Globalization Strategy: Hyatt Hotels Corporation

free essayHyatt Hotels Corporation is an international company based in America, which is concerned with hotels operation. The corporation was initially owned by entrepreneurs Jack Dyer, Jay Pritzker, and Hyatt Von Dehn. According to Piao (2015), Hyatt Regency in Hong Kong was as the first hotel established by the company outside the U.S. in its international strategy promotion in 1969. Moreover, brands known as Grand Hyatt and Park Hyatt were introduced in1980. In 2004, hospitality assets belonging to Pritzker family business (such as Hyatt Corporation) were consolidated by a single name known as Global Hyatt Corporation. Piao (2015) informs that the name was changed to Hyatt Hotels Corporation in 2009.

Leaders were thinking how to internalize the new brands after acquiring and rebranding the AmeriSuites. Therefore, Piao (2015) explains that an announcement was made in 2011about Hyatt Hotel Cooperation expanding its service brand internationally. The company owned, managed, and developed its brand hotels abroad. It also developed resorts and vacation as well as residential properties internationally. There was a significant growth in the upscale select service hotel category. Hotel chains affiliated to this category increased their hotel capacity. These hotel chains included courtyard by Marriott, Hilton Garden Inn, and Wingate Inn.

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The company employed various strategies in its market expansion. Firstly, Piao (2015) notes that its expansion was concentrated in under-penetrated markets in areas where its presence had already been established and in those that experienced many travelers. Besides, it increased the number of hotels by using brands affiliated to it by simply engaging new management in addition to franchising agreements.

Motives in Expanding its Brand Portfolio

Hyatt Hotels Corporation has a large brand portfolio, and its management is trying to expand it in all possible ways so that the company can be among the biggest international corporations. Piao (2015) states that it is important to note that one of the motives behind the expansion is the company’s intention to grasp opportunities of properties that offer the selection in terms of services using lowered prices. These opportunities are present particularly in some emerging markets such as Indian. Hyatt Hotels Corporation wants to expand its brand portfolio to reach the under- penetrated areas where its presence was felt.

Secondly, the company wants to gain access to areas with high number of travelers where the presence of the company has not been established yet. Therefore, it has to increase the number of hotels under its brand affiliation by engaging new management as well as franchising agreements. Additionally, Piao (2015) states that the company wants to experience growth in its select-service presence. Besides, the company has to construct new franchised properties, and this construction has to be done by the third party developers. The company also has to convert and renovate the existing properties that are non-Hyatt in addition to participating in the developing properties that would be put under the management of Hyatt Hotels Corporation brands.

In addition, the company intends to gain capital specifically from developers, besides the property owners, who aim at the opportunities in the franchising business. The company also has a motive of acquiring other brands, franchising companies, and hospitality management by expanding its brand portfolio. These acquisitions include hotel real estate, thus, they may be able to complement the company’s ability of serving its existing customers apart from enhancing the customer preference through providing a higher selection of properties, services, and locations. Piao (2015) explains that another significant point is that the company is expanding its brand portfolio for strengthening its presence. This way, the company will engage in joint ventures and Green field startups. This is because joint ventures provide benefits specifically referring to the company acquiring higher returns as compared to franchising.

Motives in Choosing an International Strategy for its Lower Category Hyatt Place Brand

The Hyatt Hotels Corporation chose an international strategy for its lower category Hyatt place brand because they considered that the brand had a potential of growth not only in the United States, but also all over the world. Therefore, Piao (2015) asserts that the company wanted to expand this brand into the strategic markets by analyzing the opportunities of expansion. This follows the announcement by the company’s executive vice president Steve Goldman that there is an international potential growth.

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Moreover, there is high competition locally as compared to the international competition. Thus, the company sought for a globalization strategy to avoid local competition. This occurred because of the increased demand worldwide caused by the increase in the number of travelers. The company is, therefore, able to offer services to these numerous travelers worldwide by engaging in a globalization strategy.

Another motive for the international strategy includes a bid of creating the extension of a new brand that provides benefits to the company and customers of the existing company’s hotels. Piao (2015) opines that for the success of this idea, the company appointed two senior managers, namely Jim Abrahamson and Mike Leven. Besides, the company aims at maximizing profits and the international arena presents more profit than the local one because the world markets are more profitable than local markets.

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