Hyatt to Partner with Playa Hotels & Resorts, Add All-Inclusive Resorts to Portfolio
- Jul 31, 2013
A wholly owned Hyatt subsidiary intends to form a partnership agreement with Playa Hotels & Resorts B.V. and enter the all-inclusive resort segment. Created with a goal of becoming a top owner, operator and developer of all-inclusive resorts, Playa’s hotel portfolio will include 13 resorts totaling around 5,800 rooms spread across the Dominican Republic, Mexico and Jamaica.
Hyatt is expecting to invest $100 million for an approximate 20 percent ownership stake in Playa and $225 million for convertible preferred stock in Playa, amounting to a total investment of $325 million. Following an agreement between Hyatt and Playa, the latter will pursue the purchase or development of new, all-inclusive resort opportunities under Hyatt’s brands and will reserve certain rights to operate exclusively Hyatt-branded, all-inclusive resorts in five Latin American and Caribbean countries through 2018.
“This transaction will position us to introduce Hyatt’s authentic hospitality to a new guest base, while offering great new resort options in sought-after destinations to our existing guests,” said Stephen Haggerty, global head, real estate and capital strategy for Hyatt. “Our agreement with Playa also provides us with a platform for future global growth in an attractive segment, and our investment is structured to generate strong returns through our common and preferred interests as well as recurring franchise fees.”
Later this year the first two Hyatt-branded all-inclusive resorts will be introduced following multimillion-dollar renovations of existing properties in Mexico. In 2014 and 2015, four additional Hyatt-branded resorts are expected to be introduced in Jamaica, Mexico and the Dominican Republic.
Depending on closing conditions, such as approval by relevant authorities and completion of certain other transactions, the Hyatt investment is expected to occur during the third quarter of 2013. As of March 2013, Chicago-based Hyatt Hotels Corporations’ worldwide portfolio featured 508 properties in 46 countries.