By Lauren Zumbach
From Chicago Tribune
CHICAGO—Hyatt is buying resort company Apple Leisure Group for $2.7 billion in a bet that luxury leisure travel will continue to recover from the COVID-19 pandemic.
“We are very bullish on leisure travel. It’s proven its resiliency and durability,” Hyatt CEO Mark Hoplamazian said during a webcast with investors Monday morning.
Chicago-based hotel company Hyatt will acquire Apple Leisure Group’s resort management company, AMResorts, which expects to have more than 33,000 rooms at 102 hotels by the end of the year, under brands including Secrets, Dreams, Breathless, and Zoetry.
None of AMResorts’ hotels are in the United States, and Hyatt said the deal will double its global network of resorts and expand its presence in international destinations like Europe, where it will increase Hyatt’s footprint by 60 percent. While more than half of AMResorts’ resorts are in Mexico and the Caribbean, there are 40 in Spain, where Hyatt has a single resort.
“We see an incredible opportunity with luxury resorts in southern Europe, a region where branded resorts are only 2 percent of total rooms compared with 10 percent in Mexico and the Caribbean, and in all-inclusive resorts in new markets in Europe, the Middle East and Asia, regions where this concept has not yet satisfied growing demand,” Hoplamazian said.
Hyatt is also purchasing Apple Leisure Group’s Unlimited Vacation Club membership program and travel distribution business.
Hyatt said it expects to fund more than 80 percent of the acquisition from investment firms KKR and KSL Capital Partners with $1 billion in cash and new debt financing, with another $500 million in equity financing. The company also committed to selling an additional $2 billion in hotel real estate by the end of 2024 and said it would use the proceeds to pay down debt. The deal is expected to close in the fourth quarter of this year, Hyatt said.
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