London (CNN Business)Hyatt is expanding its reach in luxury resorts, betting that pent-up demand following the pandemic will boost demand for upmarket leisure travel.
The US hotel group said in a statement Sunday that it has agreed to buy luxury resorts operator Apple Leisure Group from private equity firms KKR and KSL Capital Partners for $2.7 billion. The acquisition will double Hyatt’s global resorts footprint and make it the largest operator of luxury hotels in Mexico and the Caribbean. It will also extend its presence into 11 new markets in Europe, “a critical region for global growth in leisure travel,” Hyatt (H) said.
The deal is the latest move by an international hotel chain to expand in luxury travel, which is leading the industry’s recovery following the coronavirus pandemic, according to travel research company Skift. InterContinental Hotels Group (IHG) — which also operates chains including Crown Plaza and Holiday Inn — last week announced plans to launch a new “luxury and lifestyle” brand, expanding its portfolio of high-end hotels.
Demand for leisure is expected to outstrip business travel coming out of the pandemic, as many companies continue with remote working. High levels of excess savings, particularly among wealthy households, are also expected to boost spending on travel.
Business travel has disappeared. Will it ever come back?Read More”The travel market is now, in effect, a leisure market,” Accenture’s European head of travel and hospitality, Miguel Flecha said in a recent report. “Travel companies need to reposition themselves for the post-pandemic market by activating a new strategy based on leisure travel.”Apple Leisure Group manages the largest portfolio of luxury all-inclusive resorts in the Americas — including brands such as Zoëtry and Secrets Resorts & Spas — as well as Alua Hotels & Resorts, which is expanding in Europe.The company’s hotel portfolio has grown from nine resorts in 2007 to about 100 properties and 33,000 rooms in 10 countries, with a large number of additional hotels in development.Hyatt CEO Mark Hoplamazian said the deal would help “transform” the hotel group’s earnings profile.
The company aims to generate 80% of its revenue from management fees, as opposed to owning hotels, by the end of 2024. It expects to sell $3.5 billion of hotel real estate over the next three years, including $1.5 billion of properties this year. “[Apple Leisure Group’s] portfolio of luxury brands, leadership in the all-inclusive segment and large pipeline of new resorts will extend our reach in existing and new markets, including in Europe,” Hoplamazian said.
Source: edition.cnn.com