Acquisition to expand Hyatt's unique lifestyle
hotel offerings with a quickly growing brand portfolio focused on
vibrant dining and nightlife experiences
Hyatt Hotels Corporation (NYSE: H) and Dream Hotel Group
announced an agreement for a Hyatt affiliate to acquire Dream Hotel
Group’s lifestyle hotel brand and management platform including the
Dream Hotels, The Chatwal Hotels and Unscripted Hotels brands, with
properties in some of the world’s most prominent hotel markets
across the Americas, Europe and Asia.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20221129005474/en/
Dream Downtown (Photo: Business Wire)
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 over 1,700 rooms to
Hyatt’s lifestyle portfolio and increase Hyatt’s room count in New
York City by more than 30%. This acquisition continues Hyatt’s
asset-light growth strategy following its transactions to acquire
Two Roads Hospitality in 2018 and Apple Leisure Group in 2021 –
and, most recently, Hyatt’s collaboration agreement with German
Lindner Hotels AG, to further grow Hyatt’s brand footprint in
Europe.
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. Stabilized
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 attractive acquisition
multiple in the high-single digits on projected stabilized
earnings.
Dream Hotel Group properties are known for their vibrant dining
and nightlife experiences including hotspot restaurants, lavish
entertainment venues and exclusive night clubs built on strategic
collaborations with innovative and award-winning industry leaders.
The acquisition will extend Hyatt’s brand footprint in key markets,
including Nashville, Hollywood, South Beach, Durham, several
locations in New York City and one in the Catskills. Signed
contracts represent additional strategic destinations including Las
Vegas, Saint Lucia and Doha.
“We have tremendous respect for what Dream Hotel Group founder
Sant Singh Chatwal and Chief Executive Officer 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,” said Mark Hoplamazian, president
and chief executive officer, Hyatt. “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.”
“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,” said Sant Singh Chatwal, chairman and
founder, Dream Hotel Group. “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.”
The transaction is anticipated to close in the coming months,
subject to customary closing conditions. Following completion of
the transaction, Hyatt will work to welcome the new properties into
the World of Hyatt loyalty program, bringing more stay occasions
and destinations to its member base. World of Hyatt members are
some of the most valuable travelers in the industry who spend more
and stay more, generating high-quality revenue for the owners of
Dream Hotel Group properties.
Dream Hotel Group founder Sant Singh Chatwal will continue his
commitment as an owner of four open and two future hotels that are
expected to join the Hyatt portfolio. Dream Hotel Group CEO Jay
Stein will join Hyatt as Head of Dream Hotels to guide the
integration of the Dream Hotel Group brands into the Hyatt
portfolio, ensuring the unique DNA of each brand is preserved while
leveraging Hyatt’s capabilities to optimize property performance.
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.
In connection with the transaction, Moelis & Company LLC
served as financial advisor to Hyatt and Latham & Watkins LLP
acted as its legal advisor.
The term “Hyatt” is used in this release for convenience to
refer to Hyatt Hotels Corporation and/or one or more of its
affiliates.
About Hyatt Hotels
Corporation
Hyatt Hotels Corporation, headquartered in Chicago, is a leading
global hospitality company guided by its purpose – to care for
people so they can be their best. As of September 30, 2022, the
Company’s portfolio included more than 1,200 hotels and
all-inclusive properties in 72 countries across six continents. The
Company's offering includes brands in the Timeless Collection,
including Park Hyatt®, Grand Hyatt®, Hyatt
Regency®, Hyatt®, Hyatt Residence Club®, Hyatt
Place®, Hyatt House®, and UrCove; the Boundless
Collection, including Miraval®, Alila®,
Andaz®, Thompson Hotels®, Hyatt Centric®, and
Caption by Hyatt; the Independent Collection, including
The Unbound Collection by Hyatt®, Destination by
Hyatt™, and JdV by Hyatt™; and the Inclusive Collection,
including Hyatt Ziva®, Hyatt Zilara®, Zoëtry®
Wellness & Spa Resorts, Secrets® Resorts & Spas,
Breathless Resorts & Spas®, Dreams® Resorts &
Spas, Vivid Hotels & Resorts®, Alua Hotels &
Resorts®, and Sunscape® Resorts & Spas. Subsidiaries
of the Company operate the World of Hyatt® loyalty program, ALG
Vacations®, Unlimited Vacation Club®, Amstar DMC destination
management services, and Trisept Solutions® technology services.
For more information, please visit www.hyatt.com.
About Dream Hotel Group
Dream Hotel Group is a hotel brand and management company with a
rich, 35-year history of managing properties in some of the world's
most highly competitive hotel environments, including New York, Los
Angeles, Miami, Bangkok and most recently Nashville. Home to its
Dream Hotels, Unscripted Hotels, The Chatwal and new By Dream Hotel
Group brands, Dream Hotel Group encompasses three business lines:
Proprietary Brands, Hotel Management, and Dining & Nightlife.
The company is committed to the philosophy that forward-thinking
design, service and guest experiences should be available across
all market segments. Dream Hotel Group is dedicated to offering
travelers an authentic connection to their chosen destination
through a truly original approach. For more information on Dream
Hotel Group and its brands, visit www.DreamHotelGroup.com and
follow @dreamhotelgroup on Twitter and LinkedIn.
Forward-Looking
Statements
Forward-Looking Statements in this press release, which are not
historical facts, are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements include statements about the Company’s proposed
acquisition of the lifestyle hotel brand and management platform of
Dream Hotel Group, including expected financial and operational
benefits resulting from the acquisition, guest and owner advantages
arising from the acquisition, the number of properties expected to
open in the future as part of the acquisition, the expected
incorporation of hotels acquired as part of the acquisition into
the World of Hyatt loyalty program, the expected timeline for
completing the acquisition, prospects or future events and involve
known and unknown risks that are difficult to predict. As a result,
our actual results, performance or achievements may differ
materially from those expressed or implied by these forward-looking
statements. In some cases, you can identify forward-looking
statements by the use of words such as "may," "could," "expect,"
"intend," "plan," "seek," "anticipate," "believe," "estimate,"
"predict," "potential," "continue," "likely," "will," "would" and
variations of these terms and similar expressions, or the negative
of these terms or similar expressions. Such forward-looking
statements are necessarily based upon estimates and assumptions
that, while considered reasonable by us and our management, are
inherently uncertain. Factors that may cause actual results to
differ materially from current expectations include, but are not
limited to: risks associated with the acquisition of Apple Leisure
Group, including successful integration of the Apple Leisure Group
business; the duration and severity of the COVID-19 pandemic or any
additional resurgence and the pace of recovery following the
pandemic or any additional resurgence; the short and long-term
effects of the COVID-19 pandemic, including on the demand for
travel, transient and group business, and levels of consumer
confidence; the impact of actions taken by governments, businesses,
or individuals in response to the COVID-19 pandemic or any
additional resurgence on global and regional economies, travel
limitations or bans, and economic activity; the ability of
third-party owners, franchisees, or hospitality venture partners to
successfully navigate the impacts of the COVID-19 pandemic or any
additional resurgence; general economic uncertainty in key global
markets and a worsening of global economic conditions or low levels
of economic growth; the rate and the pace of economic recovery
following economic downturns; global supply chain constraints and
interruptions, rising costs of construction-related labor and
materials, and increases in costs due to inflation or other factors
that may not be fully offset by increases in revenues in our
business; risks affecting the luxury, resort, and all-inclusive
lodging segments; levels of spending in business, leisure, and
group segments as well as consumer confidence; declines in
occupancy and average daily rate; limited visibility with respect
to future bookings; loss of key personnel; domestic and
international political and geo-political conditions, including
political or civil unrest or changes in trade policy; hostilities,
or fear of hostilities, including future terrorist attacks, that
affect travel; travel-related accidents; natural or man-made
disasters such as earthquakes, tsunamis, tornadoes, hurricanes,
floods, wildfires, oil spills, nuclear incidents, and global
outbreaks of pandemics or contagious diseases, or fear of such
outbreaks; our ability to successfully achieve certain levels of
operating profits at hotels that have performance tests or
guarantees in favor of our third-party owners; the impact of hotel
renovations and redevelopments; risks associated with our capital
allocation plans, share repurchase program, and dividend payments,
including a reduction in, or elimination or suspension of,
repurchase activity or dividend payments; the seasonal and cyclical
nature of the real estate and hospitality businesses; changes in
distribution arrangements, such as through internet travel
intermediaries; changes in the tastes and preferences of our
customers; relationships with colleagues and labor unions and
changes in labor laws; the financial condition of, and our
relationships with, third-party property owners, franchisees, and
hospitality venture partners; the possible inability of third-party
owners, franchisees, or development partners to access capital
necessary to fund current operations or implement our plans for
growth; risks associated with potential acquisitions and
dispositions and the introduction of new brand concepts; the timing
of acquisitions and dispositions and our ability to successfully
integrate completed acquisitions with existing operations; failure
to successfully complete proposed transactions (including the
failure to satisfy closing conditions or obtain required
approvals); our ability to successfully execute on our strategy to
expand our management and franchising business while at the same
time reducing our real estate asset base within targeted timeframes
and at expected values; declines in the value of our real estate
assets; unforeseen terminations of our management or franchise
agreements; changes in federal, state, local, or foreign tax law;
increases in interest rates, wages, and other operating costs;
foreign exchange rate fluctuations or currency restructurings; lack
of acceptance of new brands or innovation; general volatility of
the capital markets and our ability to access such markets; changes
in the competitive environment in our industry, including as a
result of the COVID-19 pandemic, industry consolidation, and the
markets where we operate; our ability to successfully grow the
World of Hyatt loyalty program and Unlimited Vacation Club paid
membership program; cyber incidents and information technology
failures; outcomes of legal or administrative proceedings;
violations of regulations or laws related to our franchising
business; and other risks discussed in the Company's filings with
the SEC, including our annual report on Form 10-K, which filings
are available from the SEC. All forward-looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements set forth
above. We caution you not to place undue reliance on any
forward-looking statements, which are made only as of the date of
this press release. We do not undertake or assume any obligation to
update publicly any of these forward-looking statements to reflect
actual results, new information or future events, changes in
assumptions or changes in other factors affecting forward-looking
statements, except to the extent required by applicable law. If we
update one or more forward-looking statements, no inference should
be drawn that we will make additional updates with respect to those
or other forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221129005474/en/
Media contact for further information:
Hyatt: Franziska Weber franziska.weber@hyatt.com
Investor Contact: Noah Hoppe noah.hoppe@hyatt.com
Dream Hotel Group: Katie Fontana
kfontana@dreamhotelgroup.com
Hyatt Hotels (NYSE:H)
Historical Stock Chart
From Feb 2023 to Mar 2023
Hyatt Hotels (NYSE:H)
Historical Stock Chart
From Mar 2022 to Mar 2023
