Hyatt announced on Sunday has entered into a definitive agreement to acquire Apple Leisure Group (ALG), for $2.7 billion in cash.
ALG’s luxury all-inclusive resorts will double Hyatt’s global resorts footprint over the coming years with global expansion of the brand portfolio, including Secrets, Dreams and Zoëtry. ALG’s hotel portfolio consists of over 33,000 rooms operating in 10 countries.
The portfolio has grown from nine resorts in 2007 to approximately 100 properties by the end of 2021 and has a pipeline of 24 executed deals with a large number of additional hotels in the development process. Hyatt said it plans to expand beyond ALG’s current pipeline in new geographies in which ALG does not currently have hotels.
The deal will make Hyatt the largest operator of luxury hotels in Mexico and the Caribbean, while expanding the brand’s footprint by 60%. It will enter 11 new European markets, including Spain, Canary Islands, Balearic Islands and Greece.
The acquisition also includes ALG’s membership offering, Unlimited Vacation Club, travel distribution business ALG Vacations, Amstar,a destination services management company in Mexico and the Caribbean, its Hawaii-focused counterpart Worldstar, and Trisept Solutions, its leisure travel technology platform.
Access to ALG’s owned distribution platforms and its extensive experience in leisure travel are expected to provide opportunities for Hyatt’s existing resorts.Meanwhile, owners of AMR Collection properties will receive increased access to a much broader collection of brands, and the backing of Hyatt’s global distribution, sales and marketing.
The acquisition accelerates Hyatt’s asset-light strategy, which will sell additional $2 billion of hotel assets by the end of 2024.
“With the asset-light acquisition of Apple Leisure Group, we are thrilled to bring a highly desirable independent resort management platform into the Hyatt family,” Mark Hoplamazian, president and chief executive officer of Hyatt, said in a statement.
“ALG’s portfolio of luxury brands, leadership in the all-inclusive segment and large pipeline of new resorts will extend our reach in existing and new markets, including in Europe, and further accelerate our industry-leading net rooms growth. Importantly, the combination of this value-creating acquisition and the $2 billion increase in our asset sale commitment will transform our earnings profile, and we expect Hyatt to reach 80% fee-based earnings by the end of 2024.”
“Combining Hyatt’s deep expertise and global brand footprint with ALG’s strong resort brands, operating capabilities and robust development plans will elevate our differentiated position and create a leader in luxury leisure travel,” said Alejandro Reynal, chief executive officer of Apple Leisure Group.
The transaction is anticipated to close in the fourth quarter of 2021. Following the completion of the transaction, ALG’s business will continue to be led by current ALG CEO Alejandro Reynal and the current ALG leadership team. Reynal will become a member of Hyatt’s executive leadership team and report to Hyatt CEO Mark Hoplamazian.
In an email to travel partners, Gonzalo del Peón, group president of AMResorts Americas & Global Commercial, said that the existing AMR executive team is expected to remain in place, including Gabriel Felip as group president of AMResorts Global Operations as well as himself.
Del Peón added the AMR team "will work to ensure there is no disruption in business for our customers and partners."