I.

Executive Summary

This report provides a critical overview of Hyatt Hotel Corporation. The purpose of this paper is
to provide its readers with a current and accurate portrayal of The Hyatt Hotel Corporation along
with its placement within the Tourism and Hospitality Industry, specifically lodging. This is
done through extensive research and analysis which has been compiled and is depicted below
through the use of tables, charts and figures. The strategies implemented, recommended and
discussed herein are the opinions of its authors. With this stated, we do not imply that the follow
through of these strategies will come to these specific results.
The current operations, performance and policies of Hyatt have made this company a leader in
the Lodging Industry. That being said, there is ample room for growth and development.
The new mission statement and creation of a vision statement will provide Hyatt with a
reinforced sense of direction and purpose that will result in our employees continuing to offer the
highest level of service. We have clearly outlined the factors that set Hyatt apart from its existing
competition. Additionally, in review of our SWOT analysis we have identified multiple areas of
improvement through our existing opportunities, particularly with expansion into foreign
markets with high growth. Hyatt strengths have been shown in the recognition of Hyatt brands,
and strong customer loyalty.
Moving forward the plan for Hyatt includes both short- and long-term strategies, including the
acquisition of Starwood Hotels and Resorts, the creation of pet care facilities in our hotels, a
rental car service on-site, the inclusion of Roku in rooms, and implementing a green initiative to
lower costs. Each strategy is beginning in 2014, and the strategic assessments show growth for
the company.
After the acquisition of Starwood, our future projections show market penetration and expansion
which will give Hyatt more market share in the long-term. The Company Life Cycle after the
implementation of our proposed strategies shows Hyatt experiencing growth, while each
competitor remains in maturity.
The industry and company assessments show that Hyatt is going to increase profitability for its
shareholders, increase market share, and move towards becoming the industry leader. Overall,
the proposed recommendations are made to bring Hyatt to the number one spot in the lodging
industry and give the company secured success in all of its operations.

Sincerely,

Hyatt Hotels, Corp. Development Team

1
II. Hyatt’s Past & Current Strategies

Past & Current Strategies

Hyatt Hotel Corporation's (NYSE: H) business strategy has been more or less the same over its

lifetime, with the exception of it's new “feedback strategy.” They have several brands that

appeal to different, distinct customer segments ranging from their luxury line of hotels, the Park

Hyatt, to their more budget-friendly stays, the Hyatt Regency. For the extended stay consumer,

they have the Hyatt House to accommodate, what they call, residents rather than guests. Hyatt

targets these separate consumer segments through analysis and application of data and analytics.

They use sophisticated, quantitative strategic analytics and predictive modeling to identify the

most profitable customers and, therefore, maximize potential revenue.

Current Vision, Mission, & Strategies

The mission statements for Hyatt is very vague and they have no existing vision statement. Refer

to Appendix A for the identified mission statement, goals and values. Hyatt is dedicated to

providing a level of hospitality that positively impacts the lives of its customers.

In May of 2013, Hyatt expanded on their strategy by hiring four marketing professionals of

outside industry brand experts and hospitality professionals to leadership positions to enhance

the company's global brand-led focus. Additionally, Hyatt has begun to target the segment of

female travelers by going as far as to have marketers intercept women customers in the lobbies to

ask about their travel needs and whether they are being met. They have also been using a

promotional campaign, called the Listening Loop that includes an ongoing, real-time dialogue

with Hyatt guests through Twitter, Facebook, and Branch to figure out what needs to be changed.

2
New Vision & Mission

To satisfy our company’s vision as an industry leader, we have taken a more aggressive and

optimistic approach in our mission and vision. The new mission and vision provide emphasis on

The Hyatt becoming a premier site for travel worldwide based on customer satisfaction and top

of the line accommodations through numerous implementations of culture, services, and

acquisitions of competitors. See appendix A for the New Mission and Vision Statements.

III. SWOT & Environment Analysis

Hyatt’s SWOT Analysis

Hyatt’s key strengths are a strong brand image with its business travelers, a loyal customer base,

nation-wide locations, a customer benefits program, and a disciplined financial approach giving

the company a strong capital base. The Hyatt’s brand image is a major strength in the business

travel market that consistently meets the expectation of quality world-wide. Though nationwide

locations and its loyal customer base, the Hyatt has an extremely high rate of customer retention.

