BrightlyBob

Whaaaat? You say! Yep - it’s true, the newly constructed “Lume” building at Manchester University completed just last year and flagged with the lower floors as a Crowne Plaza and the upper floors as a Staybridge Suites is now to be reflagged as a Hyatt Regency and Hyatt House duality. Reflagging is an expensive project to take just 12 months after opening and I’m not sure what the owners are doing here. It may be good for Hyatt to add to its tiny UK inventory, but I can’t see this working out long term

Excluding its SLH tie-up, Hyatt has less than a dozen properties in Britain, all save one are in London. Now it’s easy to see why Hyatt would salivate at the prospect of opening up in Manchester at a brand new build and overnight triple it’s brand presence outside the capital - Manchester is the Centre of the British governments “northern powerhouse” strategy and is prospering with strong growth and increasing gentrification. Lets put it this way - Oxford Road was definitely not the place to construct “The Lume” at the turn of the millennium!

I believe Hyatt may be selling it’s belief in success on the back of the performance of its Birmingham Regency property asserting that’s a guide for its future performance at the Lume. It’s not. The Birmingham Hyatt Regency is widely viewed locally as Birmingham’s seminal hotel, a gleaming glass skyscraper built at a time when Birminghams only skyscrapers were poured concrete monstrosities. Situated at the centre of Birmingham’s prosperous nightlife on Broad Street right next to the International Convention Centre and Concert Hall and directly connected by with its own private “skywalk”, the hotel contributed to Broad Streets success, the ICC to the hotels. It was the seminal property when it was built 25 years ago and still is, I’ve no doubt the franchise has been viewed as a storming success by Hyatt, but really the building required an international brand and at the time it couldn’t be Marriott, Hilton or Crowne Plaza as these three big 4* names were already there. Whilst the owners were happy to build in the big suites and a club lounge it wasn’t felt the venue could run to 5* so couldn’t try and adopt the JW Marriott, Waldorf or Intercontinental monickers. That left lesser known international 4* brands such as Sheraton, Westin or Hyatt. Birmingham went with Hyatt Regency. I reckon it could have had the same success as a Sheraton or Westin because it’s success is really due to its prime position and one-of-a-kind property. 25 years on that’s not changed.

The Lume building is not however the Birmingham Regency. It’s at the crossroads of the Manchester and Metropolitan universities. Those in “something of the know” might presume it’s next to the Oxford Road station, it’s not. They might presume it’s in the city core. They’d be wrong again. They might be led into these twin beliefs of easy connections and walking to the city centre convenience by its lack of any parking provision, free or paid. Yet again, they’d be wrong. In a politically motivated decision there’s absolutely no parking provision at the Lume, but alas no attractive public transport provision only local buses running up and down the Oxford Road if you want to grab a bus timetable and some loose change. The Lume is a fancy name for a nice but by no means outstanding building between the two Manchester universities with all the University lifestyle to hand, but not that many businesses. And definitely not a quick walk or easy metro trip to the business, retail, accountancy and legal areas at Deansgate, Piccadilly, St Peters Sq or the Cathedral quarter.

Whilst American Hyatteers chasing status may think they’re prepared to sacrifice the convenience for those difficult-to-get Hyatt qualifying nights, I doubt they will for long, it’s too inconvenient. And I’m not sure there’ll be that many of them. And unlike the Birmingham Hyatt, the Lume isn’t a seminal building, it isn’t directly connected to anything, it isn’t in a nightlife or even “lifestyle” area of Manchester. The Lume won’t attract enough status-chasing Americans and there’s very few Brits who can manage Hyatt status. The brand will have very little traction, it needs Brits to stay, but there’s very few Brit Hyatteers, it’s way, way too difficult to get the nights with such pathetic coverage outside the States. The owners may be disappointed in the numbers generated by Crowne Plaza and Staybridge but that’s got more to do with the locality issues than the lack of brand traction. Britain has plenty of IHGers who would certainly have business interests, or student offspring in the area who’ll pursue their loyalty and stay there but since there’s very few British Hyatteers the property will rely on Americans to get traction. Good luck with that, I’d not imagine many American businesses have to be in that area, nor many American parents making regular journeys to visit their kids at University. If there was a swap that could work it might be Marriotts “kind of fitness/lifestyle” Westin brand coupled with Residence Inn. Or Hilton could offer up Conrad and Embassy Suites. There’s a goodly number of British Marriotteers/Hiltonites that would be similarly motivated to the many British IHGers to stay there. Not that I think that would massively move the needle set by the Crowne Plaza/Staybridge duality, but at least like IHG, both Marriott and Hilton have a large UK based loyalty membership that is motivated to stay there, unlike Hyatt. If the owners are disappointed by the Crowne Plaza and Staybridge Suites brand traction that’s not likely to be improved by making a tough job even tougher and inviting a brand with far fewer British adherents to take over.

This seems a confusing move by the owners, but in the meantime if you’re planning to stay in the Oxford Road area of Manchester next year, be aware that the Crowne Plaza and Staybridge Suites will no longer be an option after 10 January 2020...

speed.skater

Yeah, this was slightly broached on FT here and there.

I still think the story is that IHG has oversupply in Manchester, creating problems for the properties. Hyatt certainly doesn't have a strong presence in MAN. U Manchester's business school (as well as other schools) certainly see quite a few visitors from the US. A non-trivial subset of those is bound to be loyal to Hyatt. And lets not forget the Hyatt loyalites from other places.

