Bullish Hoplamazian talks AI, 2026 pace, more
Bullish Hoplamazian talks AI, 2026 pace, more
https://www.hotelinvestmenttoday.com/Financials/C-Corps/Bullish-Hoplamazian-talks-AI-2026-pace-more?By Jeffrey Weinstein
CHICAGO – As Hyatt Hotels Corp. moves further toward its stated goal of becoming a predominantly asset light business model, it reported third quarter earnings last week that reflected strength within its luxury-biased portfolio. While leisure transient RevPAR increased 1.6% year-over-year, 3Q25 RevPAR was up 6% across luxury brands with net package RevPAR growth across its high-end all-inclusive business up 7.6%.
Hyatt President and CEO Mark Hoplamazian also stated they have three more hotels under contract for sale and an additional three with signed letters of intent. Hyatt expects all six hotels to close in the early part of 2026, keeping it on track to exceed a 90% asset light earnings mix in the near term.
During the earnings call, Hoplamazian was particularly insightful about Hyatt’s cost-saving initiatives, which he said includes a bigger goal of moving toward an insight-led and brand-focused organization.
“That sounds like corporate speak, but it’s real in the sense that we are going deep on being able to understand the different customer groups that we serve across our portfolio, and they are different,” Hoplamazian said. “How we get to them through distribution channels and marketing are different, as well.”
Hoplamazian further explained that Hyatt has divided its business into five brand groups, which is how they will operate the business moving forward.
He added that this is happening concurrently with a significant elevation of “practicing agile ways of working,” which has been a work in progress for four years. “It is designed to test and learn, experiment and innovate more quickly,” Hoplamazian said.
A third element related to business transformation and cost savings, Hoplamazian continued, is the use artificial intelligence – expanded use of machine learning and models. “We have built several agentic platforms already internally,” he said. “Some have been solely focused on driving top lines; some have been really focused on cost efficiency; they’re all focused on driving performance, including providing a platform that our hotel teams can use to maximize performance of their hotels, which has a direct impact on owners.”
With the AI platform, Hoplamazian said there are already direct, measurable impacts on the business.
Bigger picture, Hoplamazian said they changed the organization of the company and found tremendous levels of efficiency in how they’re staffed. “Some will be also in third-party costs because we are automating a significant number of functions and processes at a fraction of the cost of paying third parties to do it for you,” he said. “We’ve just scratched the surface. We are leaning into this very heavily, and you will see this as a tailwind for us for years to come.”
2026 tailwinds
When asked about his confidence in next year’s RevPAR environment reaccelerating, Hoplamazian first pointed to the potential tailwinds of the World Cup and the America 250 celebrations.
He also said the infrastructure bill continues to pace and hyperscalers are moving from planning stage to construction phase in their data center constructions with the minimum size of investment in those projects at $5 billion.
“There’s a tremendous level of activity in terms of mobilization of resources to lean into the data requirements of AI of the future,” Hoplamazian said. “So, I think there’s a lot of tailwind into economic activity in the United States as we look forward. Part of that, I think, is anticipated, and maybe driving some of the group pace that we see into next year.”
He added that leisure demand continues to be very strong with October showing the U.S. up 3% and international up 7%. “This is not abating... We’re seeing it in all of our numbers and, yes, we do serve a different customer base. So, I’m not making any comments about the midscale and below. I am making a comment about us.”
Performance, pipeline
Other highlights of the earnings call included:
Performance. Overall, in the United States, RevPAR declined 1.6% year-over-year, matching expectations. Soft select-service leisure transient demand was the main culprit. The fourth quarter is off to a good start with October RevPAR increasing in the U.S. by approximately 1% and globally by 5%.
Business transient RevPAR was flat in 3Q25, but Hyatt saw a 3% year-over-year improvement in the U.S. with select-service delivering positive quarterly growth for the first time in 2025.
Group pace for the fourth quarter is up approximately 3% as Hyatt laps easier comparisons. Hoplamazian said they are encouraged by the forward-looking booking trends with group pace for full-service U.S. hotels up in the high single digits and expected to benefit for special events like the World Cup and America 250 celebrations.
Pace for all-inclusive resorts in the Americas, excluding Jamaica, is up over 10% for the first quarter of next year, reflecting the continued prioritization of leisure travel.
Pipeline. Hyatt achieved net rooms growth of over 12% during the quarter, or 7% when excluding acquisitions. It ended the quarter with a development pipeline of approximately 141,000 rooms, an increase of more than 4% to last year. Upper midscale brands now represent 13% of its pipeline, up from 10% at the end of 2024 and more than half of Hyatt Select, Hyatt Studios and Unscripted by Hyatt opportunities are in markets where they currently have no brand representation.
Hoplamazian added that organic growth is extremely strong with Hyatt on track to more than double its core organic growth rate year-over-year
Turning a struggling hotel into a profitable asset
INTERNATIONAL REPORT — When a hotel asset management company takes over a struggling venue, the majority of the time, the issues are rooted in the team.
Whether it’s excessive hierarchy, low morale or simply the wrong person in the wrong role, that all-important service that exceeds expectations and ultimately cements success is missing.
Regardless of the sum invested in bricks and mortar, with the wrong team in place, you will fail. This is why, when an investor calls, the turnaround needs to start with the staff before the P&L sheet.
Whether it’s fair wages, flexible working or holiday packages – it’s crucial to cover the basics, which sadly, are still far from a box-ticking industry standard. Equally important is establishing the right internal culture.
In a fast-paced, reactive environment of hospitality, staff need to be trusted to make the right call and be well-informed. Even in the most elegant surroundings, we’ve all experienced those scenarios where basic customer questions are met with blank faces and delays as staff disappear to get a response from higher up the chain. It’s not good enough.
An asset management company can draw from an extensive network of contacts to identify the right leaders for a business with the values that inspire the wider team through the ranks – in short, an antidote to the heavy-handed micromanagement all too common at failing venues, which only breeds disillusionment.
In some cases, the ‘fit’ and ‘will’ are more important than the skill level when looking for the right person. The ideal individual will have entrepreneurial skills and be keen to lead and grow the business as if it were their own investment, a commitment that can be incentivized further by offering an upside on profits.
Working with a management firm
Post-COVID, it has become more common to repurpose existing hotel assets than to develop a new venue from scratch. Obviously, it’s an easier starting point; however, establishing cultural change within an already failing business can still be a slow process, and there may be the matter of dealing with a troublesome reputation. Typically, it can take 12 to 18 months before an upturn in trade is achieved, and anyone who thinks it can be done quicker is sadly deluded.
Of course, if a hotel has traded well in the past, there is no reason why it can’t thrive again with a refreshed brand and new direction. However, no project can be entered into lightly, and asset managers must be comfortable with risk and playing the long game.
For example, a property on the books may not generate any income for the best part of a year. This is a scenario that calls for foresight and vision; the judgment to spot future potential and have confidence that, in years two and three, the venue will become profitable.
Crucially, asset managers have the network and bandwidth to sustain fallow periods, although it is still a substantial amount of time to cover the costs. In this instance, fees may reflect the level of risk through a profit-sharing model. It’s a vastly different approach to traditional asset management models, and not necessarily typical, but a reminder that both the asset manager and the investor/owner should always be flexible, entrepreneurial, and aligned to make a project come to fruition.
In return, the investor can piggyback on the collective insight and wider resources that comes from those helming a large and diverse property portfolio and the wider resources. This could include utilizing a facilities team to discuss capital expenditure plans, leveraging an experienced sales team to understand the ideal customer mix for a particular location, and gaining insight from an operational lead on how food and beverage offerings can best support total revenue.
Plus, expect some direction on perhaps one of the most important calls to make: whether to invest in an independent or branded property. For many, a brand means automatic exposure, a helpful identifier, particularly when operating out of a central city location, and generally speaking, an easier path to secure investor confidence. For the first-time investor, a pared-down branded option underpinned by a simple operational model with limited or no food and beverage options is a solid starting point.
However, an independent property comes with less of a rule book and, as such, an opportunity to be creative and stamp your own identity on a hotel, even creating your own brand in the process.
Those wanting to go down this route may question whether an asset management company skewed more towards branded properties will be best placed to manage a venue demanding a far greater level of customization.
In truth, the fundamentals of hospitality can be overcomplicated. Regardless of venue and price point, whether you’re managing a hostel or a Hilton, the approach is rooted in great service and meeting guest expectations, which, when stripped back to the basics, is a clean room and a great night’s sleep.
Contibuted by Naveed Khan, London Rock Partners, London
Why international leisure has this expert optimistic
SINGAPORE — During the final session of the HICAP conference in Singapore last month, Global Hotel Alliance CEO Christopher Hartley wanted to leave things with an optimistic view of the near future.
“I think 2026 is going to be a great year and we’re going to see continued growth,” said Hartley, based in Dubai.
““If you look at 2025, we’ve all been through periods of uncertainty,” he continued, mentioning tariffs, geopolitical tensions and an overall slowdown in business demand. “While we saw a flattening in the growth of domestic demand, particularly in the U.S. and regionally across markets like Australia and China, international leisure travelers continued to grow significantly in 2025. We see that continuing into 2026.”
Hartley said the high-yield business of leisure travelers is making him the most optimistic for next year.
“International travelers are generally staying longer and spending more. We can be optimistic in terms of that,” he said. “We’re very much focused on upscale and luxury properties and that’s where we see international demand going.”
Hartley was part of a “Views from the Boardroom — Round Three” panel at the Hotel Investors Conference Asia Pacific (HICAP) event in Singapore. The panelists included Hulian Duan, managing director – APAC & Americas for Hannover, Germany-based TUI Hotels & Resorts; Kevin Goh, CEO of Singapore-based The Ascott Ltd. and Lodging CapitaLand Investment; and Jeff Wagoner, president and CEO of Honolulu-based Outrigger Hospitality Group. The author of this story served as moderator.
How AI will affect room inventory
When the topic turned to how AI is affecting the hotel industry, Wagoner also adopted an optimistic tone regarding the industry's potential benefits, particularly in relation to whether hotels can reclaim some of their inventory that had been allocated to OTAs.
“When you think about AI… it’s not just asking a question and getting an answer. It’s going to be the search engine of the future. So, what does that look like? How do hotels get rendered back and is this potentially a time where the industry claims back its inventory?” he said.
Another topic that will become an issue in the coming year, Wagoner said, was how the AI companies intend to monetize search in the same way as SEO.
“We’re at a place today where you don’t pay for these searches… The opportunity to buy terms doesn’t exist the way it does on Google or any of the other search engines that are out there today,” he said. “So, we’re in a really interesting time on how this develops and we’re all going to be faced with this probably over the next year.
“They’re going to want to monetize. There’s no doubt about it. Today, you can say, 'Tell me four hotels in Phuket (Thailand) that are luxury,' and you’re going to get that rendered back to you. Four hotels are going to come back. They might be the individual websites for those brands. It might be the individual hotel website, or it could be an online travel agent, but all of that’s happening relatively organically right now… How does that all work in the future?”
Wagoner mentioned a recent meeting with Oracle about this exact topic.
“They’re spending $26 billion to try to figure this out. The big brands are trying to figure it out,” he said. “When you think about AI, don’t think of it as a slick tool to get an answer to a question. It will be our booking engine of the future, and our ability to be able to drive any one of our assets or our brands to it is going to be critically important.”
How flex-hybrid can change business
Goh discussed how The Ascott Ltd.’s flex-hybrid model is reshaping investment and operating models for his company.
“We actually thought about this during COVID. We looked at hotel occupancies going down really low and cash flows going down really low. But we also looked at our extended-stay portfolio. We were still running at a good 40% to 50% occupancy. That meant that we still had cash flow coming in. We could keep the lights on and were able to pay our bills and be able to make a little bit of money after that.”
That kind of thinking has helped Ascott adjust its model for the current traveler, Goh said.
“We’re seeing people who are traveling in groups, whether it’s friends or family and wanting to stay more in the extended-stay apartment, as opposed to, say, three hotel rooms,” he said. “So, that’s when we discovered that our product can flex between a long-stay (extended-stay) and short-stay spectrum. That allows investors in our properties to flex between the long and short positions.
“Let’s say Singapore is having an F1 weekend or Taylor Swift is in town. We can lean a lot more into the short-stay segment and the yield is a lot higher. Let’s say we’re going through a very tough economic cycle. We can then explore doing more long-stay segments, which means you have stable cash flows and longer tenures of contracts with your guests. That flexibility is actually something that our investors love us for. They said they want to do more because they can ride through the different economic cycles.”
Brand diversification
Duan said TUI has been working intensively on balancing brand diversification with operational efficiency for its benefit.
“Balancing the brand diversification with this operational efficiency in emerging markets is quite important for us,” she said. “We have learned a lot of successful stories from other international brands in the past by developing hotel clusters in certain areas so they can align all the resources to support this class of hotel success.”
Duan brought up a recent development that TUI announced in September for Oman in the Middle East as an example.
“Even though each of those brands targeted different customer segments, all those hotels can share opportunities, the experience, the system, and our operational know-how,” she said. “With all those successful stories we have done in Cape Verde and Italy and in Greece, we’re trying to bring the same model to the Asia Pacific region in the future.”
Delivering historic hotel experience requires constant upkeep, communication with ownership
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