Incentives are plentiful with the Gold Passport Program and the company has been able to

sustain effective operations during the economic recession.

The weaknesses of The Hyatt are its limited number of locations compared to competitors, a

focus on upper-middle class travelers, and a slowdown of investment growth during the

economic downturn. Though The Hyatt has locations in most major business cities, it lacks the

number of hotels in these locations. As far as the company’s focus, The Hyatt targets the upper

class. Out of The Hyatt’s control, the global economic downturn, beginning in 2008, reduced the

amount of business travel and tourism, due to declining business revenue and personal income.

3
The Hyatt has much opportunity with the shortage of hotel accommodations in India and Asia, as

well as an emerging hotel market in Central and South America. India and Asia are seeing an

increased demand for upper class accommodations for both business travelers and exposition

spaces. Also, basic opportunities like the need for roadside accommodations is rising due to the

cost of high-priced air travel. The Hyatt also sees increased opportunity in the demand for

branded residential units under the “Hyatt Residence Club”.

Threats to The Hyatt are as simple as economic conditions, political instability and/or

government restrictions, increased fuel and travel costs, changes in operation costs, and

competition for guests. All of these threats can negatively impact revenue and decrease the

customer base.

Hyatt’s SWOT Matrix

The Hyatt has compiled a number of strategies in the SWOT Matrix, found in Appendix B.

Certain strategies from strengths and opportunities include: expanding operations in developing

business cities and implementing a mobile app for travelers showing nearest property and

available accommodations in real time. Breaking through weaknesses, the company can afford

to renovate existing properties to better match ‘long term stay’ needs. During economic

downturns, other strategies include a focused marketing strategy targeting customers in countries

where exchange rates would make travel to Hyatt properties a better value.

Wyndham’s SWOT Matrix

Wyndham Worldwide Corporation specializes in lodging, vacation exchange and rentals, and

vacation ownership. They serve as one of one of the world’s largest hospitality companies with

4
7,440 properties across the globe. They are the industry leader in “green” programs and have a

significant presence in the major hospitality markets. Weaknesses include a small exposure to

emerging markets, India specifically. The Wyndham group possesses a very weak brand identity

in European markets and caters to a mainly middle class and economy travelers.

Starwood’s SWOT Matrix

Starwood Hotels and Resorts Worldwide carries a strong brand image globally. Starwood serves

as a preferred guest for American Express, and has a strong and recognizable customer benefits

program. The company is a host to nine affiliated brands and second in the lodging market share

behind only Marriot. Weaknesses reside with expensive costs, inconsistent upgrades per

property, and a broad focus group targeting high-class business consumers and leisure travelers.

Marriot’s SWOT Matrix

Marriott International is the industry leader in market share with over 3,800 properties

worldwide. Operating in 74 countries, Marriot carries a strong brand image and has several

strategies in place to maintain their status. Strategies include a service package tailored to low-

income, a loyalty program for expanding markets, like India, and price match guarantees to

maintain leadership in the industry. Weaknesses include the lack of a low cost brand and the

uncertainty around the launch of the “Edition” hotel brand.

Macro-economic Factors & Hyatt

The economic crisis, beginning in 2008, has undoubtedly had an extreme effect on travel, both

business and personal. Beginning in 2010, Hyatt Hotels Corporation has turned the income

deficit around by making strong and substantial financial gains. Domestic growth is

recuperating, yet at a very slow pace. With little chance of another recession, it is an opportunity

5
for expansion, investment, and ultimately—growth. Hotelnewsnow.com reports a promising

improvement in the U.S. economy and the health of the lodging sector (Hotel News Now). The

hotel industry remains very dependent on macroeconomic factors out of anyone’s control. Four

main factors that influence the hotel industry include: US monetary policy, the European Union

debt crisis, Chinese GDP growth, and the price of oil. For the foreseeable future, and until there

is more clarity and stability in these areas, the hotel industry will continue to see a slow, yet still

increasing turnaround in business and revenue.

