Interval Leisure Group, a global provider of membership and leisure services to the vacation industry, and Hyatt Hotels Corporation, have signed a definitive agreement for ILG to purchase Hyatt Residential Group for approximately $190 million.
In addition, ILG will acquire Hyatt’s interest in a joint venture that owns and is developing a 131-unit vacation ownership property in Maui, and will reimburse Hyatt an additional approximately $35 million, representing Hyatt’s contributions to the joint venture through the transaction’s anticipated closing date. In connection with the agreement, Hyatt has selected ILG as Hyatt’s exclusive licensee in vacation ownership.
The Hyatt Residential Group markets and manages 16 vacation ownership properties at destinations in Arizona, California, Colorado, Florida, Hawaii, Nevada, Puerto Rico and Texas, including the Maui project that is under development. The Hyatt Residential Group also owns and operates the Hyatt Residence Club, a points-based membership exchange system that currently serves approximately 30,000 owners, providing them with reservation services and other benefits. All Hyatt Residence Club owners are already members of Interval International’s vacation exchange network, which includes nearly 2,900 resorts in over 80 nations. Under the terms of the master license agreement, Hyatt will receive annual license fees and the Hyatt Residence Club and the vacation ownership resorts will retain the Hyatt Residence Club brand. Hyatt Residence Club owners will continue to receive all privileges currently associated with their memberships, including Hyatt Gold Passport benefits.
Following the closing of the transaction, Hyatt Residential Group’s existing management team will continue operating the acquired businesses under ILG’s ownership.
“This agreement is the result of a 20-year, multi-faceted relationship with Hyatt, one of the world’s premier global hospitality companies and brands, and we are excited to augment this relationship with the purchase of Hyatt Residential Group,” said Craig M. Nash, chairman, president, and CEO of Interval Leisure Group. “We intend to invest in and grow the Hyatt Residential Group business through enhanced marketing efforts, expanding some existing projects, and executing on opportunities to broaden the group’s footprint. We look forward to continuing to provide the exceptional service and vacation experiences to which Hyatt Residence Club owners are accustomed.”
Nash added, “The ILG portfolio includes companies with long and successful track records of leadership in the vacation industry and this acquisition immediately expands our timeshare resort management and exchange business. Importantly, this transaction also adds a new platform for growth with the inclusion of a vacation ownership sales and marketing infrastructure, and further advances our strategy of increasing our recurring fee-for-service revenue.”
“This transaction allows Hyatt to accomplish two important goals: First, we are realizing significant value from this business from the sale, the recurring license fees and ILG’s focus on creating new travel opportunities under the Hyatt Residence Club brand. Second, because we will be maintaining our presence in the vacation ownership segment by working with one of the most respected companies in the space, Hyatt can focus on driving preference for its hotel brands and increasing its brand presence in key locations and strategically important markets,” said Steve Haggerty, global head of real estate and capital strategy at Hyatt. “We believe ILG’s leadership and focus on the vacation ownership industry will bring new value to the Hyatt Residence Club brand, owners, and associates.”