Hyatt Hotels Corporation has entered into a definitive agreement to acquire luxury resort management, travel and hospitality player Apple Leisure Group (ALG).
The deal will see Hyatt fork out US$2.7 billion ($3.7 billion) for ALG, which is owned by KKR and KSL Capital Partners. The transaction is expected to close in the fourth quarter of 2021, subject to customary closing conditions.
ALG’s hotel portfolio consists of over 33,000 rooms operating in 10 countries. The portfolio has grown from nine resorts in 2007 to approximately 100 properties by the end of 2021, and has a pipeline of 24 executed deals, with a large number of additional hotels in the development process.
ALG’s resort brand management platform, AMResorts, provides management services to the largest portfolio of luxury all-inclusive resorts in the Americas under the AMR Collection brand portfolio, which includes Secrets Resorts & Spas, Dreams Resorts & Spas, Breathless Resorts & Spas and Zoëtry Wellness & Spa Resorts.
The acquisition also includes ALG’s membership offering, Unlimited Vacation Club, travel distribution business ALG Vacations, as well as destination management services and travel technology assets.
Following the completion of the transaction, ALG’s business will continue to be led by current CEO Alejandro Reynal and his leadership team. Reynal will become a member of Hyatt’s executive leadership team and report to the hotel giant’s CEO, Mark Hoplamazian.
“With the asset-light acquisition of Apple Leisure Group, we are thrilled to bring a highly desirable independent resort management platform into the Hyatt family,” said Hoplamazian.
“The addition of ALG’s properties will immediately double Hyatt’s global resort footprint.
“ALG’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, and further accelerate our industry-leading net rooms growth.
“Importantly, the combination of this value-creating acquisition and the US$2 billion ($2.7 billion) increase in our asset sale commitment will transform our earnings profile, and we expect Hyatt to reach 80 per cent fee-based earnings by the end of 2024.”
Reynal said: “Combining Hyatt’s deep expertise and global brand footprint with ALG’s strong resort brands, operating capabilities and robust development plans will elevate our differentiated position and create a leader in luxury leisure travel.
“On behalf of everyone at ALG, I am grateful to our partners at KKR and KSL who supported us in building the platform into what it is today.
“I am excited to have our team join the Hyatt family, and I anticipate a robust growth journey ahead as the industry expands and we are able to provide a best-in-class leisure offering to an even larger group of travellers around the world.”
Chris Harrington and Rich Weissman, partners at KKR and KSL Capital Partners, respectively, said: “Today is a great milestone in what has been a story of growth, resilience and dedication to world-class leisure experiences by an outstanding team at Apple Leisure Group.
“There is simply no better home for ALG to continue on its growth trajectory than being part of Hyatt.”
Featured image source: Twitter/Secrets Resorts & Spas