IV. Hyatt’s Organizational Structure

Current Organization

The Hyatt Corporation currently has a fairly flat organization that is well suited to its world-wide

distribution. ‘Global Presidents’ control operations in their region providing a better span-of-

control, along with a more responsive management to the unique demands in the respective

region. Regional managers oversee general managers of individual hotels.

The Hyatt underwent a restructuring in August of 2012. The reorganization involved realignment

of the company’s operations and management changes. CFO Harmit J. Singh was replaced with

Gebhard F. Rainier, who originally managed the EAME operations. The Hyatt also created a

global operations center to support newly defined operating regions of Asia, the Americas,

Africa and the Middle East.

The Global President of each of the region and the Global Operations Center fall under the CEO

Hoplamazian. The regional operations are supported by the new Global Operations Center,

which will oversee the disbursement of this support to ensure the resources are being used

efficiently.

6
Proposed Organization

The 2012 restructuring answered many of the shortcomings of the previous organization

structure, creating more responsive regional control over operations. Our proposed changes to

the current organization are to integrate selected Starwood leadership to leverage their

knowledge in Hyatt’s weak areas.

The first change is to remove current Hyatt President and CEO, Mark S. Hoplamazian, from the

Board of Directors in order to comply with the Sarbanes–Oxley Act. His Board position will be

filled with the current Starwood CEO, Frits van Paasschen, as the new non-executive chairman.

Phil McAveety, current Starwood chief brand officer, will be brought on under current Hyatt

Brand Strategy Officer John Wallis. Phil McAveety was responsible for the successful branding

of Starwood brands and oversight of their loyalty. He will be an asset to the Hyatt’s proposed

customer loyalty initiatives. Starwood’s Global Initiatives Officer, John Peyton, will be brought

on to assist. Osvaldo V. Librizzi will be brought in as a consultant to the Hyatt’s Americas

Operations for Latin America. Likewise, Stephen Ho will be brought on for Asia Pacific

Operations.

The Hyatt, with these changes, will be more adaptable to regional needs by increasing regional

knowledge and giving more decision-making authority to managers in direct contact with hotel

guests and owners. The current organization chart and proposed organization can be found in

Appendix C.

7
V. Hyatt’s Unique Position

Key Success Factors

Hyatt’s recipe for success involves several different critical success factors. These factors decide

whether they will survive or not in the lodging/hospitality industry. Hyatt Hotels Corporation

specializes in six key success factors: (1) location; (2) customer service; (3) quality management;

(4) product differentiation; (5) cost control; and (6) the ability to match or beat competitors with

attributes. The first five factors are quite self-explanatory, but in regards to the sixth, Hyatt must

be profitable relative to its rivals and increase brand image, reputation, and their bargaining

power with suppliers. Controlling these factors appropriately can definitely help Hyatt’s success

in the long-run.

Distinctive Core Competencies and Core Competencies

Currently, Hyatt has no distinguishable distinctive core competencies that in not easily replicated

and sets them apart from their competitors in the market. They do have core competencies such

as their global reach, reasonable prices and outstanding services through their loyalty program.

Hyatt has 535 properties in 47 different countries. (“Competitive Strengths”) In the past quarter

alone in 2013, Hyatt has aggressively expanded overseas with 11 new hotels while still

increasing their profit to $55 million up from $23 million, only a year earlier. (Tadena) Hyatt is

by no means a low-cost, economy-traveler motel chain; it is a 4-star hotel chain that achieves

cost differentiation (from other 4-star hotel chains) through its quality brand image (which is

increasing through expansion) and loyalty from frequent customers. Their loyalty program, the

Hyatt Gold Passport Membership, is one of the most preferred in the hospitality industry. This

program is designed to retain loyal customers while also reaching out to new, prospective guests

8
through three levels of membership: (1) Gold, (2) Platinum, and (3) Diamond Passports that

include free stays, late check-outs, access to exclusive Hyatt club lounges, and other special

benefits that keep customers coming back for more. (“Gold Passport Membership Overview”)

