In 2018, Hyatt Hotels Corporation, a leading player in the global hospitality industry, executed a strategic acquisition that would significantly expand its footprint in the luxury and lifestyle hotel segment. The acquisition of Two Roads Hospitality marked a pivotal moment in Hyatt’s growth strategy, adding a diverse portfolio of independent hotels and resorts to its brand. This case study delves into the strategic rationale, integration process, and the far-reaching impact of this transformative acquisition.
Background
Hyatt Hotels Corporation
Founded in 1957, Hyatt Hotels Corporation had established itself as a prominent global hospitality company, known for its diverse portfolio of brands, ranging from luxury to lifestyle and select service. The company was recognized for its commitment to personalized service and its extensive network of properties worldwide.
Two Roads Hospitality
Two Roads Hospitality, established in 2016, was a dynamic hotel management company that operated a diverse collection of independent, boutique, and lifestyle hotels and resorts. The company was known for its unique and distinctive properties, each with its own character and sense of place.
The Acquisition
Strategic Rationale
- Diversification of Brand Portfolio: The acquisition allowed Hyatt to diversify its brand portfolio by adding a unique collection of independent and lifestyle hotels, complementing its existing offerings.
- Expansion in Luxury and Lifestyle Segment: Two Roads Hospitality’s portfolio consisted of high-quality, distinctive properties that catered to travelers seeking unique and authentic experiences. This acquisition positioned Hyatt as a key player in the luxury and lifestyle segment.
- Global Presence Enhancement: The addition of Two Roads Hospitality’s properties expanded Hyatt’s presence in key global markets, including North America, Asia, and Europe, further solidifying its position as a global hospitality leader.
Deal Structure
Hyatt Hotels Corporation acquired Two Roads Hospitality in a cash transaction valued at approximately $480 million. The deal included the management of a portfolio of over 85 properties across 8 countries.
Integration and Post-Acquisition Strategy
Brand Autonomy and Differentiation
Hyatt adopted a strategy of maintaining the autonomy and distinctiveness of each brand within the Two Roads Hospitality portfolio. This approach preserved the unique guest experiences associated with each property.
Loyalty Program Harmonization
Hyatt worked to integrate the loyalty programs of Two Roads Hospitality with its own World of Hyatt program, providing members with access to an expanded network of hotels and enhanced benefits.
Portfolio Expansion and Property Enhancements
Hyatt invested in expanding Two Roads Hospitality’s portfolio by exploring opportunities for new property development and renovations. This strategic capital expenditure aimed to further elevate the guest experience and revitalize existing properties.
Impact on the Hospitality Industry
Enriched Brand Portfolio
The acquisition of Two Roads Hospitality significantly enriched Hyatt’s brand portfolio, providing guests with a wider range of options for unique and authentic travel experiences.
Strengthened Global Presence
The addition of Two Roads Hospitality’s properties expanded Hyatt’s footprint in key global markets, enhancing its ability to cater to diverse traveler preferences across the world.
Industry Benchmark for Boutique and Lifestyle Offerings
The Hyatt-Two Roads Hospitality acquisition set a benchmark for the importance of boutique and lifestyle offerings in the hospitality industry, showcasing the potential for growth and differentiation in this segment.
Conclusion
The acquisition of Two Roads Hospitality by Hyatt Hotels Corporation in 2018 exemplifies the strategic value of targeted acquisitions in the hospitality industry. By integrating Two Roads Hospitality into its portfolio, Hyatt not only broadened its market reach but also strengthened its offerings in the luxury and lifestyle segments. This case study underscores the importance of thoughtful integration and strategic vision in the success of transformative acquisitions, ultimately benefiting both the acquiring company and its guests.
