Hilton today announced an agreement with Adventurous Journeys Capital Partners (AJ Capital) to acquire the Nashville, Tenn.-based Graduate Hotels brand. The purchase includes locations in Ann Arbor and East Lansing.
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. Deutsche Bank Securities Inc. is AJ Capital’s sole financial advisor on this transaction.
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 of 2024, is subject to customary closing conditions including review and approval from the federal government. 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,” says Chris Nassetta, president and CEO of 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 travelers access to hospitality in their favorite university towns. Each Graduate hotel is designed to reflect the unique character of its local university, offering settings 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. New hotels are set to open soon in Dallas, and Austin, Texas; Auburn, Ala.; and Princeton, N.J.
The Graduate brand will be incorporated into Hilton’s 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.
According to Hilton, its “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 guest loyalty program for the company’s portfolio of more than 7,500 properties worldwide.
