Hilton is poised to become a dominant hotel brand in college towns and cities across the U.S. The hotel giant intends to purchase Graduate Hotels, a brand primarily based in the U.S. with some properties in the U.K., from AJ Capital for $210 million.
Hilton will hold the rights to the Graduate Hotels brand and will oversee future expansion and growth via franchising. However, AJ Capital will maintain real estate ownership of the existing Graduate portfolio of hotels, both open and in development, under new long-term Hilton franchise agreements.
Graduate Hotels started as a boutique hotel brand in U.S. college towns such as Oxford, Mississippi; Athens, Georgia; and Ann Arbor, Michigan. The company has since grown to include larger cities with a significant higher education presence, such as Nashville, New York City, and Providence.
Hilton CEO Chris Nassetta stated that adding Graduate Hotels to their portfolio would accelerate their expansion in the lifestyle space by combining an already popular brand with Hilton’s robust commercial engine to drive growth. Graduate Hotels currently has over 35 hotels that are either open or in development, but Nassetta noted that this number could eventually reach up to 500 hotels. The acquisition is expected to close by the end of June.
Graduate will join Canopy, Tempo, Motto, and the Curio and Tapestry Collections in Hilton’s lifestyle brand portfolio. Ben Weprin, the founder of Graduate Hotels and CEO of AJ Capital, said that both Hilton and Graduate Hotels are committed to delivering exceptional experiences and making a positive impact on communities. He added that with Hilton’s extensive network behind them, guests can expect even more exciting opportunities.
This acquisition marks a strategic shift for Hilton, which has traditionally focused on organically launching and growing brands while competitors like Marriott, Hyatt, and IHG have acquired brands to expand into new spaces or geographic areas where they had a limited presence. The acquisition of Graduate Hotels could give Hilton immediate exposure to the lifestyle hotel sector across a variety of markets and price points.
Source: thepointsguy.com