Hyatt Ventures into Luxury Travel with Apple Leisure Group Buyout
In a recent announcement, American hotel giant Hyatt revealed its agreement to purchase luxury resort operator Apple Leisure Group (ALG) for a staggering $2.7 billion. This acquisition will substantially boost Hyatt's size and make it the leading luxury hotel operator in Mexico and the Caribbean.
Hyatt's expansion into 11 new European markets is a strategic move aimed at capitalizing on the booming vacation travel sector. According to the company, Europe is a critical region for global travel growth.
The deal with ALG comes as other international hotel chains, like InterContinental Hotels Group, are also focusing on high-end resorts. As remote work continues to be the norm post-pandemic, there's an expected increase in leisure travel over business trips. And with affluent families amassing extra savings, recreational expenses are projected to rise.
Miguel Flecha, Head of European Travel and Hotel Practice at Accenture, commented in a recent report that the travel market is now primarily a leisure market. Travel companies must adapt to this post-pandemic reality by introducing new strategies focused on leisure travel.
What Does Apple Leisure Group Offer?
Established in 2007, ALG manages the largest luxury all-inclusive resort portfolio in North America. Its brands include Zoëtry and Secrets Resorts & Spas, in addition to Alua Hotels & Resorts, which is expanding in Europe.
Since its launch, ALG's hotel portfolio has grown from nine properties to about 100 hotels and 33,000 rooms across ten countries, with further developments underway.
Mark Hoplamazian, Hyatt's CEO, stated that the merger will strengthen Hyatt's presence in existing and new markets, including Europe. He highlighted ALG's luxury brands, leadership in the all-inclusive segment, and upcoming resorts as key factors driving this growth.
Hyatt's Future Plans
Hyatt aims to generate 80% of its revenue from management fees by the end of 2024, shifting its focus away from property ownership. The company expects to sell $3.5 billion worth of hotel properties by 2024, with $1.5 billion of that happening this year.
Regarding the acquisition, Hoplamazian said, "ALG's collection of luxury brands, their dominant position in the all-inclusive sector, and their upcoming resorts will further expand our presence in both existing and emerging markets, including Europe."
By leveraging ALG's offerings, Hyatt aims to cater to a broader clientele with tailored luxury experiences while growing its affluent customer base. The deal signifies Hyatt's commitment to dominating the high-end, all-inclusive resort market.
Enrichment Data
- In 2021, Hyatt Hotels expanded its luxury travel business by acquiring Apple Leisure Group (ALG) for $2.7 billion.
- The acquisition added renowned brands like Secrets Resorts & Spas, Dreams Resorts & Spas, and Breathless Resorts & Spas to Hyatt's all-inclusive portfolio, making it more competitive in the luxury travel market.
- Hyatt's management portfolio expanded to over 100 resort properties with the acquisition, solidifying its position as a prominent player in the all-inclusive market.
- The deal is part of Hyatt's broader strategic growth plan, which began with the introduction of the Hyatt Ziva and Hyatt Zilara brands in 2013.
- Hyatt's acquisition of ALG has expanded its reach into new markets, particularly in the Caribbean and Latin America, making it a more attractive option for travelers seeking luxury all-inclusive experiences.
- The expanded portfolio is expected to enhance the overall guest experience and guest satisfaction, potentially influencing other travel companies to offer more inclusive and luxurious packages.
- The increased availability of luxury all-inclusive resorts is likely to cater to the trend towards multi-tripping and extended family vacations, as highlighted by Sabre's survey.
- Hyatt's adoption of sustainable management practices for its properties could influence the entire industry towards more sustainable tourism practices, setting a new standard for the market.
