I wrote in December that Hyatt was in talks to acquire Playa Hotels, which owns 24 all-inclusive resorts in Mexico, Jamaica and the Dominican Republic. Hyatt already had a 9.99% stake in the company which operates under the Hyatt Zilara, Hyatt Ziva, Hilton All-Inclusive, Tapestry Collection by Hilton, Wyndham Alltra, Jewel Resorts and The Luxury Collection brands.
They’ve come to terms, and Hyatt will acquire all outstanding shares of Playa Hotels at $13.50 per share, valuing it at $2.6 billion inclusive of $900 million debt. That’s a 40% premium over the company’s market cap prior to revealing talks over the sale. Hyatt plans to sell the physical hotel properties, and they anticipate this will generate approximately $2 billion by the end of 2027. The non-Hyatt branded properties seem likely to convert to Hyatt brands over time.
This deal comes on top of recent acquisitions:
- Two Roads Hospitality (2018) adding brands including Joie de Vivre, Destination, Alila, and Thompson Hotels
Thompson Savannah - Apple Leisure Group (2021) significantly boosting its presence in premium all-inclusives in Europe and the Americas.
- Dream Hotel Group (2022): adding Dream Hotels, The Chatwal, and Unscripted Hotels.
- Mr & Mrs Smith (2023): the UK-based booking platform for boutique and luxury independent and small-chain properties worldwide.
- Me and All Hotels (2024): from Lindner Hotels.
- Standard International (2024): including The Standard and Bunkhouse Hotels brands, and even management of a coffee chain and iconic Austin Motel.
Two years ago Hyatt introduced a separate award chart for all-inclusive hotels (though not all all-inclusives are part of this chart). Since the pandemic they’ve pivoted to premium leisure, of which all-inclusives are a large part. Their premium focus has its roots pre-pandemic, however, and even pre-Two Roads Hospitality acquisition. They saw the opportunity with Miraval to learn and lean into lifestyle to generate outsized revenue for their product.
Moreover, through World of Hyatt’s focus on elite benefits and member experience, they’ve hit far above their weight both with customer loyalty and co-brand credit card performance. That’s actually why their lackluster integration of Mr and Mrs Smith has been so concerning – a huge step-down from their previous partnership with SLH Hotels – redemptions through this platform are low value and that follows the shift to low value redemptions for Destination Residences and now a low value partnership with Venetian and Palazzo Las Vegas.
Not in-to the all-inclusives, but as long as Hyatt does not devalue their program, you do you, fellas.
Hyatt certainly has been making a lot of moves recently
Re: Thompson Savannah – wow, I actually took a nap on those blue chairs at that green space the other day! I took a picture of the hotel thinking it looked nice but never followed up to see what it actually was. Is that an older picture though? I don’t see the SAV sign by the river.
@L737 — Stayed at that Thompson in Savannah in 2023. Got a corner room upgrade–woo. Has a very nice rooftop bar/restaurant (Julian) with great views of the river. It was relatively new then (opened 2021). Location is tastefully removed from the heart of the city; in a newer part of town. It’s a category 5, so couldn’t use the free night with the Chase card, and the points rates were about 20K for a $300 entry-level room (so not the best redemption; paying with card may be better). If you have pets, at the time at least they did not charge, which is nice. Free parking on the street (depending on the day/hours, or paid valet). If one is in that part of Georgia, why not.
@1990 That sounds like a really neat experience! The corner room must have had some really nice views and I’m all for a hotel with a good rooftop restaurant/bar. I agree it’s a really nice area, away from the hustle and bustle. I actually found it by chance walking the length of the Riverwalk. I guess 2021 was only 4 years ago but it looked brand new.
How many all-inclusives can Hyatt own? So many of its acquisitions seem repetitive. How about adding some Hyatt Regency or Grand Hyatt (let alone some Hyatt or Hyatt Centric) in North America and Europe?
This has to be the first SPAC I’ve seen acquired for more than the $10 original issue price. Was it worth 35% waiting all those years? Probably not.
If you do not know what I’m talking about, a spac is a blank check company that receives typically $10 in cash and then goes out looking for a private company to merge with, creating an instant public company. These are typically scams because every one I have seen awards 20-30% of the stock to the promoters for 1 cent per share , in addition to the management fees.
Think Nikola, which was a fraud built on a scam.
DJT is a SPAC trading at a premium, but it has not been acquired…..yet.
I don’t blame the promoters for doing what they can get away with but my suspicion is this is where crypto is headed.
@FNT Delta Diamond– I completely agree with you. We stay almost exclusivey in Hyatt Regency or Grand Hyatt properties. No desire for all-inclusives or more Hyatt Places. And there are so many brands now that I can’t distinguish one from the other nor do I have any idea whether as a lifetime Globalist I get complimentary full breakfast, jujst a croissant, or nothing at any of them.
Hyatt’s strategy is completely different than Marriott, Hilton or IHG’s strategy. Someone’s strategy is right and someone’s strategy is wrong.
And so many of these all-inclusive properties being acquired by Hyatt are really down-market. Wyndham! Hyatt has always claimed it commands higher RevPar than other chains and that it has richer customers. But buying a Wyndham?
Is there an endless market for Caribbean all-inclusives? At this point, does Hyatt have a single customer who’s saying “You know, I wish Hyatt had more all-inclusive options.”
On the other hand, their most loyal customers are practically screaming for more full service hotels in America and other developed countries.
I’d note that all this Mexico business is not without risk. Mexico is fairly stable right now, but would you sink a good chunk of your life savings into an Mexican business opportunity?
@FNT Delta Diamond +1
Hyatt really seems to be fixating on all-inclusives lately while neglecting the hotels that made them successful. That would just be really annoying if Hyatt was providing good value on cash and award bookings but that seems to have gone by the wayside as well. I’d be a lot happier if Hyatt had just bought Omni Hotels or a similar group.
@Christian — Neglecting? Like where? Sure, Gary occasionally posts about a franchisee that has neglected a property or is abusing its power (such as not honoring elite benefits), but by and large, Hyatt is still one of the best programs, and many of their flagship properties are excellent. Park Hyatt, Alila, even the Grand Hyatts in many places very much still ‘got it’. Then again, maybe you and I travel very differently, partner. Like, my idea of a good time is not The Homestead (an Omni).
@1990 – Yes, neglecting. Hyatt became successful by building full service business or business/leisure hotels, often in good locations in cities. We’re not talking about WOH here (I’m a 70+ night Globalist last year) because overall you’re completely correct that Hyatt has the best top tier program right now although it’s been slipping. The problem is that being a Globalist often gets you little to nothing in a limited service hotel or an all-inclusive. Hyatt needs to return to what made them so good: build or acquire full service hotels with complete amenities like club lounges, provide great value on points, as well as return to surprise and delight and over-delivering.
So they buy the company for $2.6 billion and sell the physical hotels for $2.0 billion. What are they retaining that is worth at least $0.6 billion? Will the sold hotels retain the Hyatt name for a certain number of years and provide a revenue stream to Hyatt? Why not retain the hotels instead?