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Hyatt plans to enter all-inclusive resort segment
Hyatt Hotels has announced plans to enter the all-inclusive segment in partnership with owner, operator and developer of all-inclusive resorts Playa Hotels & Resorts.
Hyatt expects to invest a total of US$325m (€245m, £211m), consisting of US$100m (€75m, £65m) for a 20 per cent ownership stake in Playa and US$225m (€170m, £146m) for convertible preferred stock in Playa.
Playa’s hotel portfolio will include 13 resorts totalling 5,800 rooms across the Dominican Republic, Mexico and Jamaica.
In connection with the Hyatt investment, Playa will enter into franchise agreements with Hyatt for six of the 13 resorts, which will operate under Hyatt brands following the completion of renovations.
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.
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.
Stephen Haggerty, global head, real estate and capital strategy for Hyatt said that the all-inclusive segment has grown rapidly over the past 20 years and the new deal is a response to that.
“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.”