In an interesting piece I read today, a Hyatt Regency hotel is suing Hyatt corporate over the approval of a newly-constructed Hyatt House hotel that opened just a block away. The Hyatt Regency in Jersey City used to be the only game in town since its opening in 2002. It is an easy ferry ride or PATH train ride from Manhattan and situated right on the Hudson River.
The folks at the Hyatt Regency Jersey City apparently didn’t feel threatened by a Hyatt House franchise potentially in very close proximity to their location, as Mack-Cali, the Regency franchisee, signed an agreement allowing construction of the new hotel, something that is part of their contract with Hyatt. Now they are suing Hyatt on the grounds that Hyatt did not disclose that the new hotel would compete for business.
I mean, c’mon. Two hotels, one block apart, same chain. Zero potential for overlap of clientele, right? Not sure how the Hyatt Regency didn’t think this would impact their business at all.
The details of the lawsuit argue that the Hyatt House is not your typical Hyatt House, with a greater number of rooms than most and other amenities that make it more of a full service hotel. This would let it compete directly for Hyatt Regency business.
Hyatt House is just…better
I’m surprised the Hyatt Regency Jersey City didn’t see this coming. I mean, if I was a business or leisure traveler, I can pretty much guarantee that I’d choose the Hyatt House over the Hyatt Regency. For starters, I’m almost certainly guaranteed more space, as Hyatt House rooms and suites generally offer an above-average amount of space. Plus, I’d have a full kitchen. And there is the added benefit of free breakfast even if I don’t have Globalist status (as long as you book direct).
Not to mention the Hyatt House is just a couple years old, while the Regency is over 15 years old. Whenever given the chance, I definitely like to stay at a newer hotel. I stayed at a months-old Fairfield Inn and Suites in Salem, Virginia for work last year, and it was one of the nicest places I’ve ever stayed in terms of room quality.
Sure, the Regency is a more upscale brand, but not all business travelers are looking for this. And leisure Hyatt loyalists will probably be primarily concerned about rate. Rates are generally better at the Hyatt House.
Conclusion
I can sympathize with the Hyatt Regency, though. It seems like they didn’t think through how much revenue they would lose. Plus, it sounds like this Hyatt House isn’t a normal Hyatt House. I’m not sure what the outcome of the lawsuit will be, but given that the Hyatt Regency signed the agreement to permit the Hyatt House just a few hundred feet from their location, I don’t expect it to be in their favor.
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This doesn’t sound crazy at all.
The only “crazy”part is that the Regency owner did not request and/or examine the plans for the new property. If in fact, the “representations” of what they were going to build and what they eventually built were different, they may have a case. Otherwise, tough stuff.
Having owned two non-hotel franchises in the past, I often chuckled when owners complained that another franchise opened near them with the franchisor approval.. They alway lost sight that every competitor in the world could open across the street without any approval.