Value Chain Analysis

Hyatt Hotels employs a variety of strategies to keep the company ahead of the competition. As

seen in Appendix D, primary activities and costs include inbound logistics, operations, outbound

logistics, marketing and sales, and service, while the support processes compose of the firm

infrastructure, human resource management, technology development, and the procurement of

resources. Hyatt operates more than 535 properties through deep culture and experienced

management teams. Customers reserve rooms through Hyatt's enhanced central reservation

system, SPIRIT, (centers located in the United States, Australia, India, UAE, Germany, Japan

and China) that is partnered with several travel agencies. Hyatt customers arrive at one of

Hyatt's properties and are greeted by highly knowledgeable staff, of whom have all been through

training programs, and are taken to their guestrooms to enjoy certain amenities such as in-room

WI-FI, the Hyatt PlugPanel, toiletries provided by June Jacobs, KenetMD, Le Labo and bedding

provided by Portico. The Hyatt Gold Passport program keeps the guests returning as the loyalty

program is aimed at providing a superior level of service, recognition and customer experience to

Hyatt's most loyal and valuable guests.

VI. Market & Competitive Analysis

Porter’s Five Forces Model of Competition

By using the Porter’s Five Forces Diagram shown in Appendix F, The Hyatt can identify the

principal forces in the lodging industry that have a direct effect on the company. The greatest of

9
these forces is the industry rivalry. Number of competitors, and product differentiation

challenges are apparent in an industry where there are several hotels on every corner. The

second most influential force was the buyer power. The lodging industry services the customer

directly and it is up to the customer to choose which hotel to use. Internet booking allows for a

wide variety of hotels to choose from, much of which offer the same kind of amenities. With

real estate costs down, the threat of new entry is relatively high, along with a high saturation of

competitors in the market region. An advantage for the Hyatt is the relatively low impact of

supplier power. Costs are low across hotel supplies, utilities, even the cost of changing services.

Strategic Group Map

Analysis of The Hyatt produced two strategic group maps that can be found in Appendix G. The

graphs conducted a comparison against Diamond Resorts, Wyndham, Starwood, and the market

leader: Marriott. The pre-recommendation showed Marriott as a strong market leader in ‘Room

per Property vs. Employees’ as well as ‘Number of Countries vs. Properties’. The Hyatt was

closely related in market share with Wyndham, while each falls behind Starwood.

After the acquisition of Starwood, The Hyatt now has a market share comparable to Marriott,

while having fewer employees, and more locations in many more countries. The Hyatt is now a

dominating force amongst the top competitors.

Competitive Strength Assessment

IE Matrices

As seen in the IE Matrices in Appendix H, internally, in terms of strengths, The Hyatt scores

very high compared to its competitors. A strong focus and high rating on The Hyatt’s strong

brand image is key. Factors like marketing campaigns as well as a location base need to remain

10
constant. The focus of post-recommendation is on the customers of The Hyatt. By increasing

the focus to the customer base as well as the Gold Passport Rewards program, The Hyatt sees an

increased rating as well, leading to an increased score, still well above any competitor.

The Hyatt sees a low to average rating of the company’s weaknesses. The Hyatt will improve its

ratings by implementing a greater focus on expanding to limited locations, especially with the

acquisition of Starwood, its declining capital investment, and exposure to premium markets. By

implementing these changes, the Hyatt will again see its score improve to a more moderate level.

In regards to the EFE, The Hyatt will improve its scores by focusing on expansion in targeted

growth markets, as well as on the company’s ability to diversify, and increasing branded

residential units.

GE Nine-Cell Planning Grid

The assessment of the Nine-Cell Planning Grid showed Marriott as a front runner with over

twice the market share of The Hyatt. The Hyatt was as expected almost equivalent to Wyndham,

following behind Starwood. While Marriot and Starwood were both on the border of the cells to

invest or grow, The Hyatt was in between grow and grow or let go.

From the current position, The Hyatt was in a poised position to make a strong move. With the

planned acquisition of Starwood Hotels and Resorts, The Hyatt boosted its market size, saw an

increase in projected growth, and saw a great return score on availability of locations and

customer service. Post-implementation, The Hyatt is now close to equivalent with Marriot in

market share and higher in the invest cell. Nine-Cell Planning Grids can be seen in Appendix I.

