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North America

Hilton to Acquire Graduate Hotels Brand

Alan Woinski and Kim Woinski

March 14th, 2024

Interior of a hotel room with two beds

Skift Take

Hilton will acquire the Graduate Hotels brand for $210 million, which includes all rights to the Graduate brand worldwide, franchise agreements for all existing and signed pipeline Graduate Hotels, and future development and growth.

The DJIA fell 138 points while Nasdaq was down 49, the S&P 500 fell 15 points, and the 10-year treasury yield jumped .11 to 4.30%. Lodging stocks were lower although HLT hit a new high and SOND was up 14%. VCSA traded down to a new low and AINC was down -16% on the day.

The travel and tourism sector announced 93 deals globally during the first two months of 2024, a year-on-year decline of 22.5% compared to the 120 deals during the same period in 2023, according to GlobalData. An analysis of GlobalData’s Deals Database revealed the number of mergers and acquisitions and venture financing deals declined while private equity deals volume showcased improvement during the period. The number of M&A deals declined by 25.8%, whereas venture financing deals volume registered a YoY decline of 22.2%. Private equity deals volume increased from four during January-February 2023 to six during January-February 2024. Most of the regions and key markets also registered a decline in deals volume during January-February 2024 compared to the same period of 2023. North AmericaEuropeMiddle East and Africa, and South and Central American regions experienced a decline in deal volume while the Asia-Pacific region showcased marginal improvement. Meanwhile, key markets such as the U.S., the U.K., and France registered a decline in deal volume during January-February 2024 compared to the previous year, whereas IndiaSouth Korea, and Australia witnessed some improvement.

Hilton Worldwide Holdings announced an agreement with Adventurous Journeys Capital Partners to acquire the Graduate Hotels brand. Hilton will pay $210 million to acquire all rights to the Graduate brand worldwide, enter into franchise agreements for all existing and signed pipeline Graduate Hotels and become responsible for the brand’s future development and growth. AJ Capital will remain the owner of the more than 35 operating and pipeline Graduate properties, each of which will be operated under long-term Hilton franchise agreements. The transaction, which is expected to close in the second quarter, will be immediately accretive to Hilton and brings the number of Hilton’s brands to 23. According to Hilton Chief Executive Chris Nassetta, the Graduate Hotels brand is a niche within the industry that he thinks can become a ‘megabrand’ with an opportunity to expand into at least 400 to 500 hotels.

Truist updated their earnings estimates and price targets on companies they cover in the lodging space. ABNB’s price target was raised to $131 from $118, CHH goes to $146 from $142, DRH to $11 from $10, HST to $24 from $21, H to $172 from $142, PK to $21 from $20, RHP to $135 from $134, and SHO to $13 from $12.

Based on Truist’s analysis of future reservations for mid and higher end US hotels and other checks, their overall 2024 RevPAR growth forecast is unchanged at 2.5% to 4.5% but 1Q is about 100-200 bps lighter, now tracking at flat to 2%. The softer forecast is due to a softer pace of near-in group bookings and an even more difficult Easter comp than originally expected. Truist said initial summer leisure demand and pricing trends continue to look relatively encouraging following the past year’s difficult comps. Group revenue paces two plus month outs from arrival are incredibly strong; it is the near-in group bookings that are soft. Overall Truist still sees 2024 RevPAR growth of +3-5% for global C-Corps, flattish for US centric midscale/economy companies, and +2-4% for hotel REITs.

Hotel Zessa, a DoubleTree by Hilton, formerly known as the DoubleTree by Hilton Santa Ana – Orange County Airport, announced its new name following an extensive renovation. The public spaces of the Santa Ana, California hotel have been meticulously designed, including an upgraded fitness center, 12,000 square feet of meeting space, and a newly branded restaurant. Additionally, all 254 guest rooms have been refreshed.

OGC Cowtown Hotel, LP is proposing to build a 149-guest room Hampton Inn and Suites in Fort Worth, Texas. The developer applied to rezone the land in order to move forward with the project and the city zoning commission is planning to hear the case.

Crescent Hotels & Resorts announced the addition of the Hotel Republic San Diego, An Autograph Collection, to its collection of West Coast properties within its Latitudes: Lifestyle by Crescent portfolio. Located in the heart of downtown San Diego, California, the property offers multiple food and beverage venues and thoughtfully designed event space including a ballroom and a rooftop with panoramic views.

A new four-story, 101-room Courtyard by Marriott, in downtown Lexington, South Carolina, has cleared a potential hurdle and is back on track. Local developer Lexington Hospitality received approval by the town’s Board of Appearance. The hotel offers a bistro and bar and a small meeting space.

IHG Hotels & Resorts announced the opening of a newly converted and rebranded Holiday Inn hotel in Estes Park, Colorado. The 147-room property is owned by DNC Parks & Resorts at Rocky Mount and managed by Delaware North. Amenities at the Holiday Inn Estes Park include a fitness center, ‘dive-in movies’ by the indoor heated pool, indoor and outdoor fire pits, an onsite restaurant, and more than 20,000 square feet of meeting and event space.

