In mid-August 2021, Hyatt announced a major acquisition. This is an update to note that this agreement has now been finalized, and we have more of a sense of when World of Hyatt members can expect to benefit from this. As I said at the time, this acquisition is likely to be quite polarizing, with some consumers being super excited, and others being totally indifferent.
In this post:
Hyatt buying Apple Leisure Group for $2.7 billion
Hyatt has completed its acquisition of Apple Leisure Group (ALG), which is a resort-management services, travel, and hospitality group. ALG has now been purchased for $2.7 billion in cash from KKR and KSL Capital Partners.
For those not familiar with ALG, it’s a company largely focused on selling package holidays, along with managing resorts in the Caribbean, Mexico, Europe, and beyond. ALG manages AMResorts, which includes Alua, Breathless, Dreams, Secrets, Sunscape, and more. ALG also has over a dozen subsidiaries, including Apple Vacations, CheapCaribbean.com, Southwest Vacations, United Vacations, Unlimited Vacation Club, and more.
ALG’s portfolio includes over 33,000 rooms operating in 10 countries. The portfolio has grown at a fast pace, from nine resorts in 2007 to approximately 100 resorts by the end of 2021, with 24 more executed deals in the pipeline.
How Hyatt explains Apple Leisure Group acquisition
Hyatt has spent a huge amount of money on this acquisition. As a point of comparison, in 2018 Hyatt acquired Two Roads Hospitality (which brought us brands like Alila and Thompson) for $480 million. Now the company has spent more than five times as much on Apple Leisure Group.
So, what’s the rationale? As it’s described, here’s what Hyatt is hoping to gain by acquiring ALG:
- An expanded footprint in luxury and resort travel — this acquisition is expanding Hyatt’s presence in luxury leisure travel, as it will double the number of resorts Hyatt manages, and will allow Hyatt to offer the largest portfolio of luxury all-inclusive resorts in the world
- Major expansion in Europe — this will grow Hyatt’s European footprint by 60%, and will allow the Hyatt brand to enter 11 new European markets
- An expanded platform for growth — ALG’s developer and owner base will expand Hyatt’s relationships with committed partners in key complementary geographies
- Hotel owners will benefit — owners of Apple Leisure Group resorts will have access to a much broader collection of brands (in other words, we could see some of these hotels rebranded under one of Hyatt’s existing brands), along with the backing of Hyatt’s global distribution, sales, and marketing
- More options for World of Hyatt members — it’s expected that these resorts will be integrated into World of Hyatt in 2022, allowing members to earn and redeem points, and take advantage of elite perks
- This will expand Hyatt’s end-to-end leisure travel offerings — ALG Vacations is one of the largest package tour providers and leisure travel distribution platforms in North America, so Hyatt could get more into the package holiday business
- This allows Hyatt to grow its asset-light strategy — ALG is asset-light, and with Hyatt continuing to sell real estate assets, the company hopes to increase the percent of revenue generated from fees
Here’s how Hyatt CEO Mark Hoplamazian described the acquisition when it was first announced:
“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. The addition of ALG’s properties will immediately double Hyatt’s global resorts footprint. 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.”
My take on Hyatt’s acquisition
We knew for a while that Hyatt was looking to acquire a hotel brand in order to grow in Europe. I was excited about that concept, though personally I can’t say I’m excited about the execution here. A few thoughts:
- This reflects that Hyatt is looking to grow in the leisure market, which is logical at this point, given that it’s anyone’s guess when business travel will get back to 2019 levels
- This is a huge purchase — Hyatt’s market cap is $7.3 billion, and this is a $2.7 billion acquisition, so proportionally this is almost like when Marriott purchased Starwood
- The heavy focus on all-inclusives is going to be polarizing — some people love all-inclusives (especially those with families and those who like hanging out at resorts), while others don’t enjoy this type of vacation
- I think it might be a stretch to suggest that all/most of these properties are “luxury resorts,” as I’d say most of these properties are more mid-range
- Assuming there’s not a major rebranding of existing resorts, Hyatt is getting worse than Marriott here in terms of the number of hotel brands it will have
- Browsing Apple Leisure Group’s portfolio, there’s not a single hotel that jumps out and me and makes me say “I can’t wait to stay/redeem points here!” (which isn’t to say I won’t stay at one, but it’s not like when Hyatt acquired Two Roads Hospitality, and I suddenly saw a dozen hotels I desperately wanted to stay at)
- I really wish Hyatt’s acquisitions were a bit more strategically focused for consumers in terms of growing on its core value proposition; while I’m not a huge IHG fan, I love how IHG wanted to grow in the luxury space, and then acquired Kimpton, Regent, and Six Senses, all of which are great brands (gosh, I would have loved if Hyatt acquired Six Senses instead!)
