Hyatt to Buy Lifestyle-Hotel Firm Two Roads for $480 Million
(Bloomberg) -- Hyatt Hotels Corp. agreed to acquire an independent lodging company partly owned by late founder Jay Pritzker’s son as it increases its investment in lifestyle hotels.
Hyatt will acquire Two Roads Hospitality, whose brands include Thompson Hotels and Alila Hotels & Resorts, for $480 million. Hyatt plans to create a dedicated lifestyle division after the deal’s completion later this year, combining brands such as Andaz and Hyatt Centric with Two Roads’ flags. It plans to invest as much as $120 million in Two Roads after the closing, according to a statement announcing the acquisition.
Two Roads, formed through the 2016 merger of Lowe Enterprises’ Destination Hotels and Geolo Capital’s Commune Hotels & Resorts, manages more than 85 properties and has another 35 hotels in its development pipeline. Geolo’s co-founder is John Pritzker, whose brother currently serves as Hyatt’s executive chairman.
“It’s very consistent with our strategy, which is to maximize our core business and extend our brand for the benefit of World of Hyatt members,” Chief Executive Officer Mark Hoplamazian said in an interview. Two Roads’ brands “are positioned at the high end of their respective segments, same as Hyatt. They’re clearly attracting higher-end travelers, which is very consistent with our customer base.”
Hyatt is attempting to increase the number of aspirational hotels on its booking platform while also reducing its property holdings. In February, the company agreed to sell three properties, including the Andaz Maui at Wailea Resort, to Host Hotels & Resorts Inc. for $1 billion. In August, it announced a partnership with Small Luxury Hotels of the World, adding a collection of 500 independent hotels to the World of Hyatt loyalty program.
With Two Roads, Hyatt is also adding Joie de Vivre Hotels, Destination Hotels and tommie, a micro hotel brand, helping Hyatt reach an expanded audience of leisure travelers. The deal improves the appeal of the entire system and helps Hyatt compete against its peers, according to Lukas Hartwich, a senior analyst at Green Street Advisors.
Geolo will continue to own the real estate in a number of Two Roads hotels, John Pritzker said in an interview. That includes the Joie de Vivre’s Carmel Valley Ranch, in Carmel, California, and the Thompson Seattle. "It redefines the term ironic for me to be selling to Hyatt," he said. "Probably nobody is happier than my mother."
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