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The Hyatt story: How a packed LAX motel and a $2.2 million offer scribbled on a napkin spawned one of the world's biggest hotel empires
The Hyatt story: How a packed LAX motel and a $2.2 million offer scribbled on a napkin spawned one of the world's biggest hotel empires
Taylor BordenFeb 13, 2020, 23:47 IST
In late January, Hyatt released a statement announcing the expected opening of 50 new hotels and resorts by the end of 2020 - and an additional 140 by 2022.
The company is particularly focusing on growth within the luxury sector.
Currently, the Hyatt has 20 brands, 875 properties, and 100,000 employees - and the founding family is one of the richest families in the world, with 11 total billionaires.
The chain has been around for 62 years - the first Hyatt location was purchased on a whim by a businessman in 1957.
Right now, there are over 200,000 Hyatt hotel rooms.
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Those rooms span 20 brands and 875 properties and are supported by 100,000 employees worldwide - and there are about to be a whole lot more of them.
In late January, Hyatt Hotels Corporation announced the expected opening of more than 50 hotels in 2020 and 140 additional hotels by 2022. In December, Hyatt announced that 20 of those new hotels will specifically contribute to its luxury portfolio.
The Park Hyatt, the chain's first luxury brand, is celebrating its 40th anniversary this year. But the very first Hyatt was purchased over a decade prior to the founding of Park Hyatt, in 1957, when a well-to-do Chicago lawyer took a business trip to Los Angeles that resulted in him buying the hotel closest to the airport, mostly on a whim.
Today, his family is one of the richest in the world, with 11 total billionaires - nine of whom are on the 2019 Forbes 400 list of the wealthiest people in America.
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A spokesperson for the Hyatt didn't immediately respond to a request for comment from Business Insider.
Keep reading for a closer look at the history of the Hyatt hotel empire.
In 1957, a Chicago-based lawyer took a business trip to Los Angeles that resulted in the purchase of the hotel closest to the airport.
Jay Pritzker was working for his family's Chicago law firm as a lawyer and accountant when he took a business trip to Los Angeles in 1957. While there, he noticed the hotel nearest to the airport had no vacancies.
At the time, he felt there was a market for high-quality hotels near large airports, specifically to ameliorate business trips. The thought resulted in Pritzker scribbling a price on a diner napkin ($2.2 million) and leaving as the owner of the Hyatt House, according to his 1999 New York Times obituary.
Within the next two years, Pritzker and his brothers built Hyatt hotels near other airports.
The first two locations were built close to the San Francisco International Airport and the Seattle-Tacoma International Airport.
Jay Pritzker's brothers, Donald and Robert, were heavily involved with his business dealings, with Donald reporting to Jay as Hyatt's manager of operations and overseeing the first six hotels in the chain.
By 1967, the brothers were expanding their brand beyond upscale airport hotels.
The Pritzkers bought a half-completed hotel in in 1967 in Atlanta, Georgia, and turned it into an iconic John Portman-designed hotel with a 22-story high atrium and futuristic feel. They named it the Hyatt Regency. The Regency brand was meant to appeal to both business and leisure travelers, and even kicked off the trend of sky-high atrium lobbies.
The Hyatt opened its first international hotel in 1969.
With 12 hotels stateside, the company went international in 1969 by opening a Hyatt Regency in Hong Kong. While that initial structure is no longer standing (as it was demolished in 2005 to make way for a commercial building), the hotel reopened in 2009.
The Pritzkers created a separate company, Hyatt International Corporation, in 1969 to support efforts in expanding the chain abroad.
The Pritzkers' brother-in-law, Skip Friend Jr., was brought in to oversee Hyatt's growth. Friend then spent hundreds of thousands of company dollars on personal expenses, Fortune Magazine reported in 1988 — in response, Jay moved the company's headquarters to Chicago.
Jay also completed the long process of buying out the public shareholders and took Hyatt private again by 1979.
The Pritzkers' first foray into the luxury sector came with the opening of the Park Hyatt in 1980.
In 1980, Hyatt opened the Park Hyatt Chicago and the Grand Hyatt New York.
The opening of both hotels signified the diversification of the Hyatt portfolio, allowing the company to grow rapidly.
Jay Pritzker died in 1999, breaking up the family's wealth.
At the time of Jay Pritzker's death, Forbes estimated his net worth to be $13.5 billion as a result of his countless business ventures.
By then, there were 182 Hyatt hotels, with another 34 under construction. The year before, the Hyatt Corporation saw $3 billion in revenue. Before his death, Jay had named his son, Tom Pritzker, his successor in 1995. He also established leadership roles for Nick Pritzker and Penny Pritzker.
In late January, Hyatt announced that it expects to open nearly 200 new hotels over the next three years.
The majority of those openings will be in the Americas — which already has 585 Hyatt-owned hotels.
The company will also expand its global presence. Last month, it announced that over 20 new overseas luxury hotels are expected to open by the end of 2020. Locations include Japan, France, Indonesia, and Qatar under brands like the Park Hyatt, Andaz, and Alila.
