Just weeks after its significant acquisition of Playa Hotels & Resorts valued at USD $2.6 billion (CAD $3.73 billion), Hyatt is swiftly moving to sell all 15 Playa-owned resorts. The divestiture is set to be made to Tortuga Resorts, a joint venture between KSL Capital Partners and Rodina, for USD $2 billion.
Overview of the Sale
The all-inclusive resorts included in this transaction are located across Mexico, the Dominican Republic, and Jamaica. These properties significantly enhance Hyatt’s portfolio, which previously benefited from the acquisition of Playa’s establishments, including resorts operating under its Ziva and Zilara brands.
Hyatt will maintain management contracts for 13 of the resorts over the next 50 years, while the other two will operate under different terms. The deal further involves a USD $200 million preferred equity stake and may generate up to USD $143 million in performance-based earnouts, contingent on meeting essential operational targets.
Strategic Transformation
This transaction is expected to conclude by the end of 2025, pending necessary regulatory approvals. Hyatt’s CEO, Mark Hoplamazian, hailed the sale as a shift toward a "fully asset-light transaction." With this strategy shift, Hyatt emphasizes long-term management agreements, aligning with its broader commitment to an asset-light business model.
“Hyatt has secured long-term, durable management agreements,” stated Hoplamazian in a recent press release. “This sale underscores our commitment to an asset-light model and delivers shareholder value from day one.”
Financial Implications
Hyatt anticipates generating USD $60 to $65 million in stabilized adjusted EBITDA by 2027, at an implied multiple ranging from 8.5x to 9.5x. Post-sale, Hyatt’s net investment in Playa’s portfolio will reduce to approximately USD $555 million, reinforcing its dedication to operational growth without capital ownership.
In June, following the closure of the Playa acquisition, Hyatt delineated its plans to divest real estate holdings and underscore their focus on long-term management contracts. This intention aligns with Hyatt’s strategy to expand through branding and operational growth.
Key Resort Highlights
The integration of Playa’s 15 resorts brought prominent properties into Hyatt’s portfolio, including Secrets La Romana and Dreams La Romana in the Dominican Republic, as well as Dreams Rose Hall in Jamaica and Hyatt Vivid Playa del Carmen and Sunscape Cancun in Mexico.
This strategic move builds upon Hyatt’s previous joint venture with Grupo Piñero in 2024, further solidifying its commitment to dominate the all-inclusive market across regions like Latin America, the Caribbean, and Europe.
For more detailed insights on Hyatt’s extensive growth strategy and collaborations, you can explore Hyatt’s Future with Grupo Piñero and stay updated about Hyatt’s latest ventures and investment partnerships.
This latest development marks a significant milestone in Hyatt’s ongoing enhancement of its business model, ensuring stakeholders are well-equipped for future growth opportunities in the hospitality sector.
