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Hyatt sets stage for select-service expansion in China

Hyatt Hotels is making good on goals to broaden its select-service footprint in coveted Chinese markets with an agreement, in cooperation with Chinese investors, to develop 50 Hyatt Place and Hyatt House hotels in the next five years.

The Chicago-based hotel company made the agreement with Tianfu Minyoun Hospitality, a hospitality management company owned by Tianfu Management Group, and includes plans to develop hotels in Hyatt’s Unbound and Centric brands.

Franchise agreements for the first three Hyatt-branded hotels were also signed, for Hyatt Place Nanchong Gaoping, Hyatt Place Changchun Jingyue and Hyatt House Changchun Jingyue, all of which will be operated and managed by Tianfu Minyoun.

Minyoun Hospitality operates 31 hotel and resort properties in 25 locations in China, Thailand, France and Fiji, under six hotel brands: Minyoun Pavilion Hotels, Minyoun Hotels & Resorts, Galaxy Minyoun Collective Hotels, LIA! By Minyoun, LIA! Selective by Minyoun and UHO Hotels, along with three restaurant brands. 

“We are working with Minyoun because of the quality of the organization and the diversity of their capabilities, including development, construction and management, as well as their commitment to hospitality,” said Leo Yen, Hyatt’s senior vice president of development, China. “We also see this collaboration as an essential piece to how we see our business developing in China.”

Until a few years ago, the majority of the industry’s focus in China had been on full service upscale/luxury hotels and the budget segment, Yen said. “We expect strong growth in the select service segment, especially with China’s rapid rate of urbanization and the growth with middle class consumers. Thus far, our Hyatt Place and Hyatt House select service brands are on a terrific trajectory and we continue to grow in a thoughtful way while focusing on gateway cities and building brand preference in markets where customers are increasingly traveling.” 

As for the China market, Yen said there is high potential to capture China’s growing consumer class with the select-service brands. “We’re aligning our growth to leverage new demand in domestic travel and expect to further expand into tier two and three cities in China.” Yen said the brand is adjusting to the Chinese consumer by including local food offerings, adding private dining areas and circular tables.

“We are pleased to be working with Tianfu Minyoun, the first authorized third-party management company for franchised Hyatt hotels in China,” said Hyatt’s Asia Pacific Group President David Udell, according to a press release. “Hyatt has a strong brand reputation among business and leisure guests for authentic hospitality worldwide. Tianfu Minyoun Hospitality has profound insights into the Chinese market and has gained crucial financial support to power our collaboration with them. Different from exclusive franchise and brand agency models, the cooperation between Tianfu Minyoun and Hyatt is set to make the most of both sides’ respective strengths and resources to boost the development of the Hyatt Place and Hyatt House brands in China.”

Different from “master franchise” or “full brand licensing” agreements that have been done in China, both Minyoun and Hyatt will continue to develop Hyatt Place and Hyatt House hotels through their own development channels, Yen said. “For example, we will continue to leverage our deep relationships with real estate developers and institutional investors and Minyoun will focus on conversion opportunities of existing stocks of SOE (state-owned enterprise) hotel portfolios and independent hotels. The complimentary nature of our individual development channels is a unique aspect of this landmark agreement.”

Yen said Hyatt will continue to maintain brand standards and operational execution of all Minyoun deals.

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