Hyatt Hotels Corporation has struck again. After the U.S. stock market closed on Tuesday, the company confirmed plansto acquire lifestyle hotel operator Standard International。

The deal will bring Standard International's lifestyle brands, including its namesake The Standard, and its 21 hotels worldwide intothe Hyatt system. The purchase price is up to $335 million, while adding approximately 30 projects to Hyatt's growing lifestyle hotel pipeline.

The deal is one of several lifestyle brand acquisitions Hyatt has signed over the past two years and repositions Hyatt among competitors such as Hilton, InterContinental Hotels & Resorts, which are also aggressively expanding in this space.

As companies have snapped up lifestyle brands one after another, this once lower-risk segment has evolved into a fast-paced arena crowded with brands that are sometimes hard to tell apart. According to one hospitality industry professional, for hotel companies seeking to stand out, this is no longer a game—it's war.

Sid Narang, who has over two decades of experience in the hotel industry and currently serves as managing partner at private equity firm Crescent Capital Ventures, previously held executive roles at SBE, Starwood, and W Hotels. He shared with Hotel Dive the drivers behind the competition, how hotel companies can stand out in a "crowded" market, and the evolving trends in brand consolidation.

The "war" rules of the lifestyle segment

With the acquisition of Standard International, Hyatt has made its latest strategic move in what Narang calls the "lifestyle war."

Narang said that in the current environment, lifestyle brands are "fiercely" competing for customers and their wallet share, customer funds and business, lender capital, talent, and other critical resources.

"Almost all major hotel companies are now not only in the lifestyle space, but they're all aggressively going after it."

Sid Narang, managing partner at private equity firm Crescent Capital Ventures

This scramble for resources has been intensified by the recent saturation of the lifestyle segment—which, according to Narang, "didn't exist" 25 to 30 years ago.

"Almost all major hotel companies are now not only in the lifestyle space, but they're all aggressively going after it," he said, adding that competition has heated up dramatically, especially after the pandemic.

Brands, brands, and more brands

Since early 2023, Hyatt alone has acquired multiple lifestyle brands, includingDream Hotel Group、Mr & Mrs SmithandGerman brand Me and All Hotels。

The Dream Hotel Group acquisition added 12 lifestyle hotels to Hyatt, along with 24 signed long-term management agreements for future hotels. The Mr & Mrs Smith deal brought up to 1,500 boutique and luxury hotels to Hyatt—700 of which were alreadyintegrated into its system。

"The more franchise agreements you sign, the higher Wall Street values you."

Sid Narang, managing partner at private equity firm Crescent Capital Ventures

The appeal of rapid portfolio growth has also prompted Hyatt's major competitors, such as Hilton, to pursue brand acquisitions.

Earlier this year, Hilton acquired two lifestyle brands:Graduate Hotels, which focuses on college towns,and the design-forwardluxury lifestyle brand NoMad. Hilton has also partnered withSmall Luxury Hotels of the World, which previously had a partnership with Hyatt.

Meanwhile, Accor merged withEnnismore in 2021to create a "light-asset autonomous entity" with 14 global lifestyle hotels under its umbrella.

Wyndham Hotels & Resorts partnered with hotel group SBE in January to launch a "smart lifestyle" brand. IHG, meanwhile, has recently focused on expanding its existing lifestyle brands, includingInterContinentalandKimpton Hotels, after acquiring luxury brandSix Senses Hotels Resorts Spas in 2019。

Narang noted that hotel companies expand through brand acquisitions for various reasons, one of which is to follow a "valuable" light-asset strategy.

The light-asset model

Companies are focusing on brand acquisitions partly because of the current interest rate environment.

Narang explained that higher interest rates have increased borrowing costs, which in turn push up construction costs. As a result, fewer developers are starting new projects, "and if you're a hotel company that relies on management contracts, that's not good," Narang said.

"When the new development pipeline dries up, you turn to brand conversions," he added. "Hotel companies are looking for brands they can convert as part of a light-asset strategy. Acquiring a brand with contracts makes sense, and then they can try to scale it, possibly through conversions in the short term."

"Beyond that, Wall Street values hotel companies that follow a light-asset strategy," Narang said.

"The more franchise agreements you sign, the higher Wall Street values you," he added. "That's why Hyatt is selling its billion-dollar owned hotels and putting that cash into buying brands like Dream and Standard."

Earlier this week, Hyatt sold the 1,641-roomHyatt Regency Orlandofor $1.07 billion. Hyatt said in an August 16 statement that the sale was part of its broader capital allocation strategy to sell owned hotels and reinvest the proceeds in "light-asset platforms that accelerate growth."

