Hilton intends to buy Graduate Hotels for $210 million
Hilton is set to become a leading hotel player in college towns and cities across the U.S.
The hotel giant plans to acquire Graduate Hotels — a brand that’s heavily concentrated in the U.S. but also has properties in the U.K. — from owner AJ Capital. The deal is valued at $210 million.
Hilton will own the rights to the Graduate Hotels brand and be in charge of future development and growth through franchising. But, AJ Capital will retain real estate ownership of the existing Graduate portfolio of open hotels and those in development under new long-term Hilton franchise agreements.
Rumors that a takeover was in the works were first reported last month. 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.
“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,” Hilton CEO Chris Nassetta said in a prepared statement. “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."
Graduate Hotels has more than 35 hotels that are either open or in development, but that figure is expected to throttle much higher: Nassetta noted the brand could eventually reach as many as 500 hotels. The acquisition is expected to close by the end of June.
Graduate will reside alongside Canopy, Tempo, Motto and the Curio and Tapestry Collections in Hilton's lifestyle brand portfolio.
"Both Hilton and Graduate Hotels are committed to delivering exceptional experiences and making a positive impact on communities," Ben Weprin, the founder of Graduate Hotels and CEO of AJ Capital, said in a prepared statement. "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."
Hilton's new growth strategy
The brand takeover is 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,” LW Hospitality Advisors CEO Daniel Lesser said.
The Graduate Hotels deal wasn’t even the first rumored brand takeover for Hilton in recent months.
Investor and analyst chatter at the Americas Lodging Investment Summit in January 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 can 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 earlier this year is any clue, it’s clear Hilton is all about shiny things these days that garner maximum exposure.
Related reading:
- The award travelers guide to Hilton Honors
- How to choose the best Hilton credit card for you
- What is Hilton Honors elite status worth?
- The best credit cards to reach elite status
- Which credit cards offer the most lucrative rewards for hotel stays?
- The best hotel rewards programs in the world
- Best hotel credit cards
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
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- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.