In a major deal, Hyatt Hotel Corporation has agreed to buy Apple Leisure Group for USD 2.7 billion. The deal will help Hyatt expand its reach in the recreational travel market, which is showing some good recovery signs. The luxury resort market has a lot of scopes and the deal comes at a time when more and more people rush to go for holidays after long periods of lockdown. The deal to acquire Newtown Square-based Apple Leisure will help Hyatt to make the most out of the current trend. Hyatt said that the acquisition of a luxury vacation and resort management firm will be funded through cash and debt financing. The US hotel group also said that it would add another USD 2 billion worth of assets in its ongoing program to the hotel real estate sales. This would help it pay down the debt.
The multinational hospitality company is currently focusing on generating around 80 percent of its total revenues from management fees by 2024. This means that the company is shifting attention from owning and leasing hotels. The deal has valued Apple Leisure at USD 2.7 billion – including debt. After the deal, the global resort’s footprint of the Hyatt Hotels would be just double. It will have around 33,000 more hotel rooms spread across 10 countries. Also, the deal would add 28,500 employees to Hyatt, which had to lay off many of its head office staff during the coronavirus pandemic. Hyatt’s chief executive officer Mark Hoplamazian said that leisure travel was proved to be most resilient and the demand is going to last for long.
“The deal would double the number of resorts we already have globally. Apple Leisure is negotiating for 40 new resorts. This is good for us as leisure travel has been consistently in demand,” Hoplamazian said. The big hotel chain was quick to grab the deal in order to increase its presence in luxury leisure travel. Ease in international travel restrictions has helped luxury leisure travel bounce back much quicker. This is why several other hotel groups have announced to either launch or increase their presence in a luxury resort brand. While Marriott said that it looking to increase all-inclusive resort offering, InterContinental Hotel Group has announced that it would soon launch a luxury resort brand.