Hyatt said that with this deal, it has exceeded its $2 billion asset disposition target set in 2021.

Changing traveler demands

So why are hotel companies specifically targeting lifestyle brands?

Narang said it's because they are following shifts in traveler sentiment.Gen Z and millennial consumers dominate the travel market, and this trend will continue for years. These travelers "seek authentic experiences," and they also value design, uniqueness, and a hotel's restaurants and bars.

Lifestyle hotels oftenfeature more design-forward elements and treat food and beverage as an "integral part" of the guest experience, Jane Mackies, senior vice president of IHG's luxury and lifestyle brands, previously told Hotel Dive.

Hyatt's acquisition of Standard International is directly tied to changing traveler demands, said Daniel Langer, a professor of luxury strategy at Pepperdine University and New York University.

"In my view, this acquisition is about capturing the rapidly evolving demands of the next generation of affluent travelers. Today's luxury travelers seek unique experiences, creative environments, and cultural relevance, and the Standard brand delivers exactly that," Langer told Hotel Dive.

"By acquiring these carefully curated creative properties in some of the world's most dynamic markets, Hyatt is enhancing its cultural resonance and diversifying its luxury offerings to stay relevant in a competitive market," Langer added.

How brands can stand out

With so many brands engaged in the lifestyle war, "talent, culture, and creativity will likelydetermine the winners," Narang said in a LinkedIn post on Wednesday.

He later told Hotel Dive that brands must prioritize finding the right talent to lead the operations of newly acquired lifestyle brands to ensure quality.

"[Lifestyle] is a different business than what these companies have been used to. It requires a different style. Decisions are made differently. There's more spontaneity in how these businesses are run or grown," he said. "If (hotel companies) lose the talent war in the lifestyle space, they'll fall behind because the decisions made on property, on the business, on design, on sales won't be of the quality needed to drive revenue."

Hyatt announced on Tuesday that, alongside the Standard International acquisition, it willform a new dedicated lifestyle group, led by Standard's executive chairman Amar Lalvani. Hyatt said the group will take on "independent leadership" in key functions such as experience creation, design, marketing, programming, public relations, food and beverage, nightlife, and entertainment. Although details of the group have not yet been announced, it is expected to lead all of Hyatt's lifestyle brands, including Andaz, Caption, and Thompson Hotels.

Beyond hiring standout talent, lifestyle brands also need to offer unique creative experiences to attract guests, Narang noted, because experiences drive hotel choices even more than price.

Hotel groups need to "avoid the sameness that plagues service delivery across many hotel brands," Langer said. "Young luxury customers in particular seek inspiration, and inspiration comes from highly curated and differentiated experiences."

"Today's luxury travelers seek unique experiences, creative environments, and cultural relevance, and the Standard brand delivers exactly that."

Daniel Langer, professor of luxury strategy at Pepperdine University and New York University

Experts told Hotel Dive earlier this year thatexperience-based travel will be a trend influencing guest behavior in 2024 and beyond。

Looking ahead

Narang noted that because the lifestyle space is crowded with brands, even chains under the same hotel company need to compete with each other.

Yariv Ben-Ari, chair of the real estate hospitality practice at New York law firm Herrick, previously told Hotel Dive that one of the challenges a hotel faces when acquiring another brand is assessing how it willfit into different markets and compete with other brands, and even with its own assets.

As for Hyatt, Narang said one of the first things Lalvani needs to focus on as head of the lifestyle group (besides finding the right talent) is how to "set the right flight formation" for all of Hyatt's lifestyle brands. If Lalvani manages all of Hyatt's brands, he will ensure each brand has a clear brand narrative and is clearly positioned to offer unique food and beverage and other amenities, Narang predicted.

"[Lalvani] has to differentiate these brands enough to attract developers and communities," Narang said. "Otherwise, some of these brands will get lost in the shuffle, and there are quite a few brands that could get lost."

Langer said that as more luxury travelers seek customized, immersive experiences, competition in the luxury and lifestyle hotel space will "intensify" in the coming years.

When hotel companies look to acquire lifestyle brands, they will seek those "with a strong identity, cultural relevance, and the ability to attract a loyal customer base," Langer said.

"The value proposition of such acquisitions lies in whether the brand can deliver experiences that deeply resonate with modern affluent audiences," he said.

Narang said lifestyle brand acquisitions will continue. But he noted that the supply of brands available for acquisition is shrinking.

"There aren't many left. The ones that come to mind are Ace Hotels or Virgin Hotels," Narang said. "I expect them to be acquired. I expect the next 12 months to be mostly about digesting these brands."