Hyatt In Advanced Talks To Buy Several Kimpton Hotels

Hyatt has the most rewarding elite program of any of the major hotel chains, and their properties skew upscale (and relatively upscale even in the limited-service space). The problem is that their footprint simply remains small relative to Marriott, Hilton, IHG and Accor.

On the one hand that means they need to try harder in loyalty, because it takes effort for a guest to stick with Hyatt properties. On the other hand it means that they don’t have hotels in all locations and all price points the way competitors are closer to achieving.

They’ve tried to grow through strategic partnerships with MGM and SLH hotels, and through acquisitions such as Two Roads Hospitality which has given them Alila, Destination Hotels, Joie de Vivre and Thompson Hotels (as well as the nascent tommie brand).

Hyatt has actually tried and failed at other acquisitions. They were in the running for Starwood, probably even offering more money than Marriott, but their complicated stock structure (the Pritzker family retains outsized control) got in the way. Hyatt tried at the last minute to acquire NH Hotels but that door was already shut. They were also a bidder for Kimpton, but IHG beat them out by $100 million. (Hyatt was right not to overpay the way IHG did.)

Now Hyatt is reportedly taking another bite at at least a piece of the Kimpton apple, possibly acquiring Kimpton properties from Xenia Hotels.

Hyatt Hotels Corp. has emerged as a bidder for a portfolio of Kimpton hotels owned by Xenia Hotels & Resorts Inc., according to people with knowledge of the matter.

Xenia has received multiple offers for the portfolio, which could fetch about $500 million, said one of the people who requested anonymity because the matter is private.

…Management contracts for the portfolio, which includes Kimpton Hotel Monaco properties in Chicago, Denver and Salt Lake City, can be terminated in the event of a sale, Bloomberg reported last month.

kimpton canary hotel santa barbara rooftop pool
Rooftop Pool, Credit: Kimpton Canary Hotel, Santa Barbara

Rather than acquiring brands and management contracts this would be actually buying a handful of Kimpton hotels themselves in Portland, Alexandria, Philadelphia, Denver, Chicago, Salt Lake, and Santa Barbara. If the transaction is successful it’s not clear how long a transition period would be before the hotels are re-branded.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Great, just what we don’t need:

    Even more competition killing consolidation.

    Gee, how’s all that consolidation working out for consumers in other industries like, say, airlines?

    I mean, as if government sanctioned monopolies and oligopolies in industries like cable tv/internet providers isn’t horrible enough…

    “Oligopolies are GREAT!” – said by no one except oligopolists, oligarchs, and the gullible fools that delude themselves into believing that someday they’ll be just as rich & powerful as the oligarchs are if they dutifully play the role of being sycophants & sucking up to them.

  2. Gary,

    Can you explain how $500m purchase for 7 Kimpton hotels makes sense for Hyatt? I read that this was the asking price a month ago when Xenia made it public they were looking to offload the properties, it seems that they would be overpaying.

  3. @Howard Miller Kimpton Hotels are currently incorporated into the InterContinental Hotel Group (IHG). So these are not boutique or privately run hotels. It would simply switch from IHG to Hyatt and probably be re-branded from Kimpton to Hyatt Centric or something like that. IMO this is not changing the competitive langscape but is a simple rebranding.

  4. While Kimpton already lost some hotels (i.e. Sand Francisco) before the IHG acquisition; the brand is really withering under IHG. Sure some have opened up but IHG doesn’t know how to market the brand at large. It’s a shame because of the awesome customer service and attention to pets.

  5. I wold love to see the Kimpton Riverplace Hotel in Portland (part of the Xenia portfolio) become a Hyatt. It’s a classy, boutique property that will help boost Hyatt’s growing footprint in Portland.

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