Hyatt Hotel Corporation is taking over the operator of a hotel-casino under development on the Las Vegas Strip. This project is included in the deal that the industry giant and Dream Hotel Group announced whereby a Hyatt affiliate will purchase Dream Hotel Group’s lifestyle hotel brand and management platform, which includes properties in some of the world’s most renowned hotel markets in the Americas, Europe, and Asia.
Dream Hotel Group facilities are recognized for their exciting dining and nightlife experiences, which include hotspot restaurants, extravagant entertainment venues, and exclusive nightclubs that are the result of strategic collaborations with creative and award-winning industry leaders. The acquisition will broaden Hyatt’s brand presence in major cities like as Nashville, Hollywood, South Beach, Durham, multiple New York City sites, and one in the Catskills. Contracts signed reflect new important destinations such as Las Vegas, Saint Lucia, and Doha.
This asset-light purchase will feature a portfolio of 12 managed or franchised lifestyle hotels, as well as another 24 signed long-term management agreements for hotels that will operate in the future. This development will add approximately 1,700 rooms to Hyatt’s lifestyle portfolio and boost Hyatt’s room count in New York City by more than 30% when it is completed.
Following the acquisitions of Two Roads Hospitality in 2018 and Apple Leisure Group in 2021 – and, most recently, Hyatt’s collaborative agreement with German Lindner Hotels AG – this purchase maintains Hyatt’s asset-light expansion strategy.
Hyatt will pay a base acquisition price of $125 million at closing, with an additional $175 million available over the next six years as projects enter the pipeline and open. Stabilized management costs connected with the initial purchase price of $125 million are expected to be around $12 million, with additional stabilized management fees of up to $27 million if the contingent purchase price of $175 million is paid.
On predicted stable profits, the entire base purchase price plus the contingent purchase price implies an appealing acquisition multiple in the high single digits.
Subject to normal closing conditions, the deal is expected to conclude in the following months.
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