BCG Matrices

11
Based on the BCG Chart, seen in Appendix J, Marriott is the flagship in the lodging industry

with a cash-cow/star position. As previously expressed, The Hyatt is in a position to make a

strong move. The company currently sits in the question mark quadrant. However, change is on

the way very quickly with the acquisition of Starwood. By nearly tripling market share around

the globe, as well as other customer friendly services to be offered, The Hyatt will be the

brightest star in the sky post-implementation.

Company Life Cycle

As seen in Appendix K, The Hyatt has reached the early stages of maturity in the company life

cycle. However, with increasing revenues, and an industry that is back on its feet, The Hyatt is

in a position for growth.

Competitors like Marriot and Wyndham are also currently in the maturity stage. Post-

turnaround, by global expansion through acquiring Starwood, The Hyatt will position itself in the

growth stage while other competitors remain at maturity.

Space Matrix

Based on the SPACE Matrix, as found in Appendix L, The Hyatt is in position to make an

aggressive move. Through the company’s analysis and strong ratings of financial strength and

industry strength, the SPACE Matrix backs up and supports the company’s maneuver to acquire

Starwood Hotels and Resorts. Starwood has twice as many properties as the Hyatt, but the move

is more than based on the current status of the company.

Grand Strategy Matrix

Based on the results of the Grand Strategy Matrix, found in Appendix R, Hyatt falls within

Quadrant I. This locates them in a rapidly growing market with a strong competitive position in

12
their market segment. The strategies for the Hyatt in Quadrant I to be considered include market

penetration in developing regions, development of current properties, and expansion of more

diverse services. These are achieved through the plan to acquire Starwood and our

implementation of a Pet Service, providing a Roku for guests, and adding a car service on

location. With Marriott as the Hyatt’s largest competitor, these strategies are designed to make

the Hyatt competitive while stealing valuable market share.

VII. Financial Analysis

Edward Altman Z-Score

Hyatt’s Edward Altman Z-score for 2012 of 2.40 is found in Appendix M. There you will also

find the companies last 3 years of score showing a consistent score of above 2.39 putting us out

of the “danger zone”. The mean of these scores is 2.72 and the standard deviation is .4479.

While this is not a horrible, it does indicate that changes need to take place within the company.

Trend Analyses

In reviewing trends it can be seen that with the exclusion of Wyndham, Hyatt and its competitors

took a hit in ROE Margin in 2009 which can be seen in Appendix O. The decline in the

EBITDA margin is associated with the economic crisis of 2008 which would result in less travel

and hotel stay. It is estimated the Wyndham was less affected because of their lower price brands

such as Super 8 and Days Inn. It can be observed that Hyatt is moving consistently with the

Industry average in recovery of EBITDA, along with Starwood and Marriott. Hyatt’s

profitability has remained consistent over the last few years with slow growth towards recovery.

In viewing ROE it can be seen that Hyatt has had little to no improvement since the drop in

2009. In comparison, Marriott, Wyndham and Starwood have been able to swiftly recover

13
indicating that they have had in increase in net income relative to their use of equity where Hyatt

has not. In regards to ROE, Hyatt can also catch up with Wyndham’s (19.17) progress through

an increase in operating efficiency. Currently Hyatt has a lower Debt to Equity Ratio than many

of its competitors indicating that they are in a healthy financial position to increase funding

through the use of debt.

Revenues, Expenses, & Net Income

Hyatt’s revenues are broken down with around 51% (Appendix P) coming from our Owned and

leased hotel services. While 39.07% of revenue comes from managed properties, this does not

increase our net income because of the corresponding cost associated with them. The Hyatt has

seen a slow but steady increase in revenue, expenses, and net income the past three years. It can

be seen that while we have slowly lowered our total cost in relation to our total revenue, Hyatt’s

net income has actually gone down. In review our breakdown of total expenses, our percent of

costs from owned and leased hotels has been slowly dropping showing an increase in our

efficiencies. When reviewing the acquisition of Starwood, we compared ourselves to them based

on financial ratios. It can be seen that they have been able to reduce their cost of revenue, selling

general and administrative costs and other costs in comparison to total revenue. This results in

them being able to maintain a higher percentage of their net income.

