Hyatt has added a bunch of new brands. Now comes the hard part: maintaining the old ones

If there’s one thing we can all learn from Madonna, it’s this: You have to reinvent yourself again and again to stay ahead of the game, or the constant rush of young people who can hold half a song will inevitably threaten your crown.

Some (OK, fine – maybe it’s just the hotel reporter writing this story) might argue that Hyatt has taken a page from the Material Girl in recent years with its own brand strategy.

While the company was known for decades as an upscale hotel chain that catered to business travelers, it eventually began reinventing itself as a luxury and lifestyle powerhouse with brands like Alila, Andaz and Thompson Hotels. Major openings in the last quarter include new ones Park Hyatt London River Thames and Alila Shanghai.

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The reinvention has continued in recent years with a more personalized luxury piece with the purchase of the model The Mr & Mrs Smith booking platform. Now Hyatt has ventured into all-inclusive resorts with the addition of Apple Leisure Group’s network of brands such as Secrets and Dreams and a planned partnership announced earlier this month with parent company Bahia Principe Hotels & Resorts. Hyatt also flexed its hotel lifestyle earlier this year, announcing that it is absorbing Standard International’s network of brands which include Standard and Bunkhouse hotels.

Hyatt’s overall development pipeline represents more than 40% of the company’s current hotel room count.

“Our openings provide more opportunities for our guests and members to engage with us, while our growing pipeline allows us to expand into new markets in the future,” said Hyatt CEO Mark Hoplamazian. on Thursday morning in an earnings call for the company.

But even this nimble Chicago hotel giant faces headwinds from time to time and — gasp — has to consider whether it should be doing what the competition is already doing.

As the company reported a hefty third-quarter profit of $471 million on Thursday, a call to investors showed many analysts are curious about a higher-than-usual number of rooms leaving Hyatt’s orbit. Hoplamazian said part of that is due to the strict standards of the Hyatt brand and owners not wanting to keep up with modern demands on older properties.

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“Some of these are markets that have become, I would say, more challenging, or where the central business district has moved and we’re looking for new representation,” Hyatt’s CEO told investor analysts Thursday morning. “In a few cases, the owners we didn’t reach an agreement with to bring the hotels up to brand standards. So part of that is just about discipline and maintaining standards and increasing the quality of our portfolio.”

The conundrum is both a blessing and a curse for Hyatt. On the one hand, Hyatt earns rave reviews for offering superior service in each of its segments. Part of that means keeping hotels in tip-top shape and maintaining strict brand standards, regardless of the property’s age.

Competition from Marriott, Hilton and IHG will say they have similar standards for each of their brands. But they also have an exit ramp for owners who don’t always want to keep up with these standards, but want to stay in the company’s orbit. DoubleTree is Hilton’s conversion brand in the luxury space, while Spark has become a fast growing brand in the premium economy space. Marriott’s Delta brand was introduced as an option for owners who didn’t want to go through the upgrade process to new standards launching at Sheraton.

“We don’t have a brand right now where we encourage owners who want to downgrade their hotels to something that’s lower,” Hoplamazian said. “It’s different from our competitors.”

Given that this seems like a slow-hanging fruit for a company that has shown in recent years that it’s not even shy about adding new brands, is one in the works?

“There’s an opportunity. It’s something we’ve been looking at since the beginning of time,” Joan Bottarini, Hyatt’s chief financial officer, said with a laugh during Thursday morning’s earnings call.

The conundrum here goes back to the logic that Hyatt focuses on the upper segment of travelers, whether they are leisure or business travelers. So the concept of “degrading” anything might seem at odds with the Hyatt brand and guest logic.

“We have our eyes wide open,” Hoplamazian said. “It’s something new that we haven’t really had a problem with or had to consider as much as we do today.”