- One can’t help but wonder the long-term impact on World of Hyatt for acquisitions like these, especially since they’re largely going after those who book package holidays; presumably these hotels have a lower fee structure and feel that they don’t need to offer as many rewards, since that might not be what motivates people to book one of these properties
Bottom line
Hyatt has completed its acquisition of Apple Leisure Group, which is Hyatt’s biggest acquisition yet. This will greatly expand Hyatt’s footprint in the all-inclusive resort market, especially in the Caribbean, Mexico, and Europe. For consumers who like all-inclusive properties, this is great news. For others, it’s probably quite a bit less exciting.
What do you make of Hyatt’s acquisition of Apple Leisure Group?
I am disappointed because the UVC I joined many years ago gave my husband and I affordable travel-not so much anymore as many of the hotels I visited have not stayed in the group and HYatt is so high end that we cannot afford to visit as often as we like. There are no perks to try to urge us into travelling and saving a few bucks- we are gold preferred but prices have gotten so inflated we will never be able to at least try a HYAtt hotel
I will say this again, how does this acquisition by Hyatt affect Choice Hotels. Currently, Choice Hotel points can be used to book this very same properties, usually ranging between 40k and 60k hotel points. I am curious to see how Hyatt prices this properties with regards to points.
I'm not particularly excited about Hyatt being 'asset-light' - that means they will have less and less skin in the game, and their whole thing becomes a marketing/booking service. Then when hotel operators decide they're going rogue, there won't be much Hyatt can do about it.
(Real life example: Marriott.)
Oh and second real life example all the crappy Hyatt properties that still 'can't serve Globalists breakfast because Covid.' I'm looking at you, Waikiki Centric of Cheap Owner.
I think Ben is correct, I would never stay at an all inclusive resort either, ( remembering Club Med ) he’s merely pointing out a new business acquisition which in itself is great news.
This acquisition will be very successful for them. Many people love their Ziva/Zilara all inclusive resorts. I wish they would add more European regular hotels though. Their footprint in Europe is still minuscule.
I stayed at Zoëtry Paraiso de la Bonita Riviera Maya last May. It was terrible stay, very slow service and seems unable to live up to 4 or 5 star reputation. Feel bad for friend who have wedding there and spent thousands but not getting what she pay for.
I'll give some all-inclusive resorts a chance though since it's sometime nice to WORRY nothing but chill, eat, drink, and sleep. Just hope services, etc will be better.
This is not only brave on the part of Hyatt to invest a huge amount of cash, it does go to show that Hyatt is comfortable in charting a strategic course which would value add to their Brand portfolio and diversify the brand segments.
Strategic Indeed, was it right or wrong only time will tell.
Increase in Brand value and footprint, yes!
I wasn't a fan either of all inclusives. However the unlimited vacation brand of all inclusive resorts is definitely quality and a game changer for those that don't prefer them. ALG has resorts listed in Article secrets, dreams, breathless and more with partners.
I think you should check out the newly opened Secrets in Puerto Vallarta. A friend recently stayed there and by her Snapchats and Instagram stories, it looked extremely upscale. I can understand not being thrilled about Dreams or Sunscape, but Zoëtry, Secrets, and Breathless I’ve heard very good things about, and all appear to be quite swank.
Ehhh. No thanks. If the past acquisitions by Hyatt are any indication, this translates to 100+ more Category 7 or 8 properties that I’ll never stay at.
Benefits the Business traveler? No thanks, as I’m a 100% leisure traveler.
This seems like a quick fix for Hyatt Marketing to squawk about. Meanwhile, WoH members don’t see a reasonable benefit imho.
Am I missing something here? Why the negativity about this acquisition? People generally love Hyatt but say they lack the number of hotels in comparison to Marriot, Hilton and IHG. They just added about 100 properties that you'll be able to book with points. Pretty sure this isn't the last purchase Hyatt ever makes. Think of it this way, before yesterday Hyatt had 100 less properties than they do today.
These places are NOT luxury. They're Days Inn Level resorts that happen to be on the beach. All-Inclusive is meh, but these are not luxury hotels. Words matter. I've been to Dreams for a friends wedding. It was the worst hotel I've stayed at in 10 years. A cheap Cruise Ship on the ground.
