Hyatt has agreed to acquire Sant Singh Chatwal’s Dream Hotel Group for up to $300 million.
The deal, which the hotel operator announced Tuesday, includes the Dream Hotels, Chatwal Hotels and Unscripted Hotels brands. The acquisition includes 12 managed or franchised lifestyle hotels and another 24 in the pipeline with signed long-term agreements.
The expansion will increase Hyatt’s portfolio by more than 1,700 rooms and by 30 percent in New York City alone.
The deal will expand Hyatt’s presence in markets including Nashville, South Beach, Durham and Hollywood. Several hotels are located in New York City and one in the Catskills, while some signed contracts encompass properties in Las Vegas, Saint Lucia and Doha.
The baseline purchase price of the Dream Hotel Group will be $125 million. As properties move through the pipeline and open in the next six years, the company will pay up to another $175 million.
Chatwal, founder and chairman of the Dream Hotel Group, will continue as the owner of six hotels — two of which haven’t opened yet — that are expected to become Hyatt hotels. Dream Hotel Group CEO Jay Stein will become the Head of Dream Hotels at Hyatt.
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The acquisition is expected to close in the coming months.
Hyatt has been pursuing an “asset-light growth strategy,” with multiple acquisitions in recent years to support that goal.
The company last year agreed to buy resort operator Apple Leisure Group from KKR & Co and KSL Capital Partners for $2.7 billion in cash. Hyatt trained its sights on increasing the percentage of revenues and earnings generated from fees, which came after the company committed to selling $1.5 billion in hotels by the end of 2021.
Miami voters this summer approved a new 100-year lease for the developers of a proposed Dream Hotel-anchored mixed-use project on the Miami River. The $185 million mixed-use project is expected to include a 165-key hotel under the Dream banner.