Hyatt Hotels Corp. officials officially closed the acquisition of Standard International, which will add several lifestyle brands to Hyatt's portfolio.
The deal, first announced in August, comes with an initial price tag of $150 million but also includes up to $185 million in post-acquisition growth incentives and as much as $47 million in fees.
Hyatt is creating a new lifestyle group in the wake of the deal that will be led by Standard Executive Chairman Amar Lalvani, who will take over the role of president and creative director.
“The lifestyle segment isn’t for the faint of heart, it takes creativity and commitment,” Lalvani said in a news release announcing the deal's completion. “But if you get it right, you reap the benefits of outsized guest loyalty and outsized developer returns. The beauty of this combination is that Hyatt respects the creativity and freedom required to deliver the experiences we do, and we respect the value of Hyatt’s storied history, global infrastructure and best-in-class commercial services.”
Hyatt officials previously said Standard International CEO Amber Asher will leave the company "after staying on for a transition period to support the team and ensure a smooth transition."
Standard's portfolio of management and franchise agreements and licenses includes 22 open properties with roughly 2,000 rooms, largely under their flagship brand, The Standard, with three more properties slated to open this year. Smaller hotel brands included in the deal include Bunkhouse, Peri Hotels and The StandardX. The company also operates several restaurants, branded residences and nightlife concepts.
The company was previously owned by Sansiri PLC, which will continued to own several standard operated properties.
Standard currently has a pipeline of 30 properties with signed agreements or letters of intent, and Hyatt executives say they've already received a wave of interest from developers and investors since the August announcement.
“The development community knows an industry game-changer when they see it, and the enthusiasm for bringing together the ethos of The Standard and Bunkhouse brands and the power of Hyatt’s network and distribution system is palpable,” Hyatt President and CEO Mark Hoplamazian said in a statement. “Developers love this combination as much as we do.”
Hyatt executives have said the growth of the lifestyle group — which has quintupled in size since 2017 — will underscore their broad-based growth across their brand portfolio and loyalty platform World of Hyatt.
Hyatt, which has traditionally focused on high-end travelers, now has 50% of its pipeline in the select-service segment. The company also claims the "largest collection of luxury all-inclusive resorts globally."
This deal marks the latest in a string of acquisitions and sales focused on moving Hyatt away from hotel ownership while expanding its fee-based hotel management and franchise business.
Since the start of August, Hyatt has sold both the Hyatt Regency Orlando for $1.07 billion and the Hyatt Regency Clearwater for $137 million, capping a yearslong effort to sell more than $3.6 billion in hotels since adopting its asset-light growth model in 2019.
And in recent years, Hyatt has purchased brand and operating firms including Dream Hotel Group, Two Roads Hospitality and Apple Leisure Group.
“Our transformation to an asset-light business model has been a resounding success, and now it’s time to evolve our organization to propel us into the future, benefiting our guests, members, customers, owners and shareholders along the way,” said Hoplamazian. “This is not about prioritizing one segment over another; this is about aligning our internal resources and expertise to care even more deeply for guests, customers and owners across our entire portfolio.”