by Hyatt has announced its latest acquisition, and it’s an interesting…
Dream Hotel Group joins the Hyatt portfolio
Hyatt will acquire Dream Hotel Group’s lifestyle hotel brands and management platform, including Dream Hotels, Chatwal Hotels and Unscripted Hotels with properties in the Americas, Europe and Asia.
This asset-light acquisition will initially add 12 hotels to Hyatt’s portfolio, with an additional 24 hotels expected to open in the future. When complete, the expansion will add 1,700 rooms to Hyatt’s lifestyle portfolio and increase Hyatt’s New York City room count by more than 30%.
Hyatt will pay a base purchase price of $125 million, with up to $175 million more to be paid over the next six years as properties come into the pipeline and open. Management fees associated with the base purchase price of $125 million are expected to be approximately $12 million per year with hopes of increasing to $27 million per year as more properties open.
This transaction is expected to close in the coming months, subject to customary closing conditions. Once the deal is closed, Hyatt will work to add these hotels to the World of Hyatt loyalty program to allow members to earn and redeem points and take advantage of elite perks.
The basics of the Dream Hotels portfolio
For those unfamiliar with Dream Hotels, they are basically known as party hotels with destination bars and nightclubs. As Hyatt puts it, these hotels are known for their “vibrant dining and nightlife experiences, including hotspot restaurants, lavish entertainment venues and exclusive nightclubs, built on strategic collaborations with innovative and award-winning industry leaders.”
While these hotels undoubtedly have a certain personality, I’d say they’re lifestyle rather than luxury properties. To compare them to other major hotel brands, they are probably most similar to W Hotels or Thompson Hotels.
So which hotels can we expect to join Hyatt?
- Dream Hotels currently has properties in Bangkok, Doha, Hollywood, Nashville, New York City (Downtown and Midtown) and South Beach
- Chatwal has properties in New York City and the Catskills; Interestingly, the Chatwal New York is currently part of Marriott’s Luxury Collection, so I expect that to change
- Unscripted Hotels has a property in Durham
The Dream Hotels brand is expected to grow significantly, with future locations planned in Atlanta, Cleveland, Dallas, Las Vegas, Louisville, Memphis, Miami, Oklahoma City, Palm Springs, San Antonio and Valle de Guadalupe.
Here is how Hyatt CEO Mark Hoplamazian describes this acquisition:
“We have great respect for what Dream Hotel Group Founder Sant Singh Chatwal and Chief Executive Officer Jay Stein and her team have created and are grateful for the trust Dream Hotel Group is placing in us to deliver their Nurturing brands and continuing their success into the future. We look forward to continuing our growth trajectory with more than 600 new Hyatt family members who will continue to expand our lifestyle expertise and build on the success of our dedicated lifestyle division. We look forward to offering our guests and loyalty members even more inspiring experiences and festive programs, and bringing the value of the Hyatt network to a growing number of discerning hotel owners and developers around the world.”
bottom line
Hyatt acquires the Dream Hotel Group. We can expect about a dozen hotels to join World of Hyatt in the coming months, and up to two dozen more hotels in the future. The Dream Hotel Group is known for its lifestyle hotels, including Dream properties as well as Chatwal properties.
These should be some great additions to the Hyatt portfolio, especially for those who like lifestyle properties. Hyatt’s continued growth in New York is particularly impressive, as it’s amazing how this portfolio has grown over the past decade.
What do you think of Hyatt acquiring Dream Hotel Group?
