Hyatt’s focus on European growth instead of Asia looks like a smart call in light of the erratic recovery in China, where many of Hyatt’s competitors have focused their development pipelines.
Hyatt will have a hefty growth story to tell later this week on its third quarter earnings call.
The Chicago-based hotel company closed Tuesday on a $2.7 billion acquisition of Apple Leisure Group. The takeover doubles Hyatt’s global resorts portfolio and provides the company with its sought-after expansion into Europe.
The deal also gives Hyatt a boost in its push into all-inclusive resorts, which has been underway since 2013.
“Hyatt’s acquisition of ALG represents a brand-defining moment in our more than 60-year history and builds on our legacy as a hospitality leader,” Hyatt CEO Mark Hoplamazian said in a statement. “Hyatt and ALG have highly complementary brand portfolios and share a deep commitment to colleague and guest experiences focused on care.”
Hoplamazian announced Hyatt leaders were exploring brand acquisitions to fuel European growth on the company’s second quarter earnings call in early August. Hyatt went public with the ALG deal weeks later.
The focus on Europe at the time was a curious one, given Asia Pacific and China were seen as the hotel industry’s global leader in the pandemic recovery. But given China’s zero-tolerance approach to containing the virus, a shift toward the U.S. and Europe is one analysts expect many hotel companies will do this earnings season.
The ALG portfolio comprises of roughly 100 hotels and resorts in 10 countries as well as a 24-property development pipeline across Europe and the Americas. The acquisition also enables Hyatt to enter 11 new European markets and expand its footprint across the continent by 60 percent. Hyatt also gains more footing in the all-inclusive resort sector thanks to ALG’s resort brand management platform AMResorts and brands like Dreams and Secrets.
“We strongly believe we can achieve more together and are excited by the opportunities ahead for our expanded family, including our ALG team members, who are excited to join a larger global organization,” Apple Leisure Group CEO Alejandro Reynal, who will continue to lead the ALG business within Hyatt, said in a statement. “With Hyatt’s added expertise, we expect to accelerate our expansion as we welcome more travelers and turn vacation dreams into life-long memories.”
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Photo credit: Hyatt's Apple Leisure Group takeover includes the Secrets Mallorca Villamil Resort & Spa (pictured). Hyatt