Hilton to acquire Graduate Hotels for $210M

Defying President & CEO Christopher Nassetta’s February comment that Hilton prefers to build brands rather than buy them, Hilton has finalized an agreement with Adventurous Journeys Capital Partners to acquire the Graduate Hotels brand, adding a significant growth opportunity for the company in the fast-growing lifestyle hotel market.  

Hilton will pay $210 million to acquire all rights to the Graduate brand worldwide, enter into franchise agreements for all existing and signed pipeline Graduate Hotels, and become responsible for the brand’s future development and growth. AJ Capital will remain the owner of the more than 35 operating and pipeline Graduate properties, each of which will be operated under long-term Hilton franchise agreements.

The transaction, which is expected to close in the second quarter, subject to customary closing conditions including review and approval pursuant to Hart-Scott-Rodino, will be immediately accretive to Hilton. The company expects the fee contribution for the first full year of ownership to be approximately $16 million.

“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,” Nassetta said in a statement. “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 400-500 hotels globally.”

Since its inception in 2014, the Graduate brand has grown to span the United States and the United Kingdom, including locations in Ann Arbor, Mich.; Knoxville, Tenn.; Palo Alto, Calif.; State College, Penn.; and Oxford and Cambridge, U.K., with new hotels opening soon in Austin and Dallas, Texas; Auburn, Ala.; and Princeton, N.J.

“We're proud to embark on this new chapter for Graduate Hotels with Hilton, the ideal partner to steer the brand's continued growth," said Ben Weprin, founder, Graduate Hotels and CEO, AJ Capital. "Both Hilton and Graduate Hotels are committed to delivering exceptional experiences and making a positive impact on communities. Our shared values and close collaboration will ensure a smooth transition while keeping the Graduate Hotels' unique brand identity intact. With Hilton's extensive network behind us, guests can anticipate even more exciting opportunities. We're certain this partnership will propel Graduate Hotels to even greater heights, while AJ’s ongoing ownership of the real estate assets lays a strong foundation for our future success." 

The Graduate brand will be incorporated into Hilton’s lifestyle portfolio alongside Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton and Motto by Hilton brands—each of which has been launched in the past 10 years. Hilton’s 2024 Trends Report identified that nearly a quarter of global travelers are planning getaways for concerts, sporting events and other local experiences this year, many of which are happening in secondary markets anchored by universities. 

Graduate Hotels are expected to be available for booking via Hilton channels later this year and will participate in the Hilton Honors guest loyalty program.