Hilton acquires Graduate Hotels in USD 210 Million deal, marking first brand acquisition in over two decades

According to Reuters, on Thursday, Hilton announced its acquisition of Graduate Hotels from Adventurous Journeys Capital Partners for USD 210 million, marking its first brand purchase in over 20 years amidst growing pressures in the hotel industry, creating opportunities for consolidations. Hilton sees significant potential in the Graduate brand, which primarily caters to 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,” commented Richard Clarke, an analyst at Bernstein. Despite the modest size of Graduate Hotels, with only around 35 operating and pipeline properties, Hilton’s shares saw a marginal increase during premarket trading following the announcement.

During Hilton’s fourth-quarter earnings call that the current industry stress presents opportunities for modest acquisitions. The transaction is slated to close in the second quarter, with Hilton anticipating a fee contribution of approximately USD 16 million for the first full year of ownership.