Hyatt Plans to Enter the All-Inclusive Resort Segment
CHICAGO–(BUSINESS WIRE)–Jul. 19, 2013–?Hyatt Hotels Corporation?(NYSE: H) today announced that a wholly owned Hyatt subsidiary plans to enter the all-inclusive segment in partnership with?Playa Hotels & Resorts B.V.?(?Playa?). Playa was created with the goal of becoming a leading owner, operator and developer of all-inclusive resorts. Hyatt expects to invest a total of?$325 million, consisting of?$100 million?for an approximate 20 percent ownership stake in Playa and?$225 million?for convertible preferred stock in Playa.
Playa?s hotel portfolio will include 13 resorts totaling approximately 5,800 rooms across theDominican Republic,?Mexico?and?Jamaica. In connection with the Hyatt investment, Playa will enter into franchise agreements with Hyatt for six of the 13 resorts, or approximately 2,800 rooms, which will operate under Hyatt brands following the completion of significant renovations.
Under an agreement with Hyatt, Playa will pursue the acquisition or development of new all-inclusive resort opportunities under Hyatt?s brands and it will also have certain rights to operate Hyatt-branded all-inclusive resorts in five Latin American and?Caribbean?countries on an exclusive basis through 2018.
?The all-inclusive segment has grown rapidly over the past 20 years,? said?Stephen Haggerty, global head, real estate and capital strategy for Hyatt. ?This transaction will position us to introduce Hyatt?s authentic hospitality to a new guest base, while offering great new resort options in sought-after destinations to our existing guests. Our agreement with Playa also provides us with a platform for future global growth in an attractive segment, and our investment is structured to generate strong returns through our common and preferred interests as well as recurring franchise fees.?
The first two Hyatt-branded all-inclusive resorts, located in?Mexico, will be introduced later this year following multimillion-dollar renovations of existing properties. Four additional Hyatt-branded resorts in?Jamaica,?Mexico?and the?Dominican Republic?are expected to be introduced in 2014 and 2015.
The Hyatt investment is subject to closing conditions, including, among other things, approval by relevant authorities and completing certain other transactions. The investment is expected to occur during the third quarter of 2013, although there can be no assurance when or if such transaction will be completed.
The term ?Hyatt? is used in this release for convenience to refer to?Hyatt Hotels Corporation?or one or more of its affiliates.