In late September, Hyatt Hotels announced that it was exiting its vacation rental management business while launching an online short-term rental platform soon. Its Destination Residences Management unit was sold to a real estate investor called Lowe, which, through an affiliate, will run it under Lowe and Coral Tree, though no price was disclosed at the time of the announcement.
Now we have the details from Hyatt’s latest quarterly report filing. From the filing, below:
“Destination Residential Management—During the three months ended September 30, 2023, we sold our interests in the entities which own the Destination Residential Management business to an unrelated third party for $2 million of base consideration, subject to customary adjustments related to working capital and indebtedness, and up to an additional $48 million of contingent consideration. The contingent consideration will be earned within two years following the sale upon the achievement of certain performance-based metrics and the extensions of certain contracts related to the rental programs and/or homeowner associations. We recorded a $28 million contingent consideration receivable at fair value in other assets on our condensed consolidated balance sheet at September 30, 2023.
The transaction was accounted for as a business disposition, and we recognized a $19 million pre-tax gain in gains (losses) on sales of real estate and other on our condensed consolidated statements of income during the three months ended September 30, 2023. In conjunction with the disposition, we transferred $10 million of cash to the buyer related to advanced deposits. The operating results and financial position of this business prior to the sale remain within our Americas management and franchising segment.”