as breakfast, Internet, local calls, water and juices, laundry and pressing, movies, and loaner iPods with locally selected playlists.
The lobby's living-room atmosphere, the personal hosts and the simplified pricing together "really make it as though you're walking into someone's home," said John Wallis, senior vice president of product and brand development for Global Hyatt, which together with JER Partners, a McLean, Va.-based private-equity firm, bought the Victorian property last year for an undisclosed price.
"What we're really trying to do is take all the stress of staying in a hotel out of it," he said.
The Andaz Liverpool Street London, which will have five restaurants and four bars, also will have an array of eco-friendly touches, including reduced water-use toilets, a computer-controlled boiler that cuts fuel use, eco-friendly printers, and organic, locally produced food and beverages, where possible.
Hyatt, which owns or operates more than 735 hotels and resorts in 44 countries, will continue the Andaz rollout in New York. Former JPMorgan Chase offices at 75 Wall Street will be converted to an Andaz in late 2008, and designer Tommy Hilfiger's former offices at 485 Fifth Ave., across from the New York Public Library, will become an Andaz in mid-2009. Prices will be in line with other five-star properties, said Wallis, which today would be in the range of $550 to $600 a night.
A new Andaz will be constructed in Austin, Texas, in 2010, and within five to 10 years, the company hopes to have 50 worldwide, including Chicago.
The brand launch "is a marketing challenge," said Mandigo. "There certainly are a lot of independent and boutique-y properties in Manhattan and London to compete against."
Hyatt and other major brands should have something of an edge because they already have reservation systems and loyalty programs, he said.
And the Internet has made hotel brand launches easier, said Hanson. Travelers can go online, look up a city, find its attractions and nearby lodging, "and maybe they find a new brand, and do a virtual tour of the property, and read guest comments," he said.
Global Hyatt has been preparing for the possibility of going public but has not yet committed. In late August, heirs to Wal-Mart's Walton family fortune and investment banking giant Goldman Sachs together invested $1 billion in the company.
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