I think the change is bad for those of us who frequent IHG but rarely use Hyatt. The CP Manchester was a terrific property and often very competitive in its pricing. I discussed in another thread I stayed there for GBP 60-70 a night including breakfast. And as a Spire, I received perks such as an upgrade to a high-floor club room as well as complimentary club lounge access.

The properties are gonna remain nice ones after the reflag. But I expect prices to go up (due to the fact that IHG is over-serving but Hyatt under-serving the Manchester market).

BrightlyBob

I haven’t stayed yet but I was there last week for a meeting and thought it was a strong property - indeed on the back of that me and the missus are booked in for a night early in November,. There’s no question that the Lume could certainly wear the Hyatt Regency branding I’m just entirely unconvinced that Hyatt’s name will attract more guests.

I definitely see where you’re coming from with IHG saturation in Manchester, but neither Hilton nor Marriott are so prevalent in the city and their Conrad or Westin brands could do with an outing north of the Watford Services gap! Of the two, I reckon Westins wellness type brand approach might work best.

speed.skater

@BrightlyBob: Btw, I do agree with many points you make in the OP. For example, I do believe that for Hyatt, it's a bit iffy to put up their first two properties in a city so far away from the city centre.

But the fact of over-saturation remains. The HIX and Principal are within walking distance to the CP/Staybridge. And they're gonna attract much of the same crowd. Yes, the Principal is more upscale, the HIX more economy. But I believe many IHG customers will nevertheless see these as alternatives to the CP/Staybrige. Some people loyal to IHG will even seriously consider the three city centre properties as alternatives. Just cf. some discussions on this forum on which IHG (or Marriott or Hyatt or Accor ...) property to stay at in a given city. Even the often times "expert" bookers on FT frequently display considerable loyalty to a chain. They are set on a chain, not on a location!

The switch to Hyatt will be good for the property, I imagine. They will reach a different audience after the reflag.

BrightlyBob

Oh, no I don’t disagree, I think you may well be right and IHG could have over saturated Manchester!

All the same, I’m still not seeing the attraction of Hyatt here, if IHG is to be replaced to increase exposure both Hilton and Marriotts have brands to spare and a smaller Manchester footprint coupled with a far higher domestic membership...

Land-of-Miles

I think the problem for many will be the location. It isn't a branding issue it's a location issue and the location by the Uni is good for those who need to be at the Uni but its pretty awful for any other purpose in Manchester. Manchester is also a city where the roads are so fundamentally awful and the traffic flow is so weird that it takes a long time to traverse the city by say Uber even between 2 close locations.

This gives an issue for any chain and these are nice properties but perhaps someone who just MUST stay at a Hyatt may be more inclined to take the inconvenient location on the chin, whereas an IHG, Hilton or Marriott loyalist would have other better options throughout the city.

BrightlyBob

Yes, that was and remains my view, although the surfeit of IHG options almost certainly didn’t help, my view remains that its location is the Lumes biggest impediment to filling its 300+ rooms nightly! I remain unsure that some desperate international Hyatt-status-chasers are going to make much of an impression on that daily number...

Land-of-Miles

The weird thing is that I cannot see Hyatt charging lower management charges, perhaps they are giving some occupancy guarantees as part of the deal?

The CP Oxford Road is a great property for Spires whilst it remains a CP if you can live with the location.

azepine00

Imo from brand recognition (at least here in the states) hyatt is perceived is higher end brand that can justify higher rates.
Of course from loyalty program hyatt is far more appealing too.
Why settle for CP if you can be a Hyatt?

Land-of-Miles

Except that few of your target customers needing to stay in this part of Manchester are likely to be US Residents who seem to me the only demographic for whom Hyatt status makes sense given the piss poor footprint elsewhere.

Like Starwood did, Hyatt needs a good loyalty scheme to mitigate the impacts of the poor footprint. Hyatt does seem great, just wouldn’t work for me or many of the target customer base (I would expect).

UKDegsy

Disappointing. I'm Spire and booked a room for February 2020 which was not cancellable. Anyone any experience in rebranding and how I get out of the booking without penalty?

I certainly wouldn't have booked this hotel if it was a Hyatt.

Thanks,

UKD

MSPeconomist

Lots of Hyatt elites aren't USA residents. Check the Hyatt forum here on FT. For years there was an annual FT London DO featuring Hyatt.

Land-of-Miles

I am not saying they are exclusively US Residents but it’s going to be those who can make the limited North American biased footprint work well for them. It’s definitely not going to be for the Hilton, Marriott or IHG elites who make status purely or mainly on UK travel is it broadly speaking? Unless you have an odd need to only stay in London and Birmingham.

iHyatt is definitely more the Croquet to IHG and other chains Cricket.

BrightlyBob

I’m certainly not saying there’s no Hyatt Elites living in Britain or Europe, but compared to IHG, Marriott or Hilton that number is going to be very small, getting those elite nights is impossible outside London and Birmingham. Hyatt’s footprint is vanishingly small this side of the Atlantic so the Manchester Hyatt duo best not be relying on WoH guests to fill those rooms...

azepine00

Footprint argument has a flip side - once you become the size of ihg hilton and marriott you lose any distinction. I used to seek out spg properties now they are lost in three dozen marriott brands..

Marriott hilton ihg only teach us that loyalty program evolves into generic point cashback with minimal recognition or distinction as chains grow... sad to see spg, fairmont, kimpton disappear into sea of mediocrity...