Earlier this year, Hilton announced plans to acquire a new hotel group. There’s an update, as these properties are now all bookable through Hilton channels, and are participating in Hilton Honors. Let’s cover all the details.
In this post:
Graduate Hotels join Hilton Honors portfolio
In a $210 million deal, Hilton has acquired the Graduate Hotels brand from Adventurous Journeys Capital Partners. The transaction closed in recent weeks, and these properties are now bookable through Hilton channels, and are fully integrated into the Hilton Honors program.
The Graduate Hotels brand is part of Hilton’s lifestyle portfolio, alongside Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, and Motto by Hilton. Graduate by Hilton is the company’s 24th hotel brand.
Hilton has acquired all rights to the Graduate Hotels brand worldwide, and has entered into a franchise agreement for all existing and signed pipeline Graduate Hotels properties, and is responsible for the brand’s future development and growth. However, Adventurous Journeys Capital Partners remains the owner of the actual properties (which makes sense, since Hilton has an asset light strategy).
When it comes to Hilton Honors partcipitation:
- Hilton Honors members can now redeem points at all Graduate by Hilton properties
- Hilton Honors members can now earn 10x points per eligible dollar spent, as is the case at all full service Hilton properties
- Standard Hilton Honors Gold and Hilton Honors Diamond elite perks apply, including a complimentary space available upgrade, late check-out subject to availability, a daily food & beverage credit (at US properties) or continental breakfast (at non-US properties), and more
Here’s how Hilton CEO Chris Nassetta describes this acquisition:
“Adding Graduate Hotels to our portfolio of award-winning brands accelerates our expansion in the lifestyle space by pairing an existing much-loved brand with the power of Hilton’s strong commercial engine to drive growth. We have long had a high bar for adding brands to our portfolio, whether organically or through acquisition, and Graduate will be another driver of growth for us, presenting a unique opportunity to serve more guests in more sought-after destinations. With thousands of colleges and universities around the world, we believe the addressable market for the Graduate brand is 400-500 hotels globally.”
What is the Graduate Hotels brand?
For those not familiar with the Graduate Hotels brand, it was founded back in 2014, and the company exclusively operates properties in college towns. Each property is designed to reflect the unique character of its local university, whether visiting for a game day, reunion, graduation, campus visit, or any other reason.
Currently the Graduate Hotels brand has around 35 properties either open or in the pipeline, in both the United States and United Kingdom. Current locations include places like Ann Arbor, Knoxville, Palo Alto, State College, Oxford, Cambridge, and more. Hilton is obviously investing here because the company sees big growth potential, and could imagine the brand opening up to 500 properties.
I’ve never stayed at a Graduate Hotels property, as I haven’t had much of a connection to any college town in the past decade. However, I’ve gotta say that these properties look pretty charming and location specific, so I love the concept.
We see so many lifestyle brands that are just painfully cookie cutter and indistinguishable, so I actually very much appreciate that Graduate Hotels tries to be something different, and is focused on a specific niche. I wish we saw more of that creativity from other hotel groups.
I think Hilton’s distribution power will help supercharge this brand. I’d view it as a positive that consumers can now stay at these properties while taking advantage of the power of a major hotel loyalty program.
Bottom line
Hilton has acquired the Graduate Hotels brand in a $210 million deal. These properties are operating under a franchise agreement, and have now joined Hilton Honors, as the company’s 24th hotel brand. It’s great that members can now earn and redeem points for stays at these properties. Hilton has absolutely massive growth plans, so I’m curious how this develops.
What do you make of Hilton acquiring Graduate Hotels?
They are nice, but overpriced...
I booked a 3-night reward stay for next month at Graduate by Hilton Princeton for 50K points/night (150K HH total). If I paid cash, the total for the 3 nights, including taxes & fees, would have come up to $1,450, meaning that I got an outsized redemption of nearly 1 cpp. That is a key aspect of this particular brand. The cash rates are generally quite high (over $400/night at Graduate Princeton), but the award...
I booked a 3-night reward stay for next month at Graduate by Hilton Princeton for 50K points/night (150K HH total). If I paid cash, the total for the 3 nights, including taxes & fees, would have come up to $1,450, meaning that I got an outsized redemption of nearly 1 cpp. That is a key aspect of this particular brand. The cash rates are generally quite high (over $400/night at Graduate Princeton), but the award rates will likely be quite reasonable because the hotels are located near or on college campuses. Therefore, best values will often be had by redeeming points at this exciting brand.
I stayed at the one in Providence, RI this spring. Fun concept. Public spaces were nice. It was a renovation of a fantastic Biltmore. Rooms were done cheaply (heavy, thick wallpaper in a bathroom never lasts long -- the moisture ruins it), but had amazing space (walk-in closet and separate living room). It isn't a luxury property, but I sort of like the vibe of a renovated historic property, even with warts. I agree -- nice pickup by Hilton.
