What's Happening?
Hyatt Hotels Corporation has finalized the sale of its Playa Hotels & Resorts real estate portfolio to Tortuga Resorts for approximately $2 billion. This transaction includes 15 all-inclusive properties located in Mexico, the Dominican Republic, and Jamaica. Hyatt has retained $200 million in preferred equity in Tortuga and has entered into 50-year management agreements for 13 of the 14 properties with Tortuga, maintaining terms consistent with existing agreements. The sale aligns with Hyatt's strategy to focus on an asset-light business model, using the proceeds to repay a delayed draw term loan that funded part of the Playa acquisition. The transaction was advised by BDT & MSD Partners, Berkadia, and Latham & Watkins LLP for Hyatt, while Tortuga was advised by Goldman
Sachs & Co. LLC and Simpson Thacher & Bartlett LLP. Additionally, due to damage from Hurricane Melissa in October 2025, seven Hyatt properties in Jamaica are expected to remain closed until the fourth quarter of 2026.
Why It's Important?
This transaction is significant as it reflects Hyatt's strategic shift towards an asset-light business model, which is intended to enhance its financial flexibility and focus on management and franchise operations rather than property ownership. The sale allows Hyatt to maintain its investment-grade credit profile by reducing leverage through the repayment of a term loan. The long-term management agreements ensure that Hyatt continues to benefit from the operational success of these properties. The closure of properties in Jamaica due to hurricane damage highlights the ongoing challenges faced by the hospitality industry in managing natural disaster risks, emphasizing the importance of resilience and support systems for affected employees.
What's Next?
Hyatt will focus on managing the properties under the new agreements and supporting the recovery of the damaged properties in Jamaica. The company will likely continue to explore opportunities to expand its asset-light strategy, potentially seeking similar transactions in the future. The reopening of the affected properties in Jamaica will be a key focus, with efforts to restore operations by the fourth quarter of 2026. Stakeholders, including employees and local communities, will be closely monitoring the recovery process and the impact on employment and tourism in the region.
