Hyatt is closing in on its goal of doubling the size of its worldwide resort portfolio to over 400 resorts by 2020. The company is removing its last obstacle to reaching that goal with an agreement to acquire the 100 percent of the Apple Leisure Group that is owned by the company’s investor, hotelier John W. Childs. Hyatt currently operates or manages more than 400 hotels worldwide.
Hyatt Hotels is set to announce on Wednesday that it is acquiring Apple Vacations for $3.6 billion. The deal will be the first for Apple Vacations, which is a competitor of Hyatt’s W Hotels and Resorts. Also, this is the second time Apple has tried to buy out Hyatt. In 2011, Apple and Hyatt were in talks on a separation of their respective chains, but the talks fell through and Hyatt said it would explore a sale of some of its properties.
Hyatt Hotels Corporation stated that it has reached a final deal to buy Apple Leisure Group (ALG), a major North American resort management, travel, and hospitality company, for $2.7 billion in cash.
Subject to normal closing conditions, the acquisition from affiliates of capital market firm KKR and private equity firm KSL Capital Partners, LLC is anticipated to complete in the fourth quarter of this year.
Under the AMR Collection name, ALG’s resort brand management platform, AMResorts, provides management services to the biggest network of premium, all-inclusive resorts in the Americas.
The AMR Collection portfolio includes such well-known resort brands as Secrets Resorts & Spa, Dreams Resorts & Spas, Breathless Resorts & Spas, and Zoëtry Wellness & Spa Resorts, Sunscape Resorts & Spa Resorts, as well as the up-and-coming Alua Hotels & Resorts, and Now Resorts & Spas brands.
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ALG Vacations, ALG’s tour operator arm, and Unlimited Vacation Club, ALG’s membership product, will be included in Hyatt’s purchase, as will its destination management services and travel technology assets.
The ALG Unlimited Vacation Club is a private travel club whose members get special prices and other perks at AMR Collection hotels. Its membership has grown at a compounded annual growth rate of 18 percent over the last five years, to over 110,000 people.
ALG now operates in ten countries and has a portfolio of over 33,000 hotel guest rooms, having expanded from nine resorts in 2007 to around 100 by the end of 2021. It also has 24 completed agreements for properties in Europe and the Americas in the pipeline, as well as a large number of hotels presently under construction.
This will allow Hyatt to extend its luxury leisure travel footprint both now and in the future, since the company will have the world’s biggest portfolio of premium all-inclusive resorts after the deal is completed.
It will also be the biggest luxury hotel operator in Mexico and the Caribbean, and its European presence will have expanded by 60%, with Hyatt entering 11 new European markets overnight.
Existing ALG CEO Alejandro Reynal and the current ALG leadership team will continue to manage the company’s operations once the purchase is finalized, with Reynal joining Hyatt’s senior leadership team and reporting to Hyatt CEO Mark Hoplamazian.
PHOTO: ALG’s Alejandro Reynal (photo courtesy Apple Leisure Group)
In a press statement, Reynal stated, “Combining Hyatt’s extensive experience and worldwide brand presence with ALG’s strong resort brands, operational skills, and aggressive growth plans will enhance our unique position and become a leader in luxury leisure travel.” “On behalf of everyone at ALG, I’d want to express our gratitude to our partners at KKR and KSL, who helped us develop the platform into what it is now. I’m thrilled to welcome our staff to the Hyatt family, and I’m looking forward to a successful future as the industry grows and we’re able to deliver a best-in-class leisure product to an even wider set of visitors across the world.”
Chris Harrington and Rich Weissman, partners at KKR and KSL Capital Partners, respectively, stated, “Today marks a wonderful milestone in what has been a tale of development, perseverance, and commitment to world-class leisure experiences by an exceptional team at Apple Leisure Group.” “There is simply no better place for ALG to continue on its upward trajectory than Hyatt.”
On Monday, August 16, 2021, at 7:30 a.m., Hyatt will conduct a conference call and webcast. CDT to discuss the deal, with interested parties able to listen in through a live webcast on the company’s investor relations website.
Visit investors.hyatt.com for more details.