I stayed in the one in Minneapolis. It was a nice hotel, and near the UM campus, but otherwise pretty unremarkable. Some small design touches specific to UM. Nothing to write home about, but also not bad at all.
Little known benefit to the Graduate in Minneapolis is that it has a direct tunnel to the Alumni Center if you are going to an event there and don’t tolerate cold.
Hilton is pretty brand heavy in downtown Iowa City: two Tapestry , a HGI & Graduate in original DT hotel as a Sheraton 8 properties in area. I’ve stayed at them all over the years :-)
Next week though at Hyatt DT using credit card free night
Go Hawks!
I'm not sure I would be happy if I owned a Tapestry property. This was one of the big issues in the Marriott acquisition of Starwood. Owners complained that they were being undercut and neglected or that they had a license or franchise from legacy Starwood to operate within a certain geographic radius. I know Marriott settled some of these issues out of court. There was also some litigation if I remember in Southeast Asia. Don't remember what happened there.
Enjoyed our stay at the Graduate Hotel in Tucson last December. Clean room, great location, nice staff.
Another huge missed opportunity by Hyatt.
Hyatt should have bought Kimpton. It didn't.
Hyatt should have acquired Starwood. It didn't.
Hyatt should have bought Radisson's USA brands. It didn't.
It seems like the only remaining options for USA expansion is Omni, Loews, and Grand America. Also, Outrigger would be a good fit given Hyatt's push toward resorts and all-inclusives.
These hotels are great if viewed through the proper lens. The Graduate model was to acquire aging, full service hotels in large college towns. They invested well in the public spaces, creating a really well-designed college-specific vibe in the lobby and bar/restaurant. The rooms are certainly not spectacular, but the theme carries through (mostly) and they're clean enough to be a great place to crash for a parents weekend, college drop off or football weekend.
...These hotels are great if viewed through the proper lens. The Graduate model was to acquire aging, full service hotels in large college towns. They invested well in the public spaces, creating a really well-designed college-specific vibe in the lobby and bar/restaurant. The rooms are certainly not spectacular, but the theme carries through (mostly) and they're clean enough to be a great place to crash for a parents weekend, college drop off or football weekend.
What I under-appreciated in terms of market size was how much business they are doing with non-marquis sports teams on a daily basis. When I was in Eugene, the ASU women's lacrosse team was there at the same time that the USC men's baseball team was there (on a Tuesday). That's not just the players but the coaches, assistant coaches, etc...
It's a nice business, a nice pick-up for Hilton and I think it's a great concept.
Especially when the only decent chain alternative in many of these college towns is a Courtyard.
Agree, hopefully they renovated the tired Sheraton in Iowa City ;-)
How does Iowa City support so many hotels outside the August-May period? I have to imagine some of these hotels are dead in December and early January to say nothing of June and July.
I agree the Graduate hotels are a great concept. I stayed at the ones in New Haven for a reunion and Evanston for a family graduation and they are nice stylish alternatives to the bland limited service hotels that are often the only options in smaller college towns.
My one critique is that the service standards were a little lower than I would expect for the cost. It seems like they hire a lot...
I agree the Graduate hotels are a great concept. I stayed at the ones in New Haven for a reunion and Evanston for a family graduation and they are nice stylish alternatives to the bland limited service hotels that are often the only options in smaller college towns.
My one critique is that the service standards were a little lower than I would expect for the cost. It seems like they hire a lot of students or student adjacent types with very little hospitality experience and they often have high level customer facing roles. Also, this probably varies by property, but I get the sense that some of their properties were formerly very rundown properties with poor facilities. The elevators at the Graduate in Evanston were ancient, slow, and didn’t always work. A couple family members with mobility issues were stranded for over an hour on a couple occasions during our stay.
I think that was their model. Buy older and distressed properties. At least initially. Spend a lot of money on interior design.
Some of the newer properties are purpose-built or at least conversions of newer buildings.
I've done the Graduate properties in East Lansing (Michigan State Univ.) and Oxford (Univ. of Mississippi). If you take the trendy design, the overall service is around a Courtyard-Four Points-Holiday Inn level. F&B is disappointing. Basically, just...
I think that was their model. Buy older and distressed properties. At least initially. Spend a lot of money on interior design.
Some of the newer properties are purpose-built or at least conversions of newer buildings.
I've done the Graduate properties in East Lansing (Michigan State Univ.) and Oxford (Univ. of Mississippi). If you take the trendy design, the overall service is around a Courtyard-Four Points-Holiday Inn level. F&B is disappointing. Basically, just cocktails, cheap wine and beer, and then bar food. I think some of the Graduate properties don't even have a breakfast restaurant.
Hyatt really missed out. This would have been a superb addition to Hyatt's footprint.
Thanks for the insight about the Eugene location, BC. Next time I'm staying in that town, I'll definitely check it out. It sounds so much better than those Motel 6-typle places along Franklin Blvd.
Have stayed in the Charlottesville, VA & Eugene, OR locations.
Both were pleasant experiences.