Hyatt Looks to Potentially Purchase Rival & Grow Hotel Portfolio by 50%

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Hyatt NH Hotel Group Offer

Hyatt NH Hotel Group Offer

Hyatt has announced some exciting news. President and CEO Mark Hoplamazian announced that the company may potentially make an offer for Spanish based NH Hotel Group. In a press release he said the following:

“Hyatt has a demonstrated track record of making strategic investments to extend the reach of our brands and create value for our stakeholders. In keeping with our growth strategy, we submitted a letter expressing our interest in pursuing a potential acquisition of NH Hotel Group.

We believe that marrying NH Hotel Group’s strong footprint in Europe and select other markets with Hyatt’s global presence would yield a powerful portfolio of brands and network of hotels delivering compelling benefits for guests, owners and shareholders of both companies. 

Consistent with our strategy of pivoting to an asset-lighter business model, we see significant value creation for shareholders through a separation of NH Hotel Group’s real-estate assets from its hotel management platform. As a next step, we are seeking to conduct additional due diligence to further inform valuation and determine the optimal approach to a potential offer.”

Who Is NH Hotel Group?

NH Hotel Group is based out of Madrid and has 380 properties which are mostly mid-scale with a few budget and few luxury options. Their sole U.S. hotel is in New York, but it closed at the end of last year for renovations. They have a decent foothold in Latin America which is an area with few Hyatts.

With that said, the really good news is they have a huge footprint in another major area of the world where Hyatt falls flat. Europe.

And they don’t just have a few properties either. They have 130 properties in Spain, 51 in Italy, 58 in Germany, 35 in the Netherlands along with properties in Portugal, United Kingdom, Romania, Andorra, France, Poland, Slovakia, Czech Republic, Austria and Luxembourg. As a reminder, here is Hyatt’s tiny footprint currently in Europe.

They have grown in Europe over the past few years, but a lot of the newer properties are Hyatt Place locations and are centered around a few areas. Germany really is the only country where they have somewhat of a spread out presence.

NH Hotel Brands

If this purchase were to go through, Hyatt would go from a marginal player to having a huge footprint in Europe. While I’m sure not every property will fit with the Hyatt brand, NH has some brands that seem very Hyatt like.

For example their NH Collection hotels seem a lot like Unbound. “Discover the eclectic elegance. A captivating selection of outstanding buildings and contemporary architectures where the uniqueness of each property is carefully preserved.” Sounds good to me.

They also have Nhow which is a modern brand that seems a little like Hyatt Centric. Then of course there are just their regular hotels which could fit within the Hyatt and Hyatt Regency brands. Only time will tell.

Conclusion

With so much consolidation in the hotel industry, Hyatt at just shy of 800 properties is by far the smallest of the big players. An acquisition like this could almost grow their portfolio by 50% overnight which is a little exciting as a Hyatt loyalist since it would mean a lot more places to stay in a lot more cities. Only time will tell. This is far from a done deal.

What do you think?


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2 COMMENTS

  1. Potentially interesting indeed. Just hope such an acquisition doesn’t give Hyatt an excuse to follow what happened after IHG swallowed high end Kimpton — essentially ruined IHG’s storied rewards program. (endless program devaluations, massive price increases across the board (both points or cash), and pathetic gutting of past valued promotions — like point breaks….. all the while gutting back-office customer support.)

    Hyatt has been messing around in dangerous territory — like your reported flirting with killing the free breakfasts at Hyatt Place. (still irks me that you “liked” that) If they keep that type of thinking going, future could look as grim for Hyatt as for IHG

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