When reviewing Hyatt’s total revenue by quarter, it can be seen that there is some seasonality to

our income. This is apparent with the jump in total revenue during the second quarter showing an

increase in hotel stay between the months of April and June of the past 3 years followed by a

corresponding decline in the third quarter. This follows the logic of travel increasing during the

summer vacation months. It can be assumed that Hyatt is less impacted by seasonality then

others in this industry because of our addition business travel.

14
EBIT/EPS Analysis

In order to implement our strategies, a financing package of $6,594,735,624.00 is necessary.

Based on the EBIT/EPS analysis found in Appendix T, it can be seen that the best means of

financing would be through the issuance of common stock. This would help us retain the highest

EPS through the economic conditions of recession, normal and boom. While other financing

packages were reviewed, based on the interest rate for the issuance of long term debt, the overall

interest expense incurred would result in a negative earnings before taxes in all economic

conditions. The funds would be mainly used for the following recommendations: acquisition of

Starwood for $6.550 billion, the implementation of Roku for $1.127 million, the renovation and

staffing of our pet facility for $4.495 million, and the starting of car service for 8.320 million.

Pro Forma New Strategy Implementation

Before the planned recommendations Hyatt’s historical income statement has generally shown a

positive net income. However, after analysis of Starwood and observing their cost efficiency and

higher net income as a percent of revenue Hyatt should be able to lower its operational costs.

Also with implementing synergies with Starwood, the overall costs for both hotels are estimated

to drop close to 5%. The other strategies of adding a pet service, car service, and providing a

Roku system for guests should diversify us from competitors and allow us to capture more

market share. This is estimated to significantly raise revenues over time. Our Pro Forma income

statement, shown in Appendix U, projects us not only to increase revenues dramatically with the

acquisition of Starwood in 2014, but also continue to grow overtime through our own unique

strategies to capture market share and put us in good position to potentially become the industry

leader.

15
Net Worth and Stock Price Analysis

Hyatt’s current net worth was estimated at $2.76 billion. However, after implementing our new

strategies and acquiring Starwood in 2014 our new net worth was projected at $18.85 billion.

This is mainly due to our dramatic increase in net income. After 5 years The Hyatt’s net worth

has been calculated to be an estimated $35.64 billion. This is largely due to our increase in cost

efficiency as well as more than tripling our market share. Our stock price however will drop

from approximately $48 dollars to $14 dollars in 2014. This drastic drop is due to the issuance of

approximately 137 million shares in order to fund our acquisition of Starwood. However, the

stock is projected to recover slightly over the next 5 years reaching approximately $34 per share

in 2018. This can be viewed in Appendix S. The analysis of net worth for the acquisition of

Starwood was done through a Valuation template that uses historical data to project the trends of

the company and estimate the present value of future cash flows. This can be seen in the email

sent to Prof. Anderson.

VIII. Recommendations & Implementation

Short Term Recommendations

The Hyatt is planning on several immediate actions that will have instant impacts on the

company. The company will begin with cultural changes such as a new mission and vision, as

well as an Environmental Awareness Program which will help reduce some cost associated with

owned hotel properties. These will be implemented in the first two months. Other

implementations to be incurred within the next 12 months are financial such as reevaluating our

stock repurchase program, the acquisition of Starwood Hotels and Resorts and a reorganization.

16
The company will also undergo an immediate website renovation along with training and

development for customer service, cross training, and green culture training.

Long Term Recommendations

Not only does the Hyatt have strong short term goals, the company will also be implementing

several customer value-based and marketing strategies to keep the company a market leader.

Such strategies like the implementation of Roku in rooms will serve as a multi-year amenity. Pet

service and a fleet of rental cars will be put into place to serve customers for many years to come

and provide a diverse service keeping us ahead of our competitors.

QSPM

The company developed a Quantitative Strategic Planning Matrix to compare the attractiveness

of each proposed implementation. The acquisition of Starwood scored well above the

acquisitions of the Morgan and Diamond hotel chains. Expansion in India, China, and Latin

America was also outscored by the strong acquisition. The next strategy to be implemented is

the addition of car service to the hotel, outweighing the proposed chartered flights strategy. The

pet service was a favorite over a reimbursement package for baggage fees—the company felt this

would attract more customers and was more economically viable. Also our decision to

implement the Roku system in hotel rooms beat out the strategy of providing Netflix to all

customers mainly due to profitability potential. The QSPM charts can be found in Appendix Q.

Balance Scorecard

The main growth objectives of the Balanced Score Card, as seen in Appendix W is to increase

the number of young business professionals, increase number of locations world-wide by

acquiring competitors, and expand into new countries. Implementation of these should be

17
completed by 2017, 2018, and 2020, accordingly. As far as financial costs, the company plans

on decreasing operating and administrative costs, doubling the stock price, and increased

profitability through growth and acquisition.

Timeline

The newly implemented strategies will begin taking place in January 2014. From a company-

wide cultural standpoint, The Hyatt’s new mission and vision, and well as the environmental

awareness program will be integrated within two months. The company’s financial

implementations will begin in February of 2014 with the reevaluation of our stock repurchasing

program, followed a month later by the acquisition of Starwood Hotels and Resorts. The

acquisition of Starwood is projected to be complete by September of 2014. Marketing ventures

including: website renovation, social media marketing, channel distribution optimization, and

advertising for our new amenities will begin immediately and be completed by the end of 2016.

Customer value implementations including the Roku service, pet service, and car services will

begin immediately and continue through 2016. The Roku service will take only 3 months to

complete and be finished by March of 2014. Pet accommodations will take priority to the car

service. The renovations for pet facilities will begin in March of 2014 while car purchases and

insurance policies will not start until May of 2015. Services will continue indefinitely. See the

Gantt chart and estimated costs and revenues from these strategies in Appendix V.

IX. Sources of Resistance

With the implementation of the recommendations listed above, Hyatt Hotels Corporation may

encounter a variety of difficulties, some being out of the company’s control. The most probable

source of resistance would come from general economic conditions around the globe. For

18
example, in 2009, Hyatt experienced a drop in revenue and customers due to the recession in

America which caused a worldwide problem.

If Hyatt is unable acquire Starwood Hotels and Resorts, the company has prepared a contingency

acquisition of Morgan Hotels. Another part of the plan to invest in global expansion, but the

company may not be able to build a framework of branches to compete with competitors like

Marriott. By acquiring Starwood Hotels and Resorts, The Hyatt now has three times as many

hotels under its name. By adding properties, there is significant upkeep and with more hotels,

more room for error. The Hyatt prides itself on quality and must maintain optimum quality in all

areas with every single one of its hotels.

By adding a pet service, there are few, but significant, forms of resistance. Certain insurances

must be in place, such as liability coverage for pets, as well as added expense for damages

caused by animals not covered by an agreed-upon security deposit. For the newly implemented

car service, the 500 cars that The Hyatt has purchased will fit under a “fleet” insurance policy.

X. Contingency Plans

If The Hyatt is unable acquire Starwood Hotels and Resorts, the company has prepared a

contingency acquisition of Morgan Hotels. Morgan has only 13 properties worldwide, but is

currently has plans for building 35 more. Though small in number, each hotel is unique, top of

the line, and a great representation of its host city. Morgan Hotels would make a slight, but

quality addition to The Hyatt.

The Hyatt already offers a service providing the customer with pet-boarding businesses in the

area of the hotel. If pet accommodations aren’t implemented, this service will continue. As a

contingency for car services, The Hyatt is currently a sponsor of Avis car rental and will

19
continue customer recommendation to Avis should the car service fleet not be implemented.

There is clearly a fall back of all of our proposed changes, though the company plans to see all

proposed plans followed through to their highest potential.

