Mutual admiration fueled one of the biggest deals in the hotel industry last year: Hyatt Hotels Corp.'s acquisition of Standard International.
Last August, Hyatt agreed to acquire Standard International, which owns lifestyle hotel brands The Standard, Bunkhouse Hotels and The Manner. The deal came with an initial base price tag of $150 million, a further $185 million in post-acquisition growth incentives and fees of up to $47 million. The deal was completed in October.
At the International Hospitality Investment Forum EMEA held last month in Berlin, the deal’s two major players — Mark Hoplamazian, Hyatt's president and CEO, and Amar Lalvani, one of the founders of The Standard hotel brand — sat down to discuss how the piece of business came about. Today, Lalvani is an executive vice president, president and creative director of lifestyle at Hyatt.
The deal is a story of passion and admiration, and a couple of coincidences, Hoplamazian said.
“Ironically, my best friend at business school is also very, very close friends with [Lalvani] and built The Standard, High Line development, so I’ve actually been intimately aware of The Standard brand since 2010 when it opened. I have always admired it,” he said.
Serious discussions about a deal between the two began earlier in 2024, and the timing was perfect for Lalvani, who was thinking about the next step for Standard International and its hotel brands.
“We frankly outgrew our infrastructure, and we needed a great partner to take The Standard to where we knew it needed to go. We had reached our limits of what was possible. We had hit our boundary,” he said.
As the company expanded its portfolio, that came with obstacles in more remote markets, Lalvani said.
“We opened an incredible hotel called The StandardX, a new brand in Melbourne, and it was tough because we do not have infrastructure there, we do not have distribution there. We opened a Standard in The Maldives, a really lovely hotel, but we did not have … the feeder markets that are required. It is not enough to create cool stuff. You have to have backbone,” he added.
Lalvani said Hyatt’s boldness and evolution were factors in making the deal happen, but so was its trust to allow The Standard “to be who we are and keep creating within a world-class infrastructure.”
Hoplamazian was impressed by how much of a brand identity Standard International had built in the hotel industry all on its own. He said The Standard was one of the “very few brands [that] have the brand equity, the cache and the relevancy. … It is unprecedented. I cannot think of another brand that pulled itself up by its own bootstraps and kept doing that over [26 years] and ended up with something so compelling.
“The cultural relevancy of The Standard has maintained itself,” Hoplamazian added. “Its financial performance has been phenomenal.”
Building Hyatt's lifestyle portfolio
For Hoplamazian, the Standard International deal was what Hyatt needed to elevate its lifestyle portfolio and guest engagement.
“The guest of The Standard provided that. [Hyatt’s] was a more traditional approach to how you would run hotels,” he said.
Hoplamazian said one example of that was how The Standard curated its ecosystem.
“Which openings, which fashion brands, are going to actually do a buyout for something special? [The Standard] is curated in a way that is totally different. This is the kind of creative flow and cultural relevancy that can elevate everything that [Hyatt has] done,” he added.
When Lalvani said Standard International's team poured its "heart and soul into every single hotel," Hoplamazian added that's no easy task.
“Lifestyle hotels have a position all to themselves, but that takes some time to evolve,” he said.
Another coincidence was that Lalvani and his team created a new brand, The Manner, in the same building in which Hyatt opened its first Thompson-brand hotel in New York City, Hoplamazian said.
Standard International acquired the building in 2022, but the hotel itself did not open until September 2024, one month after Hyatt announced the Standard International deal. The 97-room property now is part of Hyatt’s soft brand The Unbound Collection.
Some lifestyle hotel brands lose their magic touch when they scale, but Hoplamazian said that is not true of The Standard.
When Hyatt acquired the brand, Hoplamazian told The Standard team: “Here, it is yours. You have full autonomy up and down, side to side, which actually launched a full reorganization of Hyatt, so this was not just buying a brand, this was launching down a path of breaking Hyatt into distinct brand groups,” he said. “We are applying that same discipline to each of our brands across five different groups. It has been a triggering event for the whole company.”
And whether a property is a lifestyle hotel or not doesn't matter to Wall Street, Hoplamazian said.
“What they will ultimately track is fee generations and fees per key, and we have extremely high fees per keys. A lot of what has to do with where we are positioned,” he said. “Our [average daily rate] position for the vast majority of our brands is at the higher end of each of the segments we are in, and that is really where it counts.”
Standard's time
Hoplamazian and Lalvani also pointed to The Standard’s ability to add branded residences at such an early stage of its development and with relatively small scale.
Now both executives are looking at expanding The Standard and its other brands.
“The idea we could have a Standard in Tokyo or Mumbai, and all these brands can expand around the world under our leadership is fantastic. … The possibilities are boundless,” Lalvani said. “Japan is obvious, a no-brainer, quite a few markets in Japan, the same is true in China. Vietnam and Thailand, I could keep going.”
It's an exciting time for the brand partnership going forward.
“We are just at the beginning of something very expansive, and that is what Wall Street will ultimately see and understand,” Hoplamazian said, adding the Hyatt-Standard deal was a “real inflection point” for Hyatt.
Plus, by joining Hyatt, Standard's hotel brands get more recognition among prospective hotel owners and investors, Lalvani said.
“There are owners that wouldn’t have done projects with us at Standard but will now do projects with us at Hyatt, so they see it now as the best of both worlds,” Lalvani said.