Hilton to Acquire Graduate Hotels
The hospitality giant will pay $210 million for all rights and franchise agreements for the fast-growing lifestyle brand whose properties are in college towns.
Hilton will acquire Graduate Hotels, according to an agreement announced today between the hospitality giant and real-estate investment firm Adventurous Journeys Capital Partners. Hilton will pay $210 million for all rights to the brand worldwide and take on the franchise agreements for all 33 existing properties and additional hotels in the pipeline. AJ Capital will remain the owner of those hotels, which will be operated according to long-term Hilton agreements.
Graduate Hotels is a fast-growing lifestyle brand with properties that cater to demand near major universities, particularly in college towns. Themed decor reflects not only the general college experience but always ties in specifically to the local university, appealing to alumni and fans who visit for major school events and big games. Keycards for the Graduate Ann Arbor look like student IDs from famous University of Michigan alumni; guest rooms at the Graduate Columbus feature chairs with Ohio State alumnus John Glenn's face emblazoned across the back rest.
"Adding Graduate Hotels to our portfolio of award-winning brands accelerates our expansion in the lifestyle space by pairing an existing much-loved brand with the power of Hilton’s strong commercial engine to drive growth," said Hilton president and CEO Chris Nassetta. "We have long had a high bar for adding brands to our portfolio, whether organically or through acquisition, and Graduate will be another driver of growth for us, presenting a unique opportunity to serve more guests in more sought-after destinations. With thousands of colleges and universities around the world, we believe the addressable market for the Graduate brand is 400 to 500 hotels globally."
That's a grand expansion plan for a brand that was created to serve a very specific niche — though admittedly one that represents a very attractive demographic, willing to spend heavily to visit their respective alma maters during periods of high demand.
Strong growth trajectory in college towns
Since its debut in 2014, the Graduate brand has grown its portfolio to locations across the United States and in the United Kingdom. In addition to the aforementioned Ann Arbor and Columbus properties, Graduate Hotels are present in Annapolis, Md.; Athens, Ga.; Berkeley, Ca.; Bloomington, In.; Chapel Hill, N.C.; Charlottesville, Va.; Cincinnati, Ohio; Columbia, S.C.; East Lansing, Mich.; Eugene, Ore.; Evanston, Ill.; Fayetteville, Ark.; Iowa City, Iowa; Knoxville, Tenn.; Lincoln, Neb.; Madison, Wis.; Minneapolis; Nashville, Tenn.; New Haven, Conn.; New York City; Oxford, Miss.; Palo Alto, Calif.; Providence, R.I.; Richmond, Va.; Seattle; and State College, Pa., as well as Oxford and Cambridge in the U.K.
The pipeline includes properties in Auburn, Ala.; Austin, Texas; Dallas; and Princeton, N.J.
Maintaining brand identity
Hilton is the ideal partner to steer the brand's continued growth, according to Ben Weprin, founder of Graduate Hotels and CEO of AJ Capital. "Both Hilton and Graduate Hotels are committed to delivering exceptional experiences and making a positive impact on communities," he said. "Our shared values and close collaboration will ensure a smooth transition while keeping the Graduate Hotels' unique brand identity intact."
Graduate will join Hilton's lifestyle portfolio, which includes a handful of brands launched within the past decade: Canopy by Hilton, Curio Collection, Tapestry Collection, Tempo and Motto. The transaction is expected to close in the second quarter.
Source: Northstarmeetingsgroup.com