Makes Hyatt feel less desirable to me. Brand dilution.
Love Hyatt, but had high hopes for a different acquisition. I agree with your sentiments, very little to appeal to me. This is a big letdown because the one thing I don't like about Hyatt is its small footprint.
To play devil's advocate, maybe that's the point? Appeal to a new type of customer? Maybe they see the Covid writing on the wall for cruise lines and know that all-inclusive vacations will appeal to...
Love Hyatt, but had high hopes for a different acquisition. I agree with your sentiments, very little to appeal to me. This is a big letdown because the one thing I don't like about Hyatt is its small footprint.
To play devil's advocate, maybe that's the point? Appeal to a new type of customer? Maybe they see the Covid writing on the wall for cruise lines and know that all-inclusive vacations will appeal to that customer. That industry won't be the same for years or decades, these types of hotels will appeal to someone unwilling to get on a cruise ship and risk the Coronavirus-Norovirus roulette but still want that type of vacation.
As a Globalist and a father of a 2 year old working on making another one, this is very exciting news for me. Any increase in Hyatt hotels in Mexico and the Caribbean is FANTASTIC. You complainers need to quit yer bitchin'. If it's so bad, go be loyal to Marriott.
I guess people are ignoring the elephant in the room.
What will Hyatt do with the non-property assets.
Hyatt didn't buy a hotel portfolio, they bought a tour and travel agent company. Apple leisure is a tour company with hotels not the other way around.
The real question is, will Hyatt be entering this market as a player or will they remain in the hotel business and break up ALG to pieces.
I have stayed at several Hyatt Ziva's and had wonderful experiences (especially the Hyatt Ziva Cap Cana). I wonder if Hyatt is going to rebrand most/all these all inclusives to Zivas or Zilaras. I have kids, I'm a globalist, and we love all-inclusives in the Caribbean, so this is an ideal acquisition for customers like me. These all-inclusives also compete directly with the cruise industry, which may take years to return to it's previous dominance,...
I have stayed at several Hyatt Ziva's and had wonderful experiences (especially the Hyatt Ziva Cap Cana). I wonder if Hyatt is going to rebrand most/all these all inclusives to Zivas or Zilaras. I have kids, I'm a globalist, and we love all-inclusives in the Caribbean, so this is an ideal acquisition for customers like me. These all-inclusives also compete directly with the cruise industry, which may take years to return to it's previous dominance, so I think it makes great financial sense for Hyatt to make this move.
Aren't all of the Ziva/Zilara properties owned/run by Playa Resorts? I would guess they would have some objections to using the same branding for these "new" properties, particularly since some are going to be directly competing with existing Ziva/Zilara properties.
I agree that this acquisition is not exciting to me. I don't care for all-inclusive properties, so I won't be interested in most of these properties. We travel to explore new places, eat delicious local foods and explore, all of these are generally harder with all-inclusive properties.
I am not excited by this at all but if it’s makes some money for Hyatt, good for them.
People are being really funny when accusing Ben of not understanding how expensive or exclusive this or that all-inclusive property is. You all sound like someone excited about an Olive Garden attached to some expensive mall
Well the irony for me in this announcement, and the subsequent OMAAT article, it’s unreal.
Just got back from an “unlimited luxury” stay at Secrets Maroma (seemed like a good burn of sapphire points, last-min getaway). What a lousy letdown - the place was anything but relaxing but instead, an adult day care with cheap and cheesy amenities to say the least. Really opened my eyes into this segment of resorts (aside from The Excellence,...
Well the irony for me in this announcement, and the subsequent OMAAT article, it’s unreal.
Just got back from an “unlimited luxury” stay at Secrets Maroma (seemed like a good burn of sapphire points, last-min getaway). What a lousy letdown - the place was anything but relaxing but instead, an adult day care with cheap and cheesy amenities to say the least. Really opened my eyes into this segment of resorts (aside from The Excellence, which was very solid - I’ve never tried AM) - even with Hyatt’s management, I will steer clear.
Would have loved for them to buy Excellence, its the only all-inclusive i will ever consider. Finest and Beloved are excellent (no pun intended) value and its a trip i like to make every year. Probably for the best that Hyatt did not buy them to keep Excellence Group a secret (again no pun intended either)
1) This seems like a macro call on growth of leisure travel, especially relative to business travel. Leisure travel appeals to all income levels, so if you want to get big in leisure travel, it can’t be all 100% super luxury.
