Hyatt Hotels Corp. has acquired another hotel brand—its fourth major transaction in as many years.
The Chicago-based hospitality company and Dream Hotel Group have finalised an agreement for Hyatt to acquire Dream Hotel Group’s lifestyle hotel brand and management platform including the Dream Hotels, The Chatwal Hotels and Unscripted Hotels brands. This asset-light acquisition will include a portfolio of 12 managed or franchised lifestyle hotels, with another 24 signed long-term management agreements for hotels expected to open in the future. Upon closing, this expansion will add more than 1,700 rooms to Hyatt’s lifestyle portfolio and increase Hyatt’s room count in New York City by more than 30 percent.
This latest deal continues Hyatt’s asset-light growth strategy following its transactions to acquire Two Roads Hospitality in 2018 and Apple Leisure Group in 2021 — and, just last month, Hyatt’s collaboration agreement with German Lindner Hotels AG, to further grow Hyatt’s brand footprint in Europe.
The Details
Upon closing, Hyatt will pay a base purchase price of $125 million, with up to an additional $175 million over the next six years as properties come into the pipeline and open — a total of $300 million. Stabilised management fees associated with the base purchase price of $125 million are anticipated to be approximately $12 million and, to the extent the contingent purchase price of $175 million is paid, additional stabilized management fees are anticipated to be up to approximately $27 million. The total base purchase price plus the contingent purchase price represents an acquisition multiple in the high-single digits on projected stabilized earnings.
The acquisition will extend Hyatt’s brand footprint in key markets, including Nashville; Los Angeles; Miami Beach, Fla.; Durham, N.C.; several locations in New York City and one in the Catskills region of New York. Signed contracts represent additional strategic destinations including Las Vegas, Saint Lucia and Qatar.
The transaction is anticipated to close in the coming months, subject to customary closing conditions. Following completion of the transaction, Hyatt add the new properties into the World of Hyatt loyalty program.
Sant Singh Chatwal will continue as an owner of four open and two future hotels that are expected to join the Hyatt portfolio. Stein will join Hyatt as head of Dream Hotels to guide the integration of the Dream Hotel Group brands into the Hyatt portfolio. Additionally, Dream Hotel Group’s chief development officer David Kuperberg will join Hyatt as head of development — Dream Hotels; Chief Operating Officer Michael Lindenbaum will join Hyatt as global head of operations — Dream Hotels.
What they said
Mark Hoplamazian, president and CEO of Hyatt, said: “We have tremendous respect for what Dream Hotel Group founder [and chairman] Sant Singh Chatwal and CEO Jay Stein and their team have created and are grateful for the trust being placed in us by Dream Hotel Group to care for their brands and carry their success forward into the future. We look forward to continuing our growth journey with more than 600 new Hyatt family members who will further elevate our lifestyle expertise and expand the success of our dedicated lifestyle division. We are excited to offer even more inspiring experiences and celebratory programming to our guests and loyalty members and bring the value of the Hyatt network to a growing number of discerning hotel owners and developers around the world.”
Sant Singh Chatwal, Dream Hotel Group founder, said: “Hyatt has a proven track record of preserving what makes lifestyle hotels special and is the ideal new home for our growing Dream Hotel Group brands. As an owner of Dream Hotel Group properties, I look forward to the next part of our journey and am confident there is a bright future ahead for our hotels, owners, guests and team members as part of the Hyatt family.”