Interval buys Hyatt's vacation ownership arm
Interval Leisure Group has signed a $190 million deal with Hyatt Hotels Corporation to buy Hyatt Residential Group.
In addition, ILG will pay an extra $35 million Hyatt’s interest in a joint venture that owns and is developing a 131-unit vacation ownership property in Maui (pictured).
In connection with the agreement, Hyatt has selected ILG as Hyatt’s exclusive licensee in vacation ownership. Following the closing of the transaction, Hyatt Residential Group’s existing management team will continue operating the acquired businesses under ILG’s ownership.
The Hyatt Residential Group markets and manages 16 vacation ownership properties at destinations in Arizona, California, Colorado, Florida, Hawaii, Nevada, Puerto Rico and Texas, including the Maui project.
The Hyatt Residential Group also owns and operates the Hyatt Residence Club, a points-based membership exchange system that currently serves approximately 30,000 owners, providing them with reservation services and other benefits.
All Hyatt Residence Club owners are already members of Interval International’s vacation exchange network. Under the terms of the master license agreement, Hyatt will receive annual license fees and the Hyatt Residence Club and the vacation ownership resorts will retain the Hyatt Residence Club brand. Hyatt Residence Club owners will continue to receive all privileges currently associated with their memberships, including Hyatt Gold Passport benefits.
Interval CEO Craig Nash said: “This agreement is the result of a 20-year, multi-faceted relationship with Hyatt, one of the world’s premier global hospitality companies and brands, and we are excited to augment this relationship with the purchase of Hyatt Residential Group. We intend to invest in and grow the Hyatt Residential Group business through enhanced marketing efforts, expanding some existing projects, and executing on opportunities to broaden the group’s footprint. We look forward to continuing to provide the exceptional service and vacation experiences to which Hyatt Residence Club owners are accustomed. This transaction also adds a new platform for growth with the inclusion of a vacation ownership sales and marketing infrastructure, and further advances our strategy of increasing our recurring fee-for-service revenue.”
Steve Haggerty, global head, real estate and capital strategy at Hyatt, said: “This transaction allows Hyatt to accomplish two important goals. First, we are realising significant value from this business from the sale, the recurring license fees and ILG’s focus on creating new travel opportunities under the Hyatt Residence Club brand. Second, because we will be maintaining our presence in the vacation ownership segment by working with one of the most respected companies in the space, Hyatt can focus on driving preference for its hotel brands and increasing its brand presence in key locations and strategically important markets. We believe ILG’s leadership and focus on the vacation ownership industry will bring new value to the Hyatt Residence Club brand, owners, and associates.”