Real EstateAcquisitionsHyatt Plans to Acquire Two Roads Hospitality

Hyatt Plans to Acquire Two Roads Hospitality

CHICAGO–Hyatt Hotels Corporation today announced an agreement to acquire Two Roads Hospitality, an international lifestyle hotel management company. Under the terms of the transaction, all of Two Roads’ hotel brands—Alila Hotels & Resorts, Destination Hotels, Joie de Vivre Hotels, Thompson Hotels, and tommie—will join Hyatt’s global portfolio. Hyatt will also assume management of Geolo’s properties including: Carmel Valley Ranch, Ventana Big Sur, The Chicago Athletic Association Hotel, Thompson Seattle, and The Beekman, A Thompson Hotel in New York.

Through the addition of Two Roads, its established lifestyle brands, and the management agreements for the majority of its 85 properties in eight countries, Hyatt will expand its brand presence into 23 new markets while enhancing its offerings in lifestyle hotel experiences and wellbeing. With Two Roads and its collection of lifestyle hotels, resorts, and vacation residences, Hyatt plans to deliver compelling experiences and benefits for guests and World of Hyatt members, expand its relationship with valued hotel owners, and drive growth for shareholders. Hyatt plans to integrate Two Roads brands into the World of Hyatt program in 2019

“Hyatt and Two Roads share a commitment to genuine care and delivering distinctive experiences to discerning travelers. We are pleased to be coming together, and are dedicated to learning from each other and taking the best of both organizations forward,” said Mark Hoplamazian, president and chief executive officer, Hyatt Hotels Corporation. “Two Roads’ passionate team members, strong brands, global footprint, and robust development pipeline will expand our lifestyle offerings and grow Hyatt’s brand presence in more places where our guests and World of Hyatt members want to travel. Importantly, combining Two Roads’ meaningful brand presence and development plans in Asia with Hyatt’s already strong position in this region will allow us to accelerate expansion in this critically important and fast-growing part of the world.”

After the close of the transaction, which is expected later this year, Hyatt will create a dedicated lifestyle division as a catalyst to bring together the operations of Two Roads’ and Hyatt’s lifestyle brands. “Hyatt is an ideal home for us as we share many values and a deep commitment to thoughtful growth and creating compelling experiences for our guests,” said Jamie Sabatier, chief executive officer, Two Roads Hospitality. “Hyatt’s unique position in the marketplace brings with it the powerful benefit of global scale while maintaining meaningful personal relationships with team members, guests, and owners.”

The acquisition consists of a base purchase price of $480 million, with the potential for Hyatt to invest up to an additional $120 million in the aggregate, contingent on the outcome of certain terms to be individually defined after closing.

Geolo Capital, the private equity investment arm of the John A. Pritzker family office, says the sale of Two Roads is the culmination of nine years of steady investments and growth focused on hospitality, real estate, and lifestyle industries. Geolo, which made its first hotel purchase in 2009 with the acquisition of Carmel Valley Ranch, rapidly grew its portfolio of owned properties and also created Two Roads Hospitality together with Lowe Hospitality Group, Inc. Two Roads has grown to over 85 managed properties across eight countries, representing $2 billion in total property revenues under management.

“The agreement to sell Two Roads Hospitality is a testament to the success of its brands and its remarkable associates and is a truly exciting and meaningful milestone for Geolo,” said John Pritzker, founding partner and director of Geolo Capital. “In the span of nine years, we’ve had the pleasure to build an extraordinary global lifestyle hospitality company. As co-owner and founder, our first responsibility was to ensure we found the best home for our employees and the dynamic portfolio of hotels we managed around the world. After a thoughtful review, we determined Hyatt would be the best steward of Two Roads and its managed properties. Hyatt is a world-class operator with unparalleled distribution, brand recognition and management structure that will enable Two Roads to further thrive in today’s global market.”

“We’re very proud of what we have accomplished since we first began making hospitality investments nine years ago,” said Thomas Gottlieb, co-founder and managing general partner of Geolo Capital. “Now, we have an exciting opportunity to explore new challenges. We plan to continue being active investors in the industry we love, and we intend to redeploy the capital from this sale into lifestyle real estate, especially hospitality and multi-family.”

Geolo projects currently under development include the Thompson Hotel in Washington D.C., slated to open in 2020, as well as a more than $300 million-dollar project in Austin, Texas, that will feature both Thompson and tommie hotels, and multi-family residential. Additionally, Geolo has identified and is pursuing new multi-family residential and hospitality project opportunities overseas and in major U.S. markets such as the Bay Area.

While Geolo will no longer be a principal shareholder of Two Roads Hospitality, it will remain the largest owner of hotels managed by Hyatt. The company was created in 2016 when Commune Hotels and Resorts, a Geolo owned company, merged with Destination Hotels, a Lowe Hospitality Group, Inc. company, establishing Two Roads as the largest global collection of lifestyle hospitality brands. Prior to the merger, Geolo had acquired Joie de Vivre in 2010, and then formed Commune Hotels, which subsequently acquired Thompson Hotels in 2013 and Alila Hotels in 2014.

To date, Geolo, in partnership with Wanxiang America Real Estate, has invested more than $700 million in U.S.-based projects. Additional global real estate investment partners include: Goldman Sachs & Co., Deutsche Bank, J.P. Morgan Asset Management, AJ Capital Partners, Agman Partners, GFI Capital Resources, GreenOak, Heitman, Relevant Group, Market Street Equities, The Berger Company, JW Capital Partners, Touchstone, Magellan Development, Union–Bank AG, Brown Legacy Group, and Sterling Bay.


Top photo: Glamping at Ventana Big Sur