Hyatt Hotels Corp. has entered into a definitive agreement to acquire Apple Leisure Group (ALG), including AMResorts. The US$2.7-billion acquisition, expected to close in the fourth quarter of 2021, subject to regulatory approval, will enable Hyatt boost its presence in the luxury resort sector and immediately double its global resorts footprint with the addition of almost 100 ALG properties.

AMResorts provides management services to the largest portfolio of luxury all-inclusive resorts in the Americas under the AMR Collection brand portfolio, including well-known brands Secrets, Dreams, Breathless and Zoetry resorts and spas, as well as the fast-growing Alua brand, which is expanding in European leisure destinations.

The acquisition also includes ALG’s membership offering, Unlimited Vacation Club, travel distribution business ALG Vacations, as well as destination management services and travel technology assets. Following the completion of the transaction, ALG’s business will continue to be led by current ALG CEO Alejandro Reynal and the current ALG leadership team. Reynal will become a member of Hyatt’s executive leadership team and report to Hyatt CEO Mark Hoplamazian.

“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,” said Hyatt president and CEO Mark Hoplamazian.

He added, “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.”

ALG’s hotel portfolio consists of over 33,000 rooms operating in 10 countries. The portfolio has grown from nine resorts in 2007 to approximately 100 properties by the end of 2021 and has a pipeline of 24 executed deals with a large number of additional hotels in the development process.

ALG’s Unlimited Vacation Club is an exclusive travel club whose 110,000 members have access to preferred rates and other benefits at AMR Collection properties.

“Combining Hyatt’s deep expertise and global brand footprint with ALG’s strong resort brands, operating capabilities and robust development plans will elevate our differentiated position and create a leader in luxury leisure travel,” said Apple Leisure Group Alejandro Reynal CEO, adding he anticipates “a robust growth journey ahead…”

“Today is a great milestone in what has been a story of growth, resilience, and dedication to world-class leisure experiences by an outstanding team at Apple Leisure Group,” said Chris Harrington and Rich Weissman, partners at KKR and KSL Capital Partners, respectively. “There is simply no better home for ALG to continue on its growth trajectory than being part of Hyatt.”

Hyatt/Apple list the following strategic rationale for the move:

• Expand footprint in luxury and resort travel: The acquisition will expand Hyatt’s presence in luxury leisure travel and immediately add approximately 100 hotels and a pipeline of 24 executed deals in Europe and the Americas to its portfolio. Following completion of the transaction, Hyatt will offer the largest portfolio of luxury all-inclusive resorts in the world, will double its global resort footprint, will be the largest operator of luxury hotels in Mexico and the Caribbean, and will expand its European footprint by 60%. The acquisition will extend Hyatt’s brand footprint into 11 new European markets, greatly enhancing Hyatt’s growth potential in Europe, a critical region for global growth in leisure travel.

• Expand platform for growth: ALG’s strong developer and owner base will expand Hyatt’s relationships with partners in key complementary geographies. Hyatt’s global network of developers and its operational expertise is expected to further accelerate growth of ALG brands. Hyatt plans to apply the combined strength of the teams to expand beyond ALG’s current pipeline in new geographies in which ALG does not currently have hotels.

• Benefit owners: Access to ALG’s owned distribution platforms and its extensive experience in leisure travel are expected to provide significant opportunities for Hyatt’s existing resorts. Owners of AMRTM Collection properties will receive increased access to a much broader collection of brands, and the backing of Hyatt’s global distribution, sales and marketing.

• Increase choice and experiences for guests: The combined resources of ALG and Hyatt will open up expanded offerings and experiences for the benefit of the combined companies’ high-end guest and customer base. ALG’s exclusive membership offering, Unlimited Vacation Club, will bring more than 110,000 highly passionate travellers closer to Hyatt when travelling for a variety of stay occasions apart from vacations. Following completion of the transaction, Hyatt will determine ways in which World of Hyatt and Unlimited Vacation Club can bring added value and unique loyalty benefits to their member bases while benefitting hotel owners.