2) I am not a big fan of all inclusive either, but it is a big segment
3) Folks like Ben should just focus more on cash bookings at high end, independent and...
1) This seems like a macro call on growth of leisure travel, especially relative to business travel. Leisure travel appeals to all income levels, so if you want to get big in leisure travel, it can’t be all 100% super luxury.
2) I am not a big fan of all inclusive either, but it is a big segment
3) Folks like Ben should just focus more on cash bookings at high end, independent and boutique hotels. Loyalty programs aren’t going to be narrowly tailored to people’s tastes. Just book by specific location
Totally agree. Ben’s generally biased against all-inclusive (which is a great option for aspirational middle class consumers, in particular.) There are a ton of very amazing properties here. I’ve barely looked it over but am already excited about the top level “eco” brand available on Isles Mujares near Cancun and nice looking property near Tulum. The lower level properties will also be great for attracting younger families into Hyatt.
This acquisition locks Hyatt into...
Totally agree. Ben’s generally biased against all-inclusive (which is a great option for aspirational middle class consumers, in particular.) There are a ton of very amazing properties here. I’ve barely looked it over but am already excited about the top level “eco” brand available on Isles Mujares near Cancun and nice looking property near Tulum. The lower level properties will also be great for attracting younger families into Hyatt.
This acquisition locks Hyatt into a hot emerging market (maybe not to Ben’s bourgeois taste) and lowers Hyatt’s exposure to business travel which in the age of Zoom may *never* recover (at least proportionally).
Now if they just buy Motel1 in Europe (another one Ben will pan) and rebrand it to Canopy they will be set.
As for the cost… Hyatt’s money structure is completely different from most other public companies due to the Pritzkers. As long as they think Hyatt can afford it, Hyatt can. Pritzkers lose interest and Hyatt will be gone (acquired) - regardless of any acquisitions.
JG,
I love Motel1 in Europe and they have been expanding at a fast clip. Great for short trips with affordable pricing in great central locations. Would absolutely love if they bought it but not sure I would want it to be rebranded to Canopy.
You clearly have never stayed at an AMResort property. I think this another one of your ill-advised articles.
This is huge for Hyatt leisure travellers, espcially those with families.
I for one am super-excited about this. Previously, there were only a few upscale/luxury all-inclusives you could use Hyatt points at. Now there are dozens.
Short of buying Excellence Resorts or Velas Resorts, this is probably the best purchase they could have made to increase their luxury A-I portfolio (save for Sunscape). Having the additional booking methods and travel agent access, as TrvlGuru pointed out, probably sold this deal, but these resorts are the...
I for one am super-excited about this. Previously, there were only a few upscale/luxury all-inclusives you could use Hyatt points at. Now there are dozens.
Short of buying Excellence Resorts or Velas Resorts, this is probably the best purchase they could have made to increase their luxury A-I portfolio (save for Sunscape). Having the additional booking methods and travel agent access, as TrvlGuru pointed out, probably sold this deal, but these resorts are the icing on the cake here for WoH members.
Agree. Terrible article and he’s getting more and more biased/entitled/opinionated/self-focused in his old(er) age (whereas IMHO he seemed a lot more balanced and objective in the past which is why I liked reading him). He and Gary L should pair up.
Funny to see various posts and comments in the travel blog sphere criticizing Hyatt acquisition.
Hyatt hired competent professionals assessing/reviewing these deals. They are far more knowledgeable than armchair commenters and travel bloggers who believe they know better how to run a Hotel group
@ Julia -- Did I, or anyone else, say that this was a bad investment? All I said is that I'm personally not excited about this as a consumer, based on my own travel patterns, and that Hyatt is spending a lot of money here. I think both of those are factually correct?
I'm not overly excited about this news but there are probably some interesting hotels hidden in the portfolio in Spain that might come in useful. I do wonder how Hyatt will approach the issue of the Secrets brand being couples only when they have been so LGBTQ+ friendly. Didn't Secrete continually have issues with this?
@ Christian -- Did they, that's interesting, as I don't think I've heard that before? Have they not been welcoming to LGBTQ couples, or?
I have no experience with this but I thought they had issues in the past....maybe it was Sandals after all and not Secrets.
@Christian (and Ben), Sandals was structurally homophobic in the past (as were all such resorts). They lost a discrimination suit in 2004 and were forced to accept gay and lesbian couples as guests.
Secrets is NOT couples only, it’s just a focus. I went solo last year to Secrets the Vine in Cancun and ocean skinny dipped with a gay gentleman from Texas and a 60-something lady who was there with a girlfriend. Very diverse crowd at Secrets - all-inclusive and people inclusive resort.
Resorts across all companies have had issues with this in Jamaica for a while, but Secrets has had no issues as a brand as far as I know of. Was looking at wedding venues for a gay wedding in Mexico and read nothing but praise for the Secrets location we looked at (Playa Mujeres).
Not sure I like this. Secrets, Zoetry & Sunscape properties were bookable using Choice Hotel points for between 40k-60k points per night. I planned to use the reminder of my Choice points for booking one of those properties in Mexico or Jamaica. I will assume Choice points will not be a option for booking these properties in the near future.
@Jason, I agree with your take on this as well. Ben's "meh" headline was kinda "meh". ALG is one of, if not the largest travel industry wholesalers in the world. Hyatt has been a travel agent friendly brand and now they just bought access to all those travel agents selling leisure travel through ALG. This will help funnel guests to current Hyatt properties and away from their competition. This is very exciting as it is...
@Jason, I agree with your take on this as well. Ben's "meh" headline was kinda "meh". ALG is one of, if not the largest travel industry wholesalers in the world. Hyatt has been a travel agent friendly brand and now they just bought access to all those travel agents selling leisure travel through ALG. This will help funnel guests to current Hyatt properties and away from their competition. This is very exciting as it is going to flip the script. They didn't just buy AM Resorts. They bought a whole new business model.
@khatl: In Mexico/Caribbean, they are the following brands:
-Zoetry: luxury that kids can stay at but targeted to adults-only
-Secrets: luxury adult-only romantic
-Breathless: luxury adult-only social
-Dreams: upscale family-friendly
-Sunscape: budget family-friendly
The first three are huge to me as they are a great portfolio of adult-only/targeted all-inclusives that are way outside of what most people would consider all-inclusive. Looking forward to seeing what Hyatt does here.
@khatl: In Mexico/Caribbean, they are the following brands:
-Zoetry: luxury that kids can stay at but targeted to adults-only
-Secrets: luxury adult-only romantic
-Breathless: luxury adult-only social
-Dreams: upscale family-friendly
-Sunscape: budget family-friendly
The first three are huge to me as they are a great portfolio of adult-only/targeted all-inclusives that are way outside of what most people would consider all-inclusive. Looking forward to seeing what Hyatt does here.
I find your reaction to be truly bizarre. It is a HUGE step for Hyatt because many of these properties are all inclusive resorts at great locations. While I love traveling to Europe and get very excited when Hyatt adds hotels in Italy or France, getting a long list of high quality all inclusive resorts available for points would get most Hyatt members excited.
By the way, your comment about CheapCarribean.com shows you ignorance....
I find your reaction to be truly bizarre. It is a HUGE step for Hyatt because many of these properties are all inclusive resorts at great locations. While I love traveling to Europe and get very excited when Hyatt adds hotels in Italy or France, getting a long list of high quality all inclusive resorts available for points would get most Hyatt members excited.
By the way, your comment about CheapCarribean.com shows you ignorance. There’s nothing cheap about what they sell. It’s just a marketing ploy. They are one of the best sources of luxury resort packages.
@ Jason -- "There's nothing cheap about what they sell?" I'm seeing all-inclusive resorts for well under $100 per person per day. Honest question -- how much cheaper can all-inclusives get?
The high-end of the pricing of what I'm seeing in some destinations is a Planet Hollywood property that's all-inclusive. Nothing wrong with that, of course, but if that's the most premium property, and we're calling this an acquisition of "luxury resorts," maybe you can...
@ Jason -- "There's nothing cheap about what they sell?" I'm seeing all-inclusive resorts for well under $100 per person per day. Honest question -- how much cheaper can all-inclusives get?
The high-end of the pricing of what I'm seeing in some destinations is a Planet Hollywood property that's all-inclusive. Nothing wrong with that, of course, but if that's the most premium property, and we're calling this an acquisition of "luxury resorts," maybe you can see where my skepticism comes from?
Are you looking at the right group, Ben? These are not the Royalton properties under the Marriott umbrella. Go look at the Zoetry in Isla Mujeres or the one in Riviera Maya and let me know if those are still "cheap" to you. I'd go there in a heartbeat on points if I could.
Do you have a list of all ALG's properties? Curious as to what they all are.
Not available on their website?