Hyatt Sells Alila Ventana Big Sur For $150 Million

Seventh paragraph, second sentence: lost money is written twice

As long as Ventana Big Sur remains a Hyatt property and its excellent level of service and benefits doesn't decline, this sale should be fine for Hyatt guests and WOH members.

I'm keenly interested in seeing the quality of the new Apple Leisure Group properties, however. Hope their addition continues to uphold Hyatt's quality brand image.

As someone in the industry with a lot of exposure to deals like this, I definitely think your second theory is right - Hyatt acquired it to add a long-term management agreement contingency and then remarket it for sale. Not to sound dismissive, but $150M is a pretty small pittance to a company like Hyatt, and does little to offset the balance sheet impact of a $2.7B acquisition. Hyatt is not in the business of owning real estate, and they know that. But they also are smart enough to understand the importance of this one single asset to the overall value proposition of WOH. Ensuring this remains a Hyatt is a win-win for them and their WOH members, and cost very little to do, as you note.

Now, the more interesting question will be "how much will Host influence/dictate how Hyatt runs this property over time?" REITs in general are not known for improving the guest experience, and have the collective reputation of Scott Kirby in his pre-United days. While perhaps not initially, I think they will try to drive ancillary revenues over time and push Hyatt, as their operator, to think more like an owner in the management of Alila Big Sur.

Yup looking at Hyatt's last 10-K they own just 38 Hotels but managers 984 hotels so they own about 3% of their properties, its not their core business. Most of the 34 they own are all Hyatt Regencys and prime downtown hotels in Nyc, chicago, austin. So makes no sense for them to hold onto this Alila. They own the three Miravals so i would imagine they looking to offload those here too in 2022. So something to keep an eye on Lucky.

https://www.sec.gov/Archives/edgar/data/1468174/000146817421000011/h-20201231.htm

I booked this hotel for my gf's sister in October and her experience sounded different from ours. We last went December 2020. She said that service was pretty good but the food was so-so: overcooked steak, something was too salty. I wonder if this drop in quality has to do with the property changing hands. We're going in December and will see if things have changed compared to the last 2 years.

I'm pretty sure they didn't want to lose the property but couldn't line up a buyer in time so they had to temporarily take it over.

$150MM is a blip. If they were hard up for cash they definitely shouldn’t have done the announced transaction. Come on.

I know someone high up it was because they didn’t want to lose the management agreement. Nothing more. Sold it to friendly buyers.

Have to agree with the others. This likely had absolutely nothing to do with the Apple purchase. First, it might have been announced in August, but a deal of that size would have been worked on for at least 6-12 months. There's no way they didn't internally know in June that they were very close to acquiring Apple. So it wasn't an "oops" situation. Also, $150mil is pretty small potatoes and doesn't materially improve their balance sheet.