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Hilton Buys Graduate Hotels for USD 210 Million



As reported by Reuters, Hilton revealed its acquisition of Graduate Hotels from Adventurous Journeys Capital Partners for USD 210 million on Thursday. This move marks Hilton’s first brand purchase in over two decades and comes amidst increasing pressures in the hotel industry, which have created opportunities for consolidation. Hilton sees significant potential in the Graduate brand, which primarily serves locations near major colleges and universities in the United States and the United Kingdom, estimating a global market of 400-500 hotels.

“University towns tend to have steady demand, from students, parents, and visiting academics, largely unconnected to the global economy,” remarked Richard Clarke, an analyst at Bernstein. Despite the relatively modest size of Graduate Hotels, with only around 35 operating and pipeline properties, Hilton’s shares experienced a slight increase during premarket trading following the announcement.

CEO Chris Nassetta highlighted during Hilton’s fourth-quarter earnings call that the current challenges in the industry offer opportunities for modest acquisitions. The transaction is expected to close in the second quarter, with Hilton projecting a fee contribution of approximately USD 16 million for the first full year of ownership.

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