Hyatt’s new-brand shopping spree isn’t over yet.
The Chicago-based hotel giant plans to buy the smaller Dream Hotel Group’s lifestyle hotel brand and management platform in a deal that could cost up to $300 million, the companies announced on Tuesday. The hotels of the Dream Hotel Group operate mostly in the lifestyle segment – hotels that focus on upscale food and beverage offerings and design. These hotels rely on locals to fill their restaurants and bars almost as much as they rely on outside guests to fill their guest rooms.
Details of the dream deal
The Dream Hotel Group operates hotels under the Dream Hotels, Chatwal Hotels and Unscripted Hotels brands in the Americas, Europe and Asia. The acquisition would be a huge boost for Hyatt (and World of Hyatt loyalists); it would expand the company’s footprint in New York City by more than 30% by adding hotels like The Chatwal New York, Dream Downtown, Dream Midtown and The Time New York.
The move comes after Hyatt recently reached an agreement with Germany’s Lindner Hotels AG to expand its presence in Europe. While this deal wasn’t an acquisition, it did follow Hyatt’s $2.7 billion acquisition of Apple Leisure Group in the all-inclusive resorts space.
“We’re excited to offer our guests and loyalty members even more inspiring experiences and festive programs, and to bring the value of the Hyatt network to a growing number of discerning hotel owners and developers around the world,” said Mark Hoplamazian, Hyatt CEO , in a statement .
The transaction includes a portfolio of 12 existing hotels and a pipeline of another 24 hotels in various stages of development. Brand integration timeline is unclear as The Chatwal New York is part of the Marriott Luxury Collection of hotels. The acquisition is expected to be completed “in the coming months.”
A Hyatt spokesman declined to go into further detail on the brand integration timeline.
The liveliest hotel included in the deal is The Chatwal Lodge, a resort in upstate New York two hours from New York City. Named after Dream Hotel Group founder Sant Singh Chatwal, the ultra-luxe resort houses just 11 guest rooms and suites and gets high marks for service and food and drink options.
Dream Hotels’ current lineup means Hyatt would get a boost in other markets it already operates in, such as Nashville, Los Angeles and Miami’s South Beach neighborhood. There are also Dream Hotels in Bangkok and Phuket, Thailand, and more are on the way for locations like Las Vegas and Doha, Qatar.
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According to the Dream Hotel Group website, the company is also working to bring several Chatwal resorts to Mexico.
Hyatt’s strategy
Hyatt’s plan to acquire Dream Hotel Group’s lifestyle hotel division is less about filling gaps and more about increasing its presence in sectors the hotel company sees as its strength.
In recent months, Hyatt has frequently been called a smart investment by investor analysts. This is due to the brand’s increasing foray into lifestyle and leisure hotels – which have performed best during the pandemic, even in the worst months – and an emphasis on retaining brands that appeal to group meetings, events and business travel.
However, Hyatt’s propensity for leisure has gained momentum in recent years.
The company’s acquisition of Two Roads Hospitality in 2018 brought in brands such as Thompson Hotels, Alila and Joie de Vivre (which now operates as JdV by Hyatt). The deal with Apple Leisure Group doubled Hyatt’s resort portfolio overnight and expanded its European footprint by 60%. The Lindner partnership in Germany – where most hotels are set to switch to the JdV brand – will contribute to this European expansion.
The Germany partnership isn’t the only one: Hyatt partnered with Japanese company Kiraku earlier this fall to launch a line of hot-spring ryokans (a type of Japanese inn) that encompass regional architecture, cuisine, and activities . That deal came amid Hyatt’s expansion of its US-based wellness brand, Miraval.
“We have successfully integrated incredible lifestyle brands like Thompson Hotels, and Dream Hotel Group’s addition to Hyatt is a perfect fit given that experience,” Hoplamazian told TPG via email. “It has been wonderful getting to know the team at Dream Hotel Group over the past few months and working to best integrate their lifestyle brands into the Hyatt portfolio post-closing. It is important that we maintain what is unique and special about these brands, including their distinct focus on nightlife and festive dining venues and experiences.”
structural changes
Upon completion of the Dream Hotel Group acquisition, Hyatt will integrate the hotels into the World of Hyatt network. The base price of the deal is $125 million, with an additional $175 million pending the actual opening of the other hotels in the development pipeline.
Chatwal, the founder of Dream Hotel Group, will remain associated with the company as the owner of four existing hotels and two more currently in the works. Jay Stein, CEO of Dream Hotel Group, will join Hyatt as head of Dream Hotels to oversee the integration into the Hyatt portfolio.
“Hyatt has a proven track record of preserving what defines lifestyle hotels and is the ideal new home for our growing Dream Hotel Group brands,” Chatwal said in a statement. “As a Dream Hotel Group property owner, I look forward to the next part of our journey and am confident that our hotels, owners, guests and team members have a bright future ahead as part of the Hyatt family.”