Hyatt Acquires Playa Hotels & Resorts, Grows All-Inclusive Portfolio

Hyatt has been on quite the shopping spree lately. In recent years, we’ve seen Hyatt acquire Two Roads Hospitality, Apple Leisure Group, Mr & Mrs Smith, Dream Hotel Group, Standard Hotels, me and all hotels, and more.

In late December 2024, Hyatt disclosed that it was in discussions to acquire yet another hotel group. There’s now an update, as a deal has been reached, and this one is a little bit different than past ones, as it’s not in line with Hyatt’s traditional asset-light approach (at least initially).

Hyatt buying Playa Hotels & Resorts For $2.6 billion

Hyatt has entered into an agreement to acquire all outstanding shares of Playa Hotels & Resorts, for $13.50 per share. This values the deal at around $2.6 billion, including around $900 million of debt, net of cash.

For those not familiar, Playa Hotels & Resorts owns around 25 resorts in the Dominican Republic, Jamaica, and Mexico. The company actually owns those properties, rather than Playa being a marketing or branding company (in other words, it’s the opposite of Hyatt’s business model, as Hyatt takes an asset-light approach).

Currently Playa properties belong to a variety of hotel groups, ranging from Hilton, to Hyatt, to Kimpton, to Wyndham. As you can see, roughly one-third of the Playa portfolio already has Hyatt branding, including Hyatt Zilara Cap Cana, Hyatt Zilara Rose Hall, Hyatt Ziva Cancun, and more.

Hyatt’s strategy is to secure long-term management agreements for these properties. It will also expand Hyatt’s distribution channels, including ALG Vacations and Unlimited Vacation Club, to Playa’s portfolio, offering additional benefits to guests of Playa properties.

Hyatt believes that it is well positioned to drive value creation through complementary business segments and further optimize its existing all-inclusive infrastructure in Mexico and the Caribbean.

Hyatt will maintain its asset-light strategy, so the plan is to identify third-party buyers for Playa’s owned properties. Hyatt anticipates realizing around $2 billion of proceeds from asset sales by the end of 2027, and expects asset-light earnings to exceed 90% on a pro forma basis in 2027.

Here’s how Hyatt CEO Mark Hoplamazian describes this deal:

“Hyatt has firmly established itself as a leader in the all-inclusive space, a journey that began in 2013 through an investment in Playa Hotels & Resorts that launched the Hyatt Ziva and Hyatt Zilara brands. We have respected and benefitted from Playa’s operating expertise and outstanding guest experience delivery for years through their ownership and management of eight of our Hyatt Ziva and Hyatt Zilara hotels. This pending transaction allows us to broaden our portfolio while providing more value to all of our stakeholders through an expanded management platform for all-inclusive resorts.”

I have to imagine that part of Hyatt’s motivation here is to prevent a competitor from trying to acquire Playa, since Hyatt is taking a major lead in the all-inclusive space. Still, you’d think that this acquisition on Hyatt’s part would almost lead to oversaturation in some markets for a single hotel brand, no? Like, how many dozens of all-inclusive Hyatt branded properties can there be in one country, without there being cannibalization?

Why is Hyatt so focused on all-inclusive resorts?

Hyatt has been growing like crazy lately, though a disproportionate amount of that growth has been in the all-inclusive sector. Admittedly all-inclusive resorts are a bit polarizing — some swear by them, while others would almost never consider such a vacation.

One logical question is why Hyatt has been so focused on all-inclusives. It seems like a vast majority of Hyatt’s growth is either in the limited service sector or in the all-inclusive sector, rather than than in the full-service hotel sector.

So, why is Hyatt taking this strategy? I suspect it comes down to several factors:

• Hyatt already has a lead in the all-inclusive space, so the company is trying to maintain that momentum, and keep it a competitive advantage
• Part of the issue is that interest rates are quite high, so the current appetite for building expensive new hotels isn’t that high; rebranding and managing all-inclusives is a big opportunity
• Many people vacation at the same all-inclusive property every year (or at least in the same region), so it’s a way for Hyatt to appeal to a wider customer base, and get continued revenue
• For some business travelers, all-inclusives are a great incentive to participate in World of Hyatt, since it’s an easy vacation that they like to take their families on
• With the continued strength of leisure travel, Hyatt obviously sees all-inclusives as being a key part of being appealing in that market

Personally, these Caribbean all-inclusive properties don’t appeal to me much. So for my own travels, I don’t love how heavily invested Hyatt is in this concept, and I wish we’d see growth in other sectors. However, I also see why this is a lucrative segment for Hyatt to tap into.

Bottom line

Hyatt will be acquiring Playa Hotels & Resorts, whereby we’ll see Hyatt buy the company all its 25 all-inclusive Caribbean properties. Since Hyatt has an asset-light strategy, the strategy here is to establish long term management contracts for all the properties, and then sell them off to third-party buyers.

I can’t say that I love Hyatt’s laser focus on all-inclusives, but that seems to be the direction the company is headed, and I can understand why. I’m just confused by the level of saturation we’re going to see in some markets.

What do you make of Hyatt acquiring Playa, and of Hyatt’s general focus on all-inclusives?