Hyatt made waves with its agreement to acquire Apple Leisure Group (ALG) for $2.7 billion. The deal will bring AMR Collection's 102-resort portfolio into the Hyatt fold, instantly making Hyatt a leader in luxury all-inclusives. Senior editor Christina Jelski caught up with ALG chairman Alex Zozaya to get more color on the blockbuster deal.
Q: How will Hyatt's takeover impact ALG's operations?
A: ALG comprises management companies, their management team and brands, and since Hyatt is paying a high valuation for those brands and management teams, it would make no sense to significantly change the formula they're paying for. The most important asset we have at ALG is our team, and as a result of that, the company is being acquired as a standalone unit within the Hyatt world. ALG remains under the leadership of our CEO, Alejandro Reynal, and he'll also become part of Hyatt's executive team. All the direct reports under Alejandro will continue to report to the business unit of ALG.
Of course, there will be [some additions] that will benefit ALG, including new technology tools and support with corporate, legal and administrative systems, and also [an affiliation with] Hyatt's loyalty program, which has more than 25 million members and will represent a new incremental distribution channel for ALG. We expect to close the deal by the end of October or the beginning of November, and after that, we'll be looking at ways to blend incremental value for Hyatt's frequent guests with incremental value for loyal members of AMResorts.
Q: ALG's footprint in Europe appears to have been one of the biggest draws for Hyatt, which has historically lacked a strong presence on the Continent. Can you talk a bit about that facet of the deal?
A: We have grown very rapidly in Europe, particularly in Spain and in Greece. And we're looking to expand in the Mediterranean, in Turkey, Italy and Croatia. Prior to the deal with Hyatt, we already had an aggressive plan to grow in Europe and have established a very strong pipeline there. For Hyatt, this is an opportunity for them to increase their presence in Europe and offer these products to their loyalty members, while on our side, we believe that having a global enterprise behind us will make it even easier to continue to grow our brands in Europe and get access to bigger partners and better financing.
Q: The luxury all-inclusive sector has proven to be relatively resilient throughout the Covid crisis. What has helped AMR Collection brands better weather the storm?
A: We haven't just weathered the storm better, but much better, actually. And that's because, No. 1, people are looking for value for their money. And that doesn't mean price, which may not necessarily be lower, but that people are willing to pay a higher price for much higher value. People also have had more time to travel, so the length of stay is increasing, but they want to stay close to home. And obviously we've benefited from that.
AMResorts and our distribution have been sitting in the sweet spot of the recovery. Most of our customers are from the U.S., which has had the fastest recovery in terms of vaccination and people starting to travel internationally again. And we have a [strong presence] in destinations where there are very few restrictions to get in, such as Mexico, the Dominican Republic and Jamaica.
But people also want to be safe, and the all-inclusive proposition allows them to spend more time in the hotel, within a controlled environment, and these hotels can implement protocols much better and more efficiently. And that's making the all-inclusive vacation more popular than ever.