The Hipster Hyatt: How hotel chains are retooling to lure Millennials

Big chains adopt low prices, local vibes to keep pace with Airbnb

Go the Facebook page of Hyatt’s newest hotel in Chicago and you’ll find posts about the best nearby ice cream cone and music festival, not about its cozy beds. Welcome to the launch of Hyatt Centric, a new line of mid-priced lifestyle lodgings aimed at the surge of travelers who prefer an authentic local experience over a traditional hotel stay. The new Hyatt chain, with an emphasis on neighborhood culture, launched in Chicago and Miami this spring and will be rolling out in New York, San Francisco, Atlanta, Washington D.C., Paris and other cities this summer. Regional ads and marketing will break in the fall, per a company rep.

Each hotel in the chain is being custom designed, with a few common elements such as The Corner, a common space where guests can work, socialize, eat and study a collection of local books and magazines. Each facility will also have an open floor-plan bar with locally inspired food and cocktails, to give guests and area residents a place to mingle.

"We see growth in the lifestyle segment, made of people who are not looking for the amenities of a resort but want the full experience of the city and the culture where they are staying," said Sandra Micek, Hyatt’s senior vice president of global brands. "Hyatt Centric is designed to tap this modern mindset, which is most common among Millennials, but shared by lifestyle travelers of all ages."

The new brand’s visual identity, crafted by Lippincott, uses a mix of photography and illustrations that highlight the best food, culture, shopping and events at each destination. The Hyatt Centric logo is supposed to evoke the individual streets and intersections where the hotels are located.

Hyatt joins a handful of major hotel brands opening Millennial-friendly chains with an urban neighborhood vibe and distinctive non-corporate names.

For instance, Hilton’s Canopy chain debuted in Oct 2014 and boasts that no two hotels will be the same. It calls itself "the streetlamp of the neighborhood," with local design, food, beverage and art. Marriott International’s Moxy hotels, which it says are designed "around the personality of the local market," plans to open outlets next year in hip metro areas including New York, San Francisco and Seattle.

Micek said Hyatt, unlike the others, is using the parent company name prominently in the moniker of the new chain because Hyatt hopes that eventually the company brand overall will be identified as a lifestyle brand. "The idea that our hotels offer guests a cultural experience is something we want to see across all the Hyatt properties," she said.

That’s no surprise since the category is hot and getting hotter, noted experts.

A report by Smith Travel Research and business consultancy The Highland Group states that lifestyle hotels have seen demand grow at an annual average pace of nearly 20% from 2009 through 2014, compared to U.S. overall hotel demand growth of 4.2%.

Feeding the trend is easy-to-get online information from Google Maps, social media, and review sites like Trip Advisor and Yelp. "Ratings, word-of mouth and fast-growing independents are all putting pressure on the big hotel chains," said Bonnie Knutson, business professor at Michigan State University. Established companies, such as Hyatt, may talk about local exploration but "they have to do a better job of really connecting with the local scene, with being personalized and customized," she said.

In the meantime, "Airbnb is the 800-pound gorilla in the room," noted Jan Freitag, senior vice president of Smith Travel Research. Airbnb’s high profile and its marketing about authenticity and discovery have an impact on what people expect out of travel, he said. The home rental site "is also getting more assertive about attracting business travelers, competing directly with hotels, " he added. Indeed, on July 20, Airbnb upgraded its services for corporate travel managers, including centralized billing and itinerary tracking – just like the major hotels.

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