Hyatt has announced its latest acquisition, and this one is interesting…
Dream Hotel Group joins the Hyatt portfolio
Hyatt will acquire Dream Hotel Group’s lifestyle hotel brands and management platform, including Dream Hotels, Chatwal Hotels and Unscripted Hotels, with properties in the Americas, Europe and Asia.
This light acquisition will initially increase Hyatt’s portfolio by 12 hotels, with another 24 properties expected to open in the future. Upon closing, the expansion will add 1,700 rooms to Hyatt’s lifestyle portfolio and increase Hyatt’s room count in New York by more than 30%.
Hyatt will pay a base purchase price of $125 million, with up to an additional $175 million paid over the next six years as properties enter the pipeline and open. Management fees associated with the base purchase price of $125 million are expected to be approximately $12 million per year, and we expect this figure to increase to $27 million per year as new properties will open.
This transaction is expected to close in the coming months, subject to customary closing conditions. Once the agreement is reached, Hyatt will work to add these properties to the World of Hyatt loyalty program, giving members the opportunity to earn and redeem points and enjoy elite benefits.
The basics of the Dream Hotels portfolio
For those unfamiliar with Dream Hotels, they are basically known as party hotels with destination bars and nightclubs. As Hyatt describes it, these hotels are known for their “vibrant dining and nightlife experiences, including hotspot restaurants, lavish entertainment venues, and exclusive nightclubs built on strategic collaborations with innovative industry leaders and award-winning”.
While these hotels undoubtedly have a certain personality, I would say they are more lifestyle properties than luxury properties. To compare them to other major hotel brands, they are probably the most similar to W Hotels or Thompson Hotels.
So, what establishments can we expect to join Hyatt?
- Dream Hotels currently has properties in Bangkok, Doha, Hollywood, Nashville, New York (Downtown and Midtown) and South Beach
- Chatwal owns properties in New York and the Catskills; Interestingly, the Chatwal New York is currently part of Marriott’s Luxury Collection, so I guess that will change
- Unscripted Hotels owns property in Durham
The Dream Hotels brand is expected to experience significant growth, with future locations planned in Atlanta, Cleveland, Dallas, Las Vegas, Louisville, Memphis, Miami, Oklahoma City, Palm Springs, San Antonio and Valle de Guadalupe.
Here’s how Hyatt CEO Mark Hoplamazian describes the acquisition:
“We have tremendous respect for what Dream Hotel Group Founder Sant Singh Chatwal and CEO Jay Stein and their team have created and are grateful for the trust Dream Hotel Group places in us to care for their brands and continue their success in the future. We look forward to continuing our growth journey with more than 600 new members of the Hyatt family who will further enhance our lifestyle expertise and expand the success of our dedicated lifestyle division. We are excited to offer even more inspiring experiences and celebratory programs to our loyal guests and members and to bring the value of the Hyatt network to a growing number of discerning hotel owners and developers around the world.
At the end of the line
Hyatt acquires Dream Hotel Group. We can expect about a dozen properties to join World of Hyatt in the coming months, and up to two dozen more in the future. Dream Hotel Group is known for its lifestyle hotels, including Dream properties, as well as Chatwal properties.
These should be great additions to Hyatt’s portfolio, especially for those into lifestyle properties. In particular, it’s impressive to see Hyatt’s continued growth in New York, as it’s amazing how this portfolio has grown over the past decade.
What do you think of the acquisition of Dream Hotel Group by Hyatt?
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