Dive Brief:
- Hyatt Hotels has entered a definitive agreement to sell its recently acquired Playa Hotels & Resorts real estate portfolio to Tortuga Resorts, a joint venture between an affiliate of Denver-based KSL Capital Partners and Mexico City investment firm Rodina, for $2 billion, the hotel company announced Monday.
- The portfolio, which Hyatt acquired less than two weeks ago, encompasses 15 all-inclusive resort properties across Mexico, the Dominican Republic and Jamaica. While Hyatt will no longer own the real estate, the hotel company will manage 13 of the 15 properties under 50-year management agreements with Tortuga.
- The Tortuga deal “transforms the acquisition of Playa Hotels & Resorts into a fully asset-light transaction,” according to Hyatt CEO Mark Hoplamazian. This aligns with Hyatt’s ongoing asset-light strategy, which has driven performance results for the hotel company in recent quarters.
Dive Insight:
The real estate sale and subsequent management agreements increase Hyatt’s fee-based earnings, according to Hoplamazian. The long-term management agreements are consistent with Hyatt’s existing all-inclusive management fee structure, the hotel company detailed.
Hyatt now expects to earn $60 million to $65 million of stabilized adjusted EBITDA in 2027, “delivering value to shareholders that is accretive in the first full year” following the deal's closure, according to Hoplamazian.
Following the real estate sale, Hyatt’s net earnings from its $2.6 billion Playa acquisition totals approximately $555 million. Hyatt anticipates the transaction, which is subject to regulatory approval in Mexico and other conditions, to close by year-end.
The transaction aligns with Hyatt’s asset-light operating strategy, which has driven results for the company in recent quarters, Hoplamazian noted during previous earnings seasons.
In October, Hoplamazian said the company’s asset-light earnings model had led to the return of more than $1.2 billion to Hyatt shareholders in the first three quarters of 2024. His comment came shortly after Hyatt acquired Standard International, also in line with its asset-light strategy.
