Hyatt buys Mr & Mrs Smith boutique hotel platform, hotels to leave IHG?

In a surprise announcement this morning, Hyatt Hotels has announced the acquisition of the Mr & Mrs Smith hotel booking platform.

The cost is £53 million, reflecting the ‘asset light’ nature of the acquisition (ie the company doesn’t actually own any hotels, although it does have 100 staff).

Participating hotels from the 1,500 bookable via Mr & Mrs Smith will appear on hyatt.com and will presumably be ‘earn and burn’ partners for World of Hyatt points.

This is highly likely to mean that the existing deal with IHG One Rewards will be scrapped.

Hyatt said in a statement:

“We are excited by this planned acquisition and to explore bringing guests and World of Hyatt members even more global luxury offerings across hundreds of geographies – including over 20 countries where there are currently no Hyatt hotels such as Fiji, Croatia, Iceland and Anguilla.

Founders Tamara and James Lohan alongside their impressive team have built the ultimate global direct booking collection of truly unique stay experiences including rooms located in treehouses, within caves, and underwater suites. Importantly, we see a lot of synergy between our collective ethos of care, and we look forward to working together to bring our shared focus to new, memorable stay experiences for guests and World of Hyatt members – and introduce new guests to Hyatt hotels around the world.”

There are apparently 1 million ‘members’ of the Mr & Mrs Smith booking club, which Hyatt hopes to leverage into World of Hyatt.

The deal will not reach legal completion until ‘the second quarter’.

Hyatt has said that it will offer:

“direct booking access to properties within the Mr & Mrs Smith platform through Hyatt’s distribution channels, including Hyatt.com and the World of Hyatt app.”

In terms of ‘earn and burn’, Hyatt has only said that it is ‘exploring’ ways to enable World of Hyatt members to earn and redeem points across eligible hotels in the Mr & Mrs Smith collection.

What happens to IHG?

There is no reference to the existing IHG arrangement in the press release. However, I strongly recommend that if you were planning to redeem IHG One Rewards points at a Mr & Mrs Smith hotel, you should do so sooner rather than later.

You shoud expect reward bookings made for dates after completion of the Hyatt deal to be cancelled so don’t make a points booking for later in 2023 unless you are prepared for disappointment.

At present, Mr & Mrs Smith redemptions are among the best uses of IHG One Rewards points. You get around 0.55p based on the cash rate, well above our target 0.4p valuation of an IHG point.

I can’t help thinking that IHG has dropped the ball here. Even if it felt that the Hyatt offer was a bit rich, it is a relatively small sum of money in the overall IHG context. Overpaying may have been worth it to keep the hotels on the IHG platform, and any issues that IHG may currently have could presumably have been smoothed over if it owned the business outright.

The original Smith deal took IHG into 14 countries where it didn’t previously offer a single property. Whilst some of those gaps may have been filled in the last four years, I would imagine it will still reduce IHG’s global coverage noticeably.

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