Hilton is heading back to school.
Hilton has announced a deal to acquire the Graduate Hotels brand from AJ Capital Partners for $210 million. AJ Capital will retain ownership of the real estate, and Hilton will enter into franchise agreements for all existing and signed pipeline properties. The deal is expected to finalize in the second quarter.
The acquisition was months in the making. Bloomberg reported on Feb. 5 that Hilton was rumored to be in talks to acquire the brand. Two days later on Hilton’s fourth-quarter and full-year 2023 earnings call, CEO and President Chris Nassetta said “never say never” when asked about acquisition rumors.
“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 news release Thursday. “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 locations.”
Graduate Hotels, which launched in 2014, has 33 active locations, 31 in U.S. college towns such as Ann Arbor, Michigan, home to the University of Michigan, and Chapel Hill, North Carolina, home to the University of North Carolina. Outside the U.S., the lifestyle brand’s other two properties are located in the United Kingdom in Cambridge and Oxford.
“Both Hilton and Graduate Hotels are committed to delivering exceptional experiences and making a positive impact on communities,” Ben Weprin, founder of Graduate Hotels and CEO of AJ Capital, said in the release. “Our shared values and close collaboration will ensure a smooth transition while keeping the Graduate Hotels’ unique brand identity intact.”
The acquisition adds to Hilton’s collection of lifestyle brands, joining Canopy, Curio Collection, Tapestry Collection, Tempo and Motto. According to the news release, the Graduate portfolio is expected to be available for booking on Hilton’s channels later this year and will be a part of Hilton Honors, the company's loyalty program.
Hilton recently formed partnerships with outdoor glamping company AutoCamp and boutique hotel chain Small Luxury Hotels of the World to add their properties to Hilton’s channels and loyalty program as well.
Editor’s note: Chris Nassetta serves on the board of directors for Hotel News Now’s parent company, CoStar Group.