Pairing Loyal Graduate Fanbase with Size and
Scale of Hilton Will Create New Opportunities for Owners and Guests
in Some of the World’s Greatest College Towns
Hilton (NYSE: HLT) today announced an agreement with Adventurous
Journeys Capital Partners (“AJ Capital”) to acquire the
fan-favorite Graduate Hotels® brand, adding a significant growth
opportunity for the global hospitality leader in the fast-growing
lifestyle hotel market.
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the full release here:
https://www.businesswire.com/news/home/20240312203078/en/
Graduate Ann Arbor, Michigan (Photo:
Graduate Hotels)
Hilton will pay $210 million to acquire all rights to the
Graduate brand worldwide, enter into franchise agreements for all
existing and signed pipeline Graduate Hotels, and become
responsible for the brand’s future development and growth. AJ
Capital will remain the owner of the more than 35 operating and
pipeline Graduate properties, each of which will be operated under
long-term Hilton franchise agreements.
The transaction, which is expected to close in the second
quarter, subject to customary closing conditions including review
and approval pursuant to Hart-Scott-Rodino, will be immediately
accretive to Hilton. The company expects the fee contribution for
the first full year of ownership to be approximately $16
million.
“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,” said Chris Nassetta, president
and CEO, Hilton. “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. With thousands of colleges and universities around
the world, we believe the addressable market for the Graduate brand
is 400-500 hotels globally.”
The addition of Graduate Hotels to Hilton’s global portfolio
will offer millions of travelers access to unparalleled hospitality
in their favorite university towns. Each Graduate hotel – steeped
in local history, charm and nostalgia – is thoughtfully designed to
reflect the unique character of its local university, offering the
perfect setting for gamedays, reunions, graduations, campus visits
and more. Since its inception in 2014, the brand has grown to span
the United States and the United Kingdom, including locations in
Ann Arbor, Michigan; Knoxville, Tennessee; Palo Alto, California;
State College, Pennsylvania; and Oxford and Cambridge, United
Kingdom, with new hotels opening soon in Austin and Dallas, Texas;
Auburn, Alabama; and Princeton, New Jersey.
“We're proud to embark on this new chapter for Graduate Hotels
with Hilton, the ideal partner to steer the brand's continued
growth," said Ben Weprin, founder, Graduate Hotels and CEO, AJ
Capital. "Both Hilton and Graduate Hotels are committed to
delivering exceptional experiences and making a positive impact on
communities. Our shared values and close collaboration will ensure
a smooth transition while keeping the Graduate Hotels' unique brand
identity intact. With Hilton's extensive network behind us, guests
can anticipate even more exciting opportunities. We're certain this
partnership will propel Graduate Hotels to even greater heights,
while AJ’s ongoing ownership of the real estate assets lays a
strong foundation for our future success."
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 to respond to growing demand from travelers for
localized travel experiences. Hilton’s 2024 Trends Report
identified that nearly a quarter of global travelers 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.
Graduate Hotels are expected to be available for booking via
Hilton channels later this year and will participate in Hilton
Honors, Hilton’s award-winning guest loyalty program for the
company’s portfolio of more than 7,500 properties worldwide.
Members who book directly with Hilton can access instant benefits,
including a flexible payment slider that allows members to choose
nearly any combination of Points and money to book a stay,
exclusive member discounts, free standard Wi-Fi and the Hilton
Honors mobile app.
Hilton continues to offer customers the right stay for every
travel occasion through an unmatched portfolio of industry-leading
brands plus exclusive partnerships that create more experiences for
guests to dream about. The addition of Graduate, as well as a
recently announced partnerships with Small Luxury Hotels of the
World and AutoCamp, adds to the company’s dramatic growth
trajectory and reflects its focus on accelerating offerings for
guests in the industry’s fastest-growing markets and segments.
Deutsche Bank Securities Inc. is AJ Capital’s sole financial
advisor on this transaction.
About Graduate Hotels®
Graduate Hotels is a collection of hand-crafted hotels that
reside in dynamic university-anchored towns in the U.S. and U.K.
Each hotel pays homage to the heritage of its unique town through
cultural nods to the local community. Launched in 2014, there are
currently more than 35 Graduate Hotels open or in the pipeline
across the U.S. and the U.K. Graduate Hotels is owned by
Adventurous Journeys Capital Partners (“AJ Capital Partners” or
“AJ”), a Nashville-based vertically integrated real estate
investment manager with a portfolio of timeless businesses and
brand platforms, founded by Ben Weprin in 2008. For more
information on Graduate Hotels, please visit
www.graduatehotels.com.
About Adventurous Journeys Capital Partners
Adventurous Journeys ("AJ") Capital Partners is a vertically
integrated real estate investment manager founded by Ben Weprin in
2008. The firm specializes in creating distinctive, design-forward
properties in high-demand yet underserved locations. The
multi-disciplined team at AJ brings expertise in placemaking,
inspired design, and hospitality to fuel a diverse portfolio,
currently valued at $5.3 billion across 100+ properties in 50+
markets. The company focuses on hospitality, mixed-use, and
residential sectors. Learn more at www.ajcpt.com.
About Hilton
Hilton is a leading global hospitality company with a portfolio
of 22 world-class brands comprising more than 7,500 properties and
nearly 1.2 million rooms, in 126 countries and territories.
Dedicated to fulfilling its founding vision to fill the earth with
the light and warmth of hospitality, Hilton has welcomed over 3
billion guests in its more than 100-year history, was named the No.
1 World’s Best Workplace by Great Place to Work and Fortune and has
been recognized as a global leader on the Dow Jones Sustainability
Indices for seven consecutive years. Hilton has introduced
industry-leading technology enhancements to improve the guest
experience, including Digital Key Share, automated complimentary
room upgrades and the ability to book confirmed connecting rooms.
Through the award-winning guest loyalty program Hilton Honors, the
more than 180 million members who book directly with Hilton can
earn Points for hotel stays and experiences money can't buy. With
the free Hilton Honors app, guests can book their stay, select
their room, check in, unlock their door with a Digital Key and
check out, all from their smartphone. Visit stories.hilton.com for
more information, and connect with Hilton on Facebook, Twitter,
LinkedIn, Instagram and YouTube.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements include, but are not limited to,
statements related to the expectations regarding the performance of
Hilton's business, future financial results, liquidity and capital
resources and other non-historical statements. In some cases, you
can identify these forward-looking statements by the use of words
such as "outlook," "believes," "expects," "forecasts," "potential,"
"continues," "may," "will," "should," "could," "seeks," "projects,"
"predicts," "intends," "plans," "estimates," "anticipates" or the
negative version of these words or other comparable words. Such
forward-looking statements are subject to various risks and
uncertainties including, among others, risks inherent to the
hospitality industry; macroeconomic factors beyond Hilton's
control, such as inflation, changes in interest rates, challenges
due to labor shortages or disputes and supply chain disruptions;
competition for hotel guests and management and franchise
contracts; risks related to doing business with third-party hotel
owners; performance of Hilton's information technology systems;
growth of reservation channels outside of Hilton's system; risks of
doing business outside of the U.S.; risks associated with conflicts
in Eastern Europe and the Middle East and other geopolitical
events; and Hilton's indebtedness. Additional factors that could
cause Hilton's results to differ materially from those described in
the forward-looking statements can be found under the section
entitled "Part I—Item 1A. Risk Factors" of Hilton's Annual Report
on Form 10-K for the fiscal year ended December 31, 2023, which is
filed with the Securities and Exchange Commission (the "SEC") and
is accessible on the SEC's website at www.sec.gov. Accordingly,
there are or will be important factors that could cause actual
outcomes or results to differ materially from those indicated in
these statements. These factors should not be construed as
exhaustive and should be read in conjunction with the other
cautionary statements that are included in this press release and
in Hilton's filings with the SEC. The Company undertakes no
obligation to publicly update or review any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20240312203078/en/
Kent Landers, Hilton kent.landers@hilton.com Kerstin Hjelm, AJ
Capital Partners khjelm@ajcpt.com
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