Hyatt Regency Aims to Revitalize North America Portfolio with $1.3B Investment
- Jul 29, 2008
Dozens of Hyatt Regency properties in key business, convention and resort locations in North America are undergoing renovation or being opened as part of a $1.3 billion dollar investment. Seventeen such properties have been renovated or opened in the past three years and 31 additional hotels are scheduled to be revamped or to open by the end of 2010. The renovations entail remaking dining and public spaces, upgrading technology, adding distinctive amenities and updating design. Major completed projects include the first phase of a $60 million transformation of Hyatt Regency O’Hare in Chicago and a $20 million makeover of Hyatt Regency Aruba Resort & Casino. “Since beginning this effort three years ago, we have seen a steady increase in guest satisfaction and revenue. We are making major investments to reclaim the reputation for stylish design and innovation that are the Hyatt DNA,” said John Wallis, Hyatt senior vice president, product and brand development, in a statement. “We have done so much more than renovate; we are reinvigorating Hyatt Regency in North America. The scope of the changes and improvements at many properties has been so comprehensive that the hotels are positioned to compete for new types of business.” The return on investment by the revitalized Hyatt Regency hotels is demonstrated by, on average, a 15 percent increase in RevPAR and a 15 percent increase in top box scores on the guest satisfaction surveys conducted by hotels. Hyatt has focused on upgrading aspects of the hotel experience of particular interest to individual and group business travelers. The new and renovated properties feature amenities and facilities that make it easy for travelers to balance productivity and relaxation on the road. When reached today by CPN, Bob Patten, vice president of capital planning for Hyatt Hotels & Resorts, explained that “Although we are continuously going through capital improvement at our hotels, the past three years have seen more significant investment due to our re-evaluation of our brand standards. The goal was to differentiate our brand from other hotel companies by design. Our architecture and design team identified more cutting edge firms to create a less traditional and more contemporary hotel setting in our Hyatt Regency hotels. We used our owned hotels as examples, revitalizing many of them first, and then presented the results and subsequent benefits of renovations to our other owners.” “Each year, we submit capital plans to each of our owners providing suggestions on capital improvements the hotel may consider in the following year. In the past three years, we have updated our design standards and brand criteria for our Regency hotels.” Asked how this investment differs from normal upgrades, Patten said, “Typically the life cycle of public areas is six to seven years and the guestroom life cycle is seven to eight years but as a matter of course, finishes are replaced and updates are made to the property through a number of cycles. After a certain point in time, it becomes necessary to reinvest a significant amount of money in a property to reposition it for the future.” CPN has recently reported on several deals involving Hyatt hotels, including the Hyatt Regency Phoenix, which was purchased by PCCP L.L.C. in a joint venture with DiNapoli Captial Partners for approximately $96 million. The Ashford Hospitality Trust Inc. closed on the disposition of the Hyatt Regency Montreal and the Hyatt Dulles Airport in Herndon, Va., in deals totaling $135.5 million. And lastly, RockBridge Partners, an affiliate of RockBridge Capital L.L.C. and Davidson Hotel Co., acquired the 194-room Hyatt Regency Suites in Palm Springs, Calif., from PSH Holdings Inc. for an undisclosed amount.