XI. Epilogue

The Hyatt is currently planning expansions in China and Central and South America. The

company has recently built a flagship resort in Mexico City to serve as a gateway merging North

and Central/South America. The company currently has a three-tier customer benefit program

that provides free nights’ stays and certain amenities and services based on points’ accumulation.

The main customer benefits is based on the current rewards program. We recommend a more

aggressive plan. The Hyatt is encouraged to acquire competitors in opposition to expansion. By

acquiring Starwood Hotels and Resorts, The Hyatt adds established, quality hotels to its list of

properties, while eliminating competitors. By adding additional amenities to each hotel in the

form of pet accommodations and car service, the company is providing useful services that a

customer can enjoy as an included benefit by choosing our hotels.

20
XII. References

(CEO), Arne M. Sorenson. Marriott Annual Reports. 20 Febuary 2013. 29 October 2013
<http://investor.shareholder.com/MAR/secfiling.cfm?filingID=1445305-13-255>.

(CEO), STEPHEN P. HOLMES. SEC Filings, Annual Reports. 15 Febuary 2013. 1 November 2013
<http://phx.corporate-ir.net/phoenix.zhtml?c=200690&p=irol-
SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg3MzMzNTU
mRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d>.

Area, Boarding. Loyalty Traveler. 20 June 2013. 12 November 2013

<http://boardingarea.com/loyaltytraveler/2013/08/02/guide-to-hyatt-and-las-vegas-m-life-benefits/
#sthash.FfWUIRpm.WhK10eRW.dpbs>.

Chipkin, Harvey. Hotel News Now. 18 November 2013. 18 November 2013

<http://www.hotelnewsnow.com/Article/12685/Hyatt-all-inclusive-play-comes-with-challenges>.

Hotels, Starwood. Brand Content. 8 April 2013. 5 November 2013

<http://www.starwoodhotels.com/Media/PDF/pro/brand_content_PDF.pdf>.

Hyatt. Gold Passport Points. 20 Febuary 2013. 2 November 2013

<http://hyatthotels.hyatt.com/content/partnerlandingpage/en/goldpassport/mlife.html?
icamp=hy_vegas_gpfi2_en_non>.

—. Hyatt Investor Relations. 6 November 2013. 15 November 2013

<http://investors.hyatt.com/phoenix.zhtml?c=228969&p=irol-govmanage>.

—. Hyatt Investor Relations. 6 November 2013. 15 November 2013

<http://investors.hyatt.com/phoenix.zhtml?c=228969&p=irol-govboard>.

—. Instagram. 3 May 2013. 8 November 2013 <http://instagram.com/hyatt>.

21
—. Purchase Points. 20 Febuary 2013. 30 October 2013
<https://buy.points.com/PointsPartnerFrames/partners/hyatt/container.html?
language=EN&product=BUY&CAMPAIGNCODE=HYongoingspecialssearchBKFLP>.

Mariott. Investment-Real Estate. 20 Febuary 2013. 29 October 2013 <http://www.marriott.com/hotel-

development/investment-real-estate.mi>.

Paasschen, Frits van. Starwood Hotels Annual Reports. 18 April 2013. 5 November 2013
<http://development.starwoodhotels.com/writable/resources/2012_hot_annual_report.pdf>.

Resorts, MGM. Preffered Partner. 20 June 2013. 12 November 2013

<http://www.mgmresorts.com/hyatt/>.

Resorts, Starwood Hotel and. Starwood Hotels Leadership Team. 6 November 2013. 15 November 2013
<http://www.starwoodhotels.com/corporate/about/leadership/index.html>.

Starwood. Investor Relations, Investor Overview. 8 April 2013. 5 November 2013

<http://www.starwoodhotels.com/corporate/about/investor/index.html>.

Worldwide, Wyndham. Company Overview. 14 Febuary 2013. 20 October 2013

<http://www.wyndhamworldwide.com/investors/company-overview>.

—. Enviroment. 15 Febuary 2013. 18 October 2013 <http://www.wyndhamworldwide.com/corporate-

responsibility/wyndham-green>.

—. Mission-Culture. 15 Febuary 2013. 20 October 2013 <http://www.wyndhamworldwide.com/about-

wyndham-worldwide/mission-culture>.

22