Hospitality industry giant Hilton Hotels has announced the acquisition of Graduate Hotels brand, expanding its presence in fast-growing lifestyle category.

In order to continue its global expansion and with an eye on capitalising on acquiring loyal fan base of Graduate Hotels, American hospitality giant Hilton has announced an agreement with Adventurous Journeys Capital Partners to acquire the brand popular in leading college towns all over the United States.

In a press statement, Hilton says that it will pay USD 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. 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 this year, subject to customary closing conditions including review and approval pursuant to Hart-Scott-Rodino, will be immediately accretive to Hilton. The company expects the fee contribution for the first full year of ownership to be approximately USD 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, 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,” adds Nassetta.

According to the statement, the addition of Graduate Hotels to Hilton’s global portfolio will offer millions of travellers access to unparalleled hospitality in their favorite university towns. Each Graduate hotel, steeped in local history, charm and nostalgia, is thoughtfully designed to reflect the unique character of its local university, offering the perfect setting for gamedays, reunions, graduations and campus visits.

The statement adds that since its inception in 2014, the brand has grown to span the United States and the United Kingdom, including locations in Ann Arbor in Michigan, Knoxville in Tennessee, Palo Alto in California, State College in Pennsylvania and Oxford and Cambridge in the United Kingdom, with new hotels opening soon in Austin and Dallas in Texas, Auburn in Alabama and Princeton in New Jersey.

“We are proud to embark on this new chapter for Graduate Hotels with Hilton, the ideal partner to steer the brand’s continued growth. Both Hilton and Graduate Hotels are committed to delivering exceptional experiences and making a positive impact on communities. 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. We are certain this partnership will propel Graduate Hotels to even greater heights, while AJ’s ongoing ownership of the real estate assets lays a strong foundation for our future success,’’ says Ben Weprin, founder, Graduate Hotels and CEO, AJ Capital.

The statement adds that the Graduate brand will be incorporated into