Hilton’s Graduate acquisition could result in over 500 new hotels, CEO Nassetta says
The acquisition, which includes all rights to the Graduate brand worldwide, was the talk of this week’s (20 Mar) Hunter Hotel Investment Conference in Atlanta – an event which attracts a large number of America’s largest owners and investors – given it is the first time Hilton has bought a brand since Nassetta has been President and CEO of Hilton.
Nassetta’s strategy to date has been focused on Hilton developing its own new brands and that has proven incredibly successful though the launches of LXR, Canopy, Curio, Signia, Tapestry, Tempo, Motto, Tru, Spark and Home2 Suites.
The opportunity to acquire Graduate Hotels, which has 35 hotels open and in the development pipeline, was one too good to miss in this case and Nassetta said the acquisition will help accelerate the company’s growth in the booming lifestyle segment globally.
Graduate Hotels was launched in 2014 and is a collection of bespoke properties that are primarily located in university-anchored towns in the United States and United Kingdom, including flagship hotels in Ann Arbor, Michigan; Knoxville, Tennessee; Palo Alto, California; State College, Pennsylvania; and Oxford and Cambridge, United Kingdom.
Each Graduate hotel – steeped in local history, charm and nostalgia – has been designed to reflect the unique character of its local university and offers an ideal setting for gamedays, reunions, graduations, campus visits and more.
“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.
“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.”
Nassetta said the pipeline opportunity for the Graduate Hotels brand was massive.
“With thousands of colleges and universities around the world, we believe the addressable market for the Graduate brand is 400-500 hotels globally,” he said.
The Graduate brand will be incorporated into Hilton’s fast-growing lifestyle portfolio alongside Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton and Motto by Hilton, each of which has been launched in the last 10 years.
Hilton’s recently-launched 2024 Trends Report identified that nearly a quarter of global travellers are planning getaways for concerts, sporting events and other one-of-a-kind, local experiences this year, many of which are happening in secondary markets anchored by universities.
The last major brand acquisition by Hilton was in 1999, when the company acquired Promus Hotel Corporation, which included the DoubleTree, Red Lion, Embassy Suites, Hampton Inn, and Homewood Suites brands.