The budget for acquisitions at Hyatt appears to have no limit.
The Chicago-based hotel giant is in talks with Playa Hotels & Resorts for “potential strategic alternatives,” which could include an acquisition. Playa is a major operator of all-inclusive resorts in the Caribbean and Mexico and has been subject to hotel industry chatter in recent years regarding its takeover potential as major brands like Hyatt, Hilton, Marriott and IHG Hotels & Resorts all move more into the all-inclusive resort sector.
Hyatt already owns a nearly 10% stake in Playa and has properties within the Playa portfolio, such as the Hyatt Zilara Rose Hall and Hyatt Ziva Rose Hall in Jamaica and Zilara and Ziva properties in the Dominican Republic and Mexico. Any potential takeover of the broader Playa brand would come after a flurry of buying activity from Hyatt in recent years.
The company made its all-inclusive resort splash with a $2.7 billion Apple Leisure Group takeover, which added brands like Secrets and Dreams to the Hyatt portfolio. In the last several years, Hyatt has also purchased lifestyle brands like The Standard and its sibling brands, Me and All, Dream Hotel Group and the luxury and lifestyle booking platform Mr & Mrs Smith.
The play for Playa would cement Hyatt’s status as a leading all-inclusive resort operator from the legacy hotel brands. It also comes only months after Hyatt announced a new partnership with Grupo Pinero, owner of the Bahia Principe Hotels & Resorts and Cayo Levantado Resort brands, that increased Hyatt’s all-inclusive resort portfolio by 30%.
“Playa has been a valuable partner for many years, is one of the world’s strongest operators of all-inclusive resorts, and owns a premier portfolio of high-quality, high-end all-inclusive resorts in iconic locations and key markets across the Caribbean and Mexico,” Hyatt CEO Mark Hoplamazian said in a prepared statement Monday morning. “Strategic alternatives under consideration could have compelling strategic merit to add new incremental durable fee streams for Hyatt. We remain steadfastly committed to our asset-light business model and if this process continues, we will continue to map out a clear path for an asset-light outcome for any strategic alternatives we undertake.”
Daily Newsletter
Reward your inbox with the TPG Daily newsletter
Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts
It’s unclear exactly how these talks might shake out, and Hyatt’s announcement noted the company “does not intend to comment further on these discussions unless and until a definitive agreement has been fully executed.” But it’s abundantly clear that the World of Hyatt is rapidly expanding to cater more to all-inclusive resort clientele.
There’s also the thorny issue of how Playa has ties to several of Hyatt’s key competitors, as some of the company’s properties in the Dominican Republic, Jamaica and Mexico fall under various Marriott, Hilton, IHG and Wyndham brands.
How that shakes out (or potentially unravels) will be a major source of industry chatter in the new year, as it is clear each of these companies sees a need to be involved in all-inclusive resorts — and likely doesn’t want to cede any ground or properties to Hyatt.
Related reading:
