Hyatt Bets on Growth of All-Inclusives With $2.6B Playa Hotels Acquisition

Key Takeaways

• Hyatt is continuing to bet on the all-inclusive industry as a growth area for travel, buying resort operator Playa Hotels for roughly $2.6 billion.
• The hotel chain will pay Playa stockholders $13.50 per share, with the deal expected to close later this year.
• Hyatt called the deal a “next step on a significant growth journey for Hyatt’s all-inclusive portfolio.”

Hyatt Hotels (H) is betting on the all-inclusive resort industry as a new growth area with its $2.6 billion acquisition of Playa Hotels and Resorts (PLYA).

The companies announced the deal Monday after confirming the start of acquisition discussions in December. Hyatt said it will pay Playa shareholders $13.50 per share, a premium of about 40% to where Playa shares were on Dec. 20, the last day before talks were confirmed and when shares jumped nearly 30% in one session.

Hyatt Calls Deal ‘Next Step on a Significant Growth Journey’ for All-Inclusives

The hotel chains have worked together previously, with Playa operating several Hilton-brand resorts. Hyatt CEO Mark Hoplamazian said the chain has “firmly established itself as a leader in the all-inclusive space” as the company called the deal a “next step on a significant growth journey for Hyatt’s all-inclusive portfolio.”

The deal is expected to close later this year, pending approval from regulators and Playa shareholders. Hyatt said it expects to fund the deal through new debt financing, and pay off about 80% of the new debt by selling some of Playa’s properties. Hyatt said it expects to generate about $2 billion from those sales.

Playa operates two dozen resorts with over 8,600 total rooms across Mexico, Jamaica, and the Dominican Republic. Hyatt, meanwhile, operates over 1,350 hotels and all-inclusive properties across 79 countries.

Hyatt shares edged 0.6% higher Monday morning, while Playa shares were up around 2%.