Just days after completing the acquisition of 15 all-inclusive resorts from Playa Hotels & Resorts, Hyatt Hotels Corp. is offloading the portfolio.
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Tortuga Resorts, a joint venture of KSL Capital Partners and Rodina, will pay $2B for the properties, located in Mexico, the Dominican Republic and Jamaica, Hyatt announced Monday.
The deal is part of an asset-light strategy for the Chicago-based Hyatt, expanding its brands, partnerships, loyalty capabilities and customer reach without being tied down to physical assets. On June 17, Hyatt paid $2.6B for all of Playa’s outstanding shares.
“The planned real estate sale to Tortuga transforms the acquisition of Playa Hotels & Resorts into a fully asset-light transaction and increases Hyatt’s fee-based earnings,” Hyatt President and CEO Mark Hoplamazian said in a statement. “Hyatt has secured long-term, durable management agreements and the planned real estate sale demonstrates Hyatt’s commitment to its asset-light business model and ability to deliver value to shareholders that is accretive in the first full year.”
As part of the deal, Hyatt will continue to manage 13 of the 15 properties under a 50-year agreement. The agreement shakes out to Hyatt paying more than $500M for the management contract of the Playa resorts.
Hyatt will continue to have a stake in the portfolio — under the deal, the company will retain $200M of preferred equity and could get a $143M earnout if certain operating thresholds are met.
Hyatt has been growing its all-inclusive portfolio, including through a joint venture with Grupo Piñero for Bahia Principe Hotels & Resorts in 2024, which spans 55,000 rooms, and the $2.7B acquisition of Apple Leisure Group in 2021.
It first launched its all-inclusive offerings in 2013 with the Hyatt Ziva and Hyatt Zilara brands.
Hyatt is required to use the proceeds of the property sale to repay the delayed draw term loan used to fund a portion of its Playa acquisition, according to the company. The transaction is expected to close before the end of the year and is subject to regulatory approval in Mexico and other customary closing conditions.
BDT & MSD Partners is acting as lead financial adviser to Hyatt, with Berkadia as real estate adviser and Latham & Watkins as legal adviser. Goldman Sachs and Simpson Thacher & Bartlett are advising Tortuga.
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