Hilton might become a leading hotel player in college towns and cities across the U.S.
The hotel giant is
considering an acquisition of Graduate Hotels, a brand that's heavily
concentrated in the U.S. but also has properties in the U.K., Bloomberg
first reported Monday afternoon. Graduate began as a boutique
hotel brand focusing on U.S. college towns like Oxford, Mississippi (home of
the University of Mississippi); Athens, Georgia (home of the University of
Georgia); and Ann Arbor, Michigan (home of the University of Michigan).
The company has
since expanded to larger cities — albeit ones with a significant higher
education presence — like Nashville, New York City and
Providence, Rhode Island.
The Bloomberg
report noted a potential deal isn't finalized. A Hilton spokesperson declined
to comment on market rumors or speculation when contacted by TPG.
A potential brand
takeover would be a strategic departure for Hilton, which has largely followed
a path of organically launching and growing brands while its competitors
like Marriott,
Hyatt and IHG acquired brands to get into spaces they hadn't
previously occupied or geographic areas where they had a limited presence.
"The name of
the game in the hotel business these days is definitely consolidation of
brands," said LW Hospitality Advisors CEO Daniel Lesser.
The Graduate Hotels deal isn't even the first
rumored brand takeover for Hilton in recent months.
Investor and
analyst chatter at last week's Americas Lodging Investment Summit pointed to Hilton's
potential takeover of the trendy NoMad Hotels brand, which operates hotels in
Las Vegas and London. That would add fuel to Hilton leadership's hint that some
sort of luxury lifestyle
brand expansion was in the works at the company, but most
assumed the company would launch its own brand in this space.
"There are
pluses and minuses to everything," Lesser said. "If you [develop and
launch a brand] organically, it takes a lot of time. Time is money, as opposed
to acquiring where it's sort of instant gratification."
Not to overly
speculate, but Hilton pulling a one-two-punch acquisition of both brands would
also give the company immediate exposure to the lifestyle hotel sector across a
variety of markets and price points.
Graduate Hotels
could deliver a lifestyle hotel offering in smaller markets that still want a
cool hotel with local bars and restaurants. NoMad can be the head-to-head
competitor with Marriott's Edition in some of the world's largest — and
priciest — cities.
If Paris Hilton's bedazzled, Hilton-branded clutch for the Grammy Awards Sunday night is any clue, it's clear Hilton is all about shiny things these days that garner maximum exposure.
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