Hilton has agreed to acquire Graduate Hotels for $220 million. They expect to close in the second quarter.
Original story from February 5 follows:
Hilton is in talks to acquire the Graduate Hotels brand, a 10-year old chain with 33 hotels (all but two in the United States) with a focus on acquiring and remodeling properties in college towns such as Annapolis, Ann Arbor, Berkeley and Bloomington. Expansion is planned near UT Austin, Auburn, SMU and Princeton.
Ironically, Paris Hilton – in recent years a spokesperson for the large eponymous chain – did not graduate from college, and received a high school GED. This, along with LivSmart Studios, would bring Hilton up to 20 brands. Soon the Honors program could bring food and beverage credits insufficient to cover the actual cost of breakfast to families with Platinum cards visiting their kids at school all across America.
(HT: @crucker)
Stayed at Graduate East Lansing and it was phenomenal! Hopefully Hilton doesn’t ruin it.
Smart move by Hilton Hotels.
First, the Hilton chain is preferred by many in academia. One loquacious commenter on this blog is a Cornell professor (give or take) and a fervent supporter of Hilton. As recently as yesterday he commented on the Amsterdam trip report with a defense of the Waldorf.
Second, consumer businesses often write off the academic market as low-value. This is shortsighted. Students have little to spend, but at reputable institutions, they’re on a path to becoming wealthy professionals who will have a lot to spend. The smart move in business and in branding is to prime them with a good first impression–hence, Hilton’s investment in renovations here–so they’re more likely to choose you than your competitors when they actually have money.
Consider it a form of loss leading.
As an add-on to my comment about low-value students, priming, and loss leading:
1/ It’s true that consumer loyalty is pretty much nonexistent in this day and age.
2/ However, consumer sentiment is alive and well. Remember the saying — people won’t remember what you say, but people will remember how you make them feel? As a business, if you make an undergrad feel like a king, they will remember that in a decade when they make partner at e.g. Skadden, Arps, Slate, Meagher & Flom LLP.
Annual profit per partner at Skadden is in excess of $5 million.
I under-appreciated how much of the Graduate business is traveling D1 sports teams (not just the obvious football and baksetball, but all of the other sports too). It provides a nearly constant base of room nights between the meteoric spike that they can command for home football games, university events and other big draws.
Ironically, the Eugene Graduate was a Hilton 6 or so years ago.
Hilton Charlottesville, convenient location, fairly decrepit facility, cutesy, but lacking in any real luxe elements except the rooftop bar. Expensive and not worth it IMO.
Iowa City Graduate was a rundown Sheridan and is next to a Curio Hotel with another Curio a block further. Update is always nice.
I recently stayed at the Graduate in Madison WI. I hated paying out of pocket as most of my hotel nights are award stays paid for with HH points, I’m looking forward to it being brought into the Hilton fold.
@Dignity I do not think you understand the dynamics of the university town market these days. These hotels absolutely print money; they are not loss leaders. At a big school you have move in, homecoming, football season, parents weekend, basketball season, graduation, reunion, and conferences, business school recruiting, undergrad recruiting, medical seminars, etc. Then in the summer people are coming back and doing weddings. Any one of these events going on and a Graduate property is charging $400/night or more.
Also, college students aren’t the broke kids of past memory; these days with the cost of tuition and competition to get into even mid tier schools, most kids paying their way have wealthy parents.
Now take that top line and bring in Hiltons purchasing power, standardization, operational efficiency, and booking / loyalty platform and margins go through the roof.
So this is an attractive purchase for Hilton, yes, but not for the reasons you suggest.
So, this is an attractive
Loved our recent stay at the Graduate in Tucson — clean, cute room, nice staff, allowed us to check in 7 hours early at no cost, great location. Seconding James’s hope that Hilton maintains quality.
LOL. What a stupid statement and evidence of misguided preoccupations! Only a self-anointed “travel guru” who has completely lost grip on reality and constantly turns molehills into mount Himalayas would seriously think that “families with Platinum cards visiting their kids at school all across America” for homecoming or graduation would be too cheap to treat their kids to full hot restaurant breakfast. On the other hand, if the families had to rely on finding Hyatt hotels in college towns or campuses across America for the best breakfast in the universe, they’d be out of luck! 😉
Spelled Ann Arbor wrong
Stayed at a few of these Graduate Hotels. Sometimes a little pricier, but always were pretty nice and had the room types I prefer.
They are actually my preferred “non- chain” option when available in these college towns.
Now I have a feeling that they’ll get ruined by corporate…
@CW — Agreed, as I live very close to one 😉
The Graduate Roosevelt Island hotel in the middle of the Cornell Tech campus on New York City’s East River is simply stupendous, with a view from the its Panorama Room of the iconic Manhattan skyline to kill for. Interestingly, it’s the hotel where the crew of Singapore Airlines flights out of JFK (JFK-FRA-SIN, and JFK-SIN [world’s longest nonstop flight]) stay overnight to refuel. Right after the hotel opened the cost of a standard room was around $450…so these are mid- to high-end hotels that look nothing like Hilton’s “LivSmart Studios”
I wager that there will a Graduate hotel on nearly every reputable high-learning institution and Ivy League university campus in America, so it is indeed a very attractive purchase for Hilton if the deal goes through.
Have stayed in the Graduate in Columbus OH a couple times (loved it) and also the Evanston, IL location (one too many coats of paint to be charming). Good match for Hilton
Wrong. Graduate Iowa City was a Holiday Inn. And Division 1 football and basketball teams aren’t gonna be staying downtown in a small-to-midsize college town. They take the next town over and bus in. It’s not only cheaper, it’s less distracting.
And yeah, in a big university town, those football weekends are Christmas for hotels: the prices are astronomical, and people always pay. Just break even for the rest and you’re good. Remember, most of these towns have a big university hospital, where people go for long, complicated treatments, and the family has to stay somewhere.
It would be cool to have discount hotels for the college experience. That just doesn’t happen.
The Ann Arbor Graduate Hotel, 615 E Huron Street, is conveniently located near the Delonis Homeless Shelter, 312 W Huron Street, Ann Arbor. You can volunteer to help people experiencing homelessness at the Delonis Center.
The Shelter Association of Washtenaw County at the Delonis Center offers those experiencing homelessness a wide array of services at this location all year. More information is in the Ann Arbor Observer article linked below.
https://annarborobserver.com/the-many-worlds-of-the-delonis-center/