The Harbour View Inn on Mackinac Island has been purchased by Jon and Lauren Cotton. The selling price was not disclosed. Since 2020, the Cotton family has purchased a total of five historic hotels and two waterfront restaurants in northern Michigan. Hotel Investment Services of Troy will continue managing the 86-room Harbour View.

The $130 million Limelight Hotel Boulder, a 254-room inn and conference center on the University of Colorado Boulder campus, will hold a grand opening August 21, 2025. The hotel, a collaboration between CU Boulder and the city, will have 25,000 square feet of meeting space, a 15,000 square foot ballroom, a 5,000 square foot outdoor event lawn, and a 585-stall parking garage.

Massanutten Resort, located in the heart of Virginia’s Shenandoah Valley, shared updates on the major enhancement of its Indoor WaterPark, along with a planned new-build hotel slated to break ground this Spring. The first phase of a multi-year master plan that will see Massanutten further diversify its award-winning offerings, including a new 55+ active adult lifestyle community and more. The WaterPark expansion and new hotel are both expected to be completed by early 2026. The Indoor WaterPark will expand in two areas: a 6,000 square foot expansion will connect the new hotel and atrium to the current Indoor WaterPark facilities and on the other side of the current Indoor WaterPark will be a 22,000 square foot expansion. Also new will be an enhanced kiddie area with pools and slides as well as a large wave pool. An additional array of new attractions includes an adult pool, cabanas, a dining terrace with increased food and beverage options, and a bar. The WaterPark addition will be attached to a new-build 144-room hotel that will feature a 6,500 square foot atrium connected to the WaterPark. The atrium and hotel public areas will serve as vibrant activity hubs, with a bar and breakfast area, a board room, a 2,600 square foot flexible event space, and a fitness center. Massanutten Resort will also be expanding its parking facilities, adding 300 additional spots.

Best Western Hotels & Resorts announced the opening of the Best Western Rutgers University Hotel in East Brunswick, New Jersey. The 133-guestroom hotel is owned by Gayatrima LLC. The property recently underwent extensive renovations of the guestrooms. Hotel’s amenities include a fitness center, sundry shop, business center, 7,000 square feet of meeting space that can be broken into up to eight separate rooms, and a sundeck and patio area which is open during the warmer seasons.

Omni La Costa Resort & Spa in Carlsbad, California will unveil its sweeping renovations in early Summer 2024, elevating the resort’s every element. Following a sweeping refresh of the resort’s lobby, bar, ballroom, and meeting spaces in 2021, the property now enters a new phase of this three-year transformation. Omni La Costa features over 500 renovated guest rooms, including villas, suites, hospitality rooms, and presidential suites, an updated spa including three new salt rooms and refurbished steam rooms and dramatically redesigned championship golf facilities. Omni La Costa’s renovated event spaces include the newly constructed Costa De La Luna ballroom and a refresh of the Coastal Events Center. The resort continues to refresh and add even more space through 2024 with the expansion of the Coast Events Center, featuring 100,000 square feet of dynamic spaces.

Personnel News

After breaking ground last month, One Beverly Hills’ developer Cain International has secured $2 billion in construction financing to support the development of the nearly 18-acre project, connecting The Beverly Hilton and Waldorf Astoria Beverly Hills hotels with 10 acres of botanical gardens and open space. The financing includes a $500 million senior loan from JP Morgan in addition to other private financing commitments. Led by Cain, the project includes the first hotel by Aman Resorts on the West Coast, along with Aman-branded residences and an exclusive Aman members club.

R.M. Woodworth & Associates and Core Hospitality Advisors announced the merger of their two firms. Adam Cowart and John Ritger will be joining Mark WoodworthHenry B. Staley, Jr., and Jill L. Bidwell as principals in the new firm, Woodworth Core Group. With the merger, WCG will have offices in AtlantaJacksonvilleWashington, D.C.BirminghamBaton Rouge, and Boise, Idaho.

Noble Investment Group announced the appointment of Angela Johnson as Managing Principal and Head of Global Client Solutions and Strategic Partnerships. In this new role, Johnson will be responsible for helping lead Noble’s client relationships and cultivating innovative new strategies and investment products. Johnson will also serve as a member of the firm’s Investment Committee. Johnson joins Noble from Fifth Wall, where she was a Partner and Head of Capital Formation, leading global capital raising and investor relations.

Alan Woinski and Kim Woinski

March 14th, 2024

Companies: Hilton Hotels & Resorts, Airbnb, Best Western Hotels & Resorts, Choice Hotels International, Courtyard by Marriott, Crescent Hotels & Resorts, Delaware North, DoubleTree by Hilton, Graduate Hotels, Hampton by Hilton, Holiday Inn, Hyatt Hotels Corporation, IHG Hotels & Resorts, Noble Investment Group, Omni Hotels & Resorts, Park Hotels and Resorts Inc., Sonder Holdings Inc., Sotherly Hotels Inc., Vacasa

Locations: California, Colorado, Dallas, Michigan, New Jersey, San Diego, South Carolina, Virginia

Photo credit: A guest room at the Princeton, NJ, property of Graduate Hotels.  Graduate Hotels

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