Hyatt CEO Bullish on Luxury Leisure Travel after ALG Deal

Hyatt CEO Mark Hoplamazian discussed the company’s deal to acquire Apple Leisure Group (ALG) during a Monday call with investors.

“We’re very bullish on leisure travel. It’s proven its resiliency and durability,” said Mark Hoplamazian, president and CEO of Hyatt, on an investor call this morning. “Leisure travel has recovered more quickly than business travel. We’re excited about luxury in particular because we expect the global luxury travel market to grow at about 11% from 2021 to 2027.”

The $2.7 billion cash deal, which is expected to close in the fourth quarter of 2021, adds more than 100 AMResort Collection properties in 10 countries to Hyatt’s portfolio. The deal will expand Hyatt’s global brand presence in luxury leisure travel, particularly in Europe, where the company will enter popular resort destinations like Greece and the Canary Islands.

Hoplamazian sees “incredible opportunity with luxury resorts in Southern Europe, a region where branded resorts are only 2% of total rooms, versus 10% for Mexico and Caribbean,” as well as bringing all-inclusive resorts to new markets in Europe, the Middle East, and Asia, “regions where this concept has not yet satisfied growing demand.”

“We are just scratching the surface of five-star luxury experience in Europe, and there’s more opportunity for distinct and differentiated four-star experience in the Americas,” he said.

In terms of logistically bringing ALG onboard – including its distribution platforms and proprietary technology, in addition to its portfolio of luxury all-inclusive brands – Hoplamazian said “the company will largely look the same as it does now, recognizing all-inclusive management is a different distribution base.”

The CEO also sees “major areas of opportunities” in leveraging ALG Vacations, the largest tour operator and vacation packager in North America, with four travel distributions brands serving B2B (Apple Vacations, Funjet Vacations, Travel Impressions, Blue Sky Tours Hawaii) and B2C markets (CheapCaribbean.com, BeachBound), as well as airline vacation brands, Southwest Vacations, and United Vacations.

“Packaging sounds trivial, but it’s actually very complex. And with the Mark Travel acquisition, ALG gained a very powerful platform for packaging, something that we recognize as something that can be leveraged for other Hyatt-branded resorts and hotels,” Hoplamazian said. “With incredible reach and great brand reputation, capabilities for booking into resorts, ALGV can provide extra support in shoulder season.”

“The second dimension is that the Amstar business is very experienced in working with providers of on-the-ground experiences in different markets. And we see an opportunity to bring those experiences to travelers at other Hyatt resorts.”