Hyatt Playa Hotels & Resorts

The continued expansion of Hyatt's all inclusive resorts has been a focus point for World of Hyatt for some time now. We have seen their lineup grow exponentially over the last several years, and it looks like that trend is to continue. The latest news is that Hyatt's bid to acquire Playa Hotels & Resorts has been accepted. This has been rumored for several months now, which makes sense since Playa Hotels & Resorts operates some Hyatt branded all inclusive hotels already. Let's take a look at the details of the offer.

Purchase Agreement

Here are some details of the accepted Hyatt bid for Playa Hotels & Resorts from the press release:

…Hyatt has entered into an agreement to acquire all outstanding shares of Playa Hotels & Resorts N.V. (NASDAQ: PLYA, Playa) for $13.50 per share, or approximately $2.6 billion, including approximately $900 million of debt, net of cash. Playa is a leading owner and operator of all-inclusive resorts in Mexico, the Dominican Republic and Jamaica and Hyatt is currently the beneficial owner of 9.4% of Playa’s outstanding shares.

“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,” said Mark Hoplamazian, President and Chief Executive Officer, Hyatt...

…Hyatt remains committed to its asset-light business model and intends to identify third-party buyers for Playa’s owned properties. Following the close of the transaction, Hyatt anticipates realizing at least $2.0 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.

At closing, Hyatt expects to fund 100% of the acquisition with new debt financing and, consistent with maintaining its investment grade profile, expects to pay down over 80% of the new debt financing with proceeds from asset sales.

Information On Playa Hotels & Resorts

On the Playa Hotels & Resorts investors page they claim:

Playa currently owns and/or manages a total portfolio consisting of 24 resorts (8,627 rooms).

The problem is that they only have 23 hotels listed on their website. I am not sure if one recently closed, or if they are near completion of a new resort etc. Either way, here are all of the resorts they list as bookable on their website. You will see some familiar names on the list.

Update: my buddy Kevin informed me that Jewel Paradise Cove in Ocho Rios sold in January to another company. That is why there is a discrepancy in the numbers.

Dominican Republic

• Hilton La Romana
• Hilton La Romana Adult Resort
• Hyatt Zilara Cap Cana Adult Resort
• Hyatt Ziva Cap Cana
• Sanctuary Cap Cana, a Luxury Collection Resort
• Wyndham Alltra Punta Cana
• Wyndham Alltra Samana

Jamaica

• Hilton Rose Hall
• Hyatt Zilara Rose Hall Adult Resort
• Hyatt Ziva Rose Hall
• Jewel Grande

Mexico

• Hilton Playa Del Carmen Adult Resort
• Hyatt Zilara Cancun Adult Resort
• Hyatt Ziva Cancun
• Hyatt Ziva Los Cabos
• Hyatt Ziva Puerto Vallarta
• Kimpton Tres Rios
• Paraiso de la Bonita Luxury Collection Resort
• Seadust Cancun Family Resort
• Turquoize Cancun
• Wyndham Alltra Cancun
• Wyndham Alltra Playa Del Carmen, Adults Only
• Wyndham Alltra Vallarta

Hyatt Playa Hotels & Resorts: ToP Thoughts

Initially I was pretty excited to see that Hyatt has an agreement in place for Playa Hotels & Resorts, but that changed a bit after I saw the list of properties. Why? Because there are a lot of other points hotels involved. People that prefer Wyndham or Hilton over Hyatt are losing some good options for their points. Throw in the fact that World of Hyatt has completely overpriced their all inclusive hotels across the board and we are looking at a likely increase of relative cost.

Look at Hilton La Romana, you can get their rooms for 90,000 Hilton points a night right now. If you throw in the 5th night free option, which Hyatt doesn't offer, that drops it down to 72,000 points on average. If we value Hilton points at around 1/3 of Hyatt points that is 24,000 Hyatt points a night. I doubt the new price will be that low. If you value Hilton points as 1/4 Hyatt points it drops it to 18,000 Hyatt points comparable cost on a 5th night free stay. Standard stays would be in the 22,500 – 30,000 point range, depending on how you value the points. That doesn't even dip into how Hilton free night certs work here too.

Let me know what you think of Hyatt buying Playa Hotels & Resorts over in the ToP Facebook Group.