It looks like Hyatt is quickly moving to expand their new Unbound collection. I was a bit disappointed when the initial announcement came out, only because there weren’t any new properties to visit yet.
Hyatt solved that pretty quickly with yesterday’s announcement about the acquisition of the Thompson hotel in Miami Beach. The article isn’t 100% correct in its assertion that Hyatt only has two properties in Miami. While they only have two full service hotels in Miami they also have a handful of limited service hotels (Hyatt Place and Hyatt House). They also have another full-service hotel in nearby Coral Gables.
Nevertheless, the Thompson (soon to be renamed the Confidante) is a solid addition to the Hyatt family. The property is well-located in Miami Beach and has plenty of amenities, according to the article:
The property has direct access to the beach. It has 30 suites, two restaurants, two heated swimming pools, a rooftop spa, a full-service salon, a fitness center, in-room dining, a craft cocktail bar, and a tropical garden.
30 suites is a decent number for a 380 room hotel. The property is bigger than I would have expected for Miami Beach, which should also be good for award availability.
The interesting thing to me is that Hyatt is acquiring the hotel as opposed to just signing a management agreement. While Hyatt has been doing more franchising as of late (especially with brands like Hyatt Place and Hyatt House) they’ve employed a strategy that has them owning a higher percentage of hotels than their competitors. They’re also a smaller chain, making it easier from a cashflow standpoint to manage that sort of a strategy.
In this situation, though, Hyatt’s willingness to acquire the hotel may have been the reason it will become part of the Hyatt family. It was purchased only a few years ago by a private equity firm and renovated to convert it from apartments to a luxury hotel. Given that the private equity firm probably signed a management agreement with Thompson, it doesn’t seem likely that it would have been easy to rip up that agreement only a couple of years later.
Hyatt has also been active selling hotels as well, spinning off properties that maintain the Hyatt brand and in some cases a management contract. That leaves them with cash to purchase new properties, a strategy that can have the added effect of increasing their footprint without needing to issue more stock to do so.
Hyatt is a unique public company in that the Pritzker family that originally owned the chain retains a sort of super-majority voting interest, something that was rumored to be one of the reasons Starwood Hotels didn’t accept their takeover bid.
The property was renovated in 2014 and will be reopening as The Confidante later this year, when we’ll be able to redeem Hyatt Gold Passport points for a night there. As promised when they announced the Unbound collection, Hyatt will leave this hotel to maintain their own place in the market. Quoting from a Miami Herald article:
“We are thrilled to expand our presence in Miami Beach, a market in which we have great unmet demand from our guests,” said Stephen Haggerty, global head, real estate and capital strategy for Hyatt. “The property will have the freedom to establish and maintain its individuality and distinct character while benefiting from the operational excellence and efficiencies that come from being part of Hyatt.”
Hyatt has already shown the ability to do so with the addition of The Driskill Hotel in Austin, TX to the Hyatt family a few years ago.