Hyatt’s latest acquisition plans will expand its footprint in New York and beyond

Hyatt’s shopping spree for new brands isn’t over yet.

The Chicago-based hotel giant plans to acquire the smaller Dream Hotel Group’s lifestyle hotel brand and management platform in a deal that could be worth $300 million, the companies announced Tuesday. Dream Hotel Group’s hotels operate primarily in the lifestyle segment – hotels that focus on high-end food and beverage offerings and design. These hotels rely on locals to fill their restaurants and bars just as they rely on out-of-towners to fill their guest rooms.

Details of the dream contract

Dream Hotel Group operates hotels under the brands Dream Hotels, Chatwal Hotels and Unscripted Hotels in America, Europe and Asia. The acquisition will be a big boost for Hyatt (and Hyatt World loyalists); The Chatwal New York will expand the company’s presence in New York City by more than 30% with the addition of hotels such as Dream Downtown, Dream Midtown and The Time New York.

The move follows Hyatt’s recent deal with Germany’s Lindner Hotels AG to expand its footprint in Europe. The deal, while not a takeover, followed Hyatt’s purchase of Apple Leisure Group for $2.7 billion in the all-inclusive resort space.

“We are excited to provide even more inspiring experiences and holiday programs to our guests and loyal members, and to bring the value of the Hyatt network to a growing number of hotel owners and developers around the world,” said Hyatt CEO Mark Hoplamazian. .

The deal includes a portfolio of 12 existing hotels and a pipeline of 24 more hotels in various stages of development. The timeline for brand integration is uncertain, as The Chatwal is part of New York Marriott’s Luxury Collection of hotels. The acquisition is expected to close “in the coming months.”

A Hyatt spokeswoman declined to provide further details on the specifics of the brand’s integration timeline.

The buzziest hotel included in the deal is The Chatwal Lodge in upstate New York, about two hours from New York City. Named after Dream Hotel Group founder Sant Singh Chatwal, the ultra-luxury resort has just 11 guest rooms and suites and earns high marks for its service and food and beverage offerings.

The current lineup of Dream Hotels means Hyatt will get a boost in other markets where it already operates, such as Nashville, Los Angeles and Miami’s South Beach neighborhood. There are also Dream Hotels in Bangkok and Phuket, Thailand, and work is underway for destinations such as Las Vegas and Doha, Qatar.

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According to the Dream Hotel Group website, the company is also working to bring more Chatwal resorts to Mexico.

Hyatt’s strategy

Hyatt’s plan to acquire Dream Hotel Group’s lifestyle hotel division is more about increasing its presence in sectors the hotel company considers strong, rather than filling gaps.

In recent months, investor analysts have often pointed to Hyatt as a smart investment play. This is due to the brand’s increased push into lifestyle and leisure hotels that have performed best during the pandemic, even in the worst months, and an emphasis on maintaining attractive brands for group meetings, events and business travel.

However, Hyatt’s focus on leisure has taken off in recent years.

The company’s acquisition of Two Roads Hospitality in 2018 brought brands such as Thompson Hotels, Alila and Joie de Vivre (now operated as JdV by Hyatt). The Apple Leisure Group deal doubled Hyatt’s resort portfolio overnight and expanded its presence in Europe by 60%. The Lindner partnership in Germany, where most of the hotels are planned to be converted to the JdV brand, will be added to this European expansion.

The German partnership isn’t the only one: Hyatt partnered with Japan’s Kiraku earlier this fall to launch a collection of hot spring ryokans (a type of Japanese inn) that will feature regional architecture, cuisine and activities. The deal comes as Hyatt expands its US-based Miraval wellness brand.

“We have successfully integrated incredible lifestyle brands like Thompson Hotels, and Dream Hotel Group joining Hyatt is a perfect fit given that experience,” Hoplamazian told TPG via email. “It’s been great getting to know the Dream Hotel Group team this past month, and they’ve been working on the best way to bring their lifestyle brands into the Hyatt portfolio after the transaction closes. What’s unique and special about these brands, including their nightlife and holiday dining venues and experiences it is important that we pay special attention.”

Structural changes

After the Dream Hotel Group acquisition closes, Hyatt will integrate the properties into the Hyatt World network. The base price of the deal is $125 million, with an additional $175 million contingent on other hotels in the development pipeline actually opening.

Dream Hotel Group founder Chatwal will remain with the company as the owner of four existing hotels and two additional hotels currently in the works. Dream Hotel Group CEO Jay Stein will join Hyatt as head of Dream Hotels to manage the integration into the Hyatt portfolio.

“Hyatt hotels have a proven track record of preserving what makes the lifestyle special and are the ideal new home for our growing Dream Hotel Group brands,” said Chatwal. “As the owner of Dream Hotel Group properties, I look forward to the next part of our journey and am confident that the future lies ahead for our hotels, owners, guests and team members who are part of the Hyatt family.”

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