Acquisitive Hyatt adds Dream portfolio

Hyatt Hotels Corp. has acquired for an initial US$125 million New York City-based Dream Hotel Group’s lifestyle hotel brand and management platform, including the Dream Hotels, The Chatwal Hotels and Unscripted Hotels brands.

The deal, initiated by Dream Hotel Group Founder Sant Singh Chatwal, will include 12 managed or franchised lifestyle hotels, with another 24 signed long-term management agreements for hotels expected to open in the future. Upon closing, this expansion will add over 1,700 rooms to Hyatt’s lifestyle portfolio and increase Hyatt’s room count in New York City by more than 30%.

Dream Nashville

Upon closing, Hyatt will pay a base purchase price of US$125 million, with up to an additional US$175 million over the next six years as new properties open. Stabilized management fees associated with the base purchase price of US$125 million are anticipated to be approximately US$12 million and, to the extent the contingent purchase price of US$175 million is paid, additional stabilized management fees are anticipated to be up to approximately US$27 million. The transaction is anticipated to close in the coming months.

The deal is forecast to aid Hyatt’s net unit growth with 0.5% additional rooms to the system initially or an additional 1.5% over the next several years. Wells analyst Dori Kesten noted that while the acquisition is a slight headwind to Hyatt’s goal for US$2 billion in net dispositions by the end of 2024 goal, it is not unexpected either.

Kesten and team expect the pricing of Dream Hotel Group will be viewed relatively positively, although continued recessionary worries may temper the positives for the near term with Dream properties having a high leisure and city exposure.

“Hyatt’s purpose to care for people so they can be their best is key to our culture – and is one of the reasons Dream Hotel Group Founder Mr. Chatwal approached us,” Hyatt President and CEO Mark Hoplamazian told HOTELS on Tuesday. “He was familiar with our proven track record in successfully integrating lifestyle brands including Two Roads Hospitality in 2018 while honoring and preserving the unique attributes that make the brands unique and powerful. At Hyatt, we have spent several months working toward the best way to bring Dream Hotel Group’s vibrant lifestyle brands into the Hyatt portfolio, preserving what is special about them, adding Hyatt’s capabilities to those of the Dream Hotel Group’s, and accelerating growth of the brands into the future.”

“We have tremendous respect for what Dream Hotel Group founder Sant Singh Chatwal and Chief Executive Officer Jay Stein and their team have created and are grateful for the trust being placed in us by Dream Hotel Group to care for their brands and carry their success forward into the future.” – Mark Hoplamazian

Hoplamazian added that Dream Hotel Group has created a strong brand portfolio that serves a different customer base from Hyatt’s existing lifestyle brands. “The 24 signed agreements speak to the strength and anticipated growth of the brand and adding these hotels will further solidify Hyatt’s leading position in the lifestyle space,” he said.

Dream Hotel Group CEO Jay Stein, who will join Hyatt as head of Dream Hotels to guide the integration of the brands into the Hyatt portfolio, added, “Hyatt is already known as the preferred lifestyle brand for high-end leisure and business travelers, and therefore a perfect home for our brands. Dream Hotel Group joining the Hyatt portfolio will strengthen that position and benefit our guests around the world.”

This acquisition continues Hyatt’s asset-light growth strategy following its transactions to acquire Two Roads Hospitality in 2018 and Apple Leisure Group in 2021 – and, most recently, Hyatt’s collaboration agreement with German Lindner Hotels AG, to further grow Hyatt’s brand footprint in Europe.

The acquisition will extend Hyatt’s brand footprint in key markets, including Nashville, Hollywood, South Beach, Durham, several locations in New York City and one in the Catskills. Signed contracts represent additional strategic destinations including Las Vegas, Saint Lucia and Doha.

Chatwal will continue his commitment as an owner of four open and two future hotels that are expected to join the Hyatt portfolio.

Additionally, Dream Hotel Group’s Chief Development Officer David Kuperberg will join Hyatt as head of development – Dream Hotels; Chief Operating Officer Michael Lindenbaum will join Hyatt as global head of operations – Dream Hotels.

“Hyatt has a proven track record of preserving what makes lifestyle hotels special and is the ideal new home for our growing Dream Hotel Group brands,” said Chatwal. “As an owner of Dream Hotel Group properties, I look forward to the next part of our journey and am confident there is a bright future ahead for our hotels, owners, guests and team members as part of the Hyatt family.”