Hyatt bets on luxury travel by investing $2.7 billion in resorts

Hyatt is expanding its presence in luxury resorts and betting that the pandemic will increase demand for leisure travel upmarket.

The US hotel group said in a statement Sunday that it has agreed to buy luxury resorts operator Apple Leisure Group from private equity firms KKR and KSL Capital Partners for $2.7 billion.
This acquisition will make Hyatt the largest luxury hotel operator in Mexico and the Caribbean, and double its global resorts footprint. It will also extend its presence into 11 new markets in Europe, “a critical region for global growth in leisure travel,” Hyatt (H) said.
The deal is the latest move by an international hotel chain to expand in luxury travel, which is leading the industry’s recovery following the coronavirus pandemic, according to travel research company Skift. InterContinental Hotels Group, which operates Holiday Inn and Crown Plaza chains, announced last week plans to launch a “luxury lifestyle” brand. This will expand its portfolio of luxury hotels.
Demand for leisure is expected to outstrip business travel coming out of the pandemic, as many companies continue with remote working. High levels of excess savings, particularly among wealthy households, are also expected to boost spending on travel. “The travel market is now, in effect, a leisure market,” Accenture’s European head of travel and hospitality, Miguel Flecha said in a recent report. A new strategy that is based on leisure travel will help travelers companies position themselves for the market after the pandemic.
Apple Leisure Group is the manager of the largest portfolio of luxury all-inclusive resorts across the Americas. This includes brands like Zoetry and Secrets Resorts & Spas. Alua Hotels & Resorts is also expanding in Europe.
The hotel portfolio of the company has increased from nine resorts in 2007 to around 100 properties and 33,000 rooms across 10 countries. There are many more hotels under development.
Mark Hoplamazian, Hyatt CEO, stated that the deal would “transform” Hyatt’s earnings profile.
The company plans to make 80% of its revenues from management fees by 2024, rather than owning hotels. The company expects to sell $3.5Billion of hotel real estate in the next three years, with $1.5B of properties this year.
Hoplamazian stated that Apple Leisure Group’s luxury brands, leadership position in the all-inclusive market, and a large pipeline of resorts will increase our reach in new and existing markets, including Europe.

By Anna Jeffs

Noble lash is a contributing writer for Daily Reuters. she also runs few other blogs, where he analyzes American football players and their games too seriously. she reviews the American Football Games on daily basis and magnanimously indulges, encourages, and even participates in Football discussion worldwide.

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