Hyatt Hotel Corporation and Dream Hotel Group have announced an agreement for a Hyatt affiliate to acquire Dream Hotel Group’s lifestyle hotel brand and management platform including the Dream Hotels, The Chatwal Hotels and Unscripted Hotels brands, with properties in some of the world’s most prominent hotel markets across the Americas, Europe and Asia.
This asset-light acquisition will include a portfolio of 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 per cent.
The 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 to further grow Hyatt’s brand footprint in Europe.
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 properties come into the pipeline and open. Stabilised 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 stabilised management fees are anticipated to be up to approximately US$27 million. The total base purchase price plus the contingent purchase price represents an attractive acquisition multiple in the high-single digits on projected stabilised earnings.
Dream Hotel Group properties are known for their vibrant dining and nightlife experiences including hotspot restaurants, lavish entertainment venues and exclusive night clubs built on strategic collaborations with innovative and award-winning industry leaders.
“We have tremendous respect for what Dream Hotel Group founder Sant Singh Chatwal and CEO 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,” said Mark Hoplamazian, president and chief executive officer, Hyatt.
The transaction is anticipated to close in the coming months, subject to customary closing conditions. Following completion of the transaction, Hyatt will work to welcome the new properties into the World of Hyatt loyalty programme.
Dream Hotel Group founder Sant Singh Chatwal will continue his commitment as an owner of four open and two future hotels that are expected to join the Hyatt portfolio. Dream Hotel Group CEO Jay Stein will join Hyatt as head of Dream Hotels to guide the integration of the Dream Hotel Group brands into the Hyatt portfolio, ensuring the unique DNA of each brand is preserved while leveraging Hyatt’s capabilities to optimise property performance.
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.