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Ex-Hilton Sa Torre Mallorca is back for points as Hyatt makes a major hotel acquisition

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Hyatt made a huge acquisition this week, paying $2.7 billion for Apple Leisure Group.

You’ve probably never heard of Apple Leisure Group – I hadn’t. It is a big player in the 4-star ‘tour operator’ market, running fairly smart all-inclusive hotels which are almost exclusively sold via package holiday groups.

As well as operating over 100 hotels, Apple Leisure Group owns a number of tour operators of its own, primarily operating in the US.

Why did Hyatt buy Apple Leisure Group?

It’s an odd one, it has to be said.

This is a huge deal for Hyatt, which is paying around 1/3rd of its current $7 billion valuation. This is a lot to spend on a business which is:

  • very fragmented (multiple brands, multiple tour operator subsidiaries, a timeshare ‘vacation club’, a ‘destination services’ business and a travel IT business)
  • adds multiple hotel brands you have never heard of (Alua, Breathless, Dreams, Secrets, Sunscape and Zoetry) to an already busy portfolio
  • has virtually no assets as its resorts are all managed on behalf of third party owners (this is seen as a good thing in the hotel sector these days, but it means Hyatt is spending $2.7 billion with almost nothing physical to show for it)
  • has probably been squeezed to death by its existing private equity owners
  • takes Hyatt away from its core business travel market

The last point, of course, could be seen as a positive if business travel takes a long time to recover. Apple has ‘real’ mass-market leisure hotels which have virtually no corporate business at all.

Hyatt will now be the biggest global operator of luxury ‘all inclusive’ resorts and this may turn out to be a good place to be for the next decade.

The Hyatt share price is only marginally down on the week. Investors may not be excited but they are not running for the exit either.

It’s decent news if you live in Europe

One upside for HfP readers in the UK is that a decent proportion of the Apple Leisure Group portfolio is in Spain and Greece, mainly branded Alua. The rest is in Mexico, the Caribbean and Central America.

Hyatt’s European footprint will grow by 60% when the deal completes.

We may see some good value World of Hyatt redemption options opening up, especially in peak season. Hyatt has ‘last room availability’ and as long as standard rooms are being sold for cash, they can be booked for rewards.

Hilton Sa Torre Mallorca

Hilton Sa Torre will be back for redemptions

Here is one reason to welcome this deal.

In 2018, Hilton Sa Torre in Mallorca – almost certainly the only Hilton in the world in a 14th century building with its own windmill – left the chain.

This is a shame as it was a surprisingly upmarket hotel which I reviewed here.

With a terrible sense of timing, the hotel signed a franchise deal with Thomas Cook to join the ‘adults only’ Casa Cook brand. Thomas Cook promptly went bust and Sa Torre ended up as part of the Zoetry chain.

I had never heard of Zoetry at the time. It turns out that it is the most luxurious of the Apple Leisure Group brands, although it covers only seven of their 100+ hotels.

Sa Torre’s new website is here and it should be bookable via World of Hyatt points within 12-18 months depending on the speed of the integration.

Nothing else in the Apple Leisure Group portfolio jumps out at me but let’s see how it develops. I would expect to see some brands replaced with Hyatt ones in an attempt to streamline the portfolio and this may impact the ‘adults only’ and ‘all inclusive’ restrictions at those hotels.

The official Hyatt news release on the acquisition is here.


World of Hyatt update – October 2021:

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Comments (38)

  • Ray S says:

    Dreams/Secrets certainly on par if not better than Sandals/Beaches in terms of luxury Caribbean resorts. This is a great move!

  • Leo says:

    Really disappointing hotel. Never understood the positive HFP review. Staff dreadful and location very poor.

    • Ade says:

      When did you stay?

    • Tony says:

      I’ve stayed there 3 or 4 times with the family. Last trip was 4 years ago to the week but really enjoyed our time there. Quiet pools, always well looked after as a family and just very relaxed. The property was admittedly showing some signs of cosmetic wear on the last visit but presumably due a refurb.

    • Will says:

      I stayed there when it was Hilton, very much enjoyed it albeit well off the beaten track if that’s important

  • RussellH says:

    > multiple brands, multiple tour operator subsidiaries, a timeshare ‘vacation club’,
    > a ‘destination services’ business and a travel IT business

    I can well imagine Hyatt keeping the hotel brands, while re-branding a number of them into their existing brands, and also the Vacation Club – Hilton + Marriott both have something along those lines, I thought.

    But the TOs, the DMC and the IT business could well be sold on. They might even have buyers lined up, or at least been in talks about them?

  • SammyJ says:

    Currently at a Royalton in Jamaica (nice enough but not a patch on Dreams/Sandals etc), and apparently they’ve just become part of Marriot/Bonvoy.

  • 1ATL says:

    ALG are also the parent company who operate The Vacation Collection programme for American Express Platinum and Centurion. Business as usual for that acquisition as far as I can make out, although it’s early days.

  • Russ says:

    What does this mean for the long awaited credit card? Is it bad or good news? I can’t see it being good news because they’ve gotten all your money up front without having to reward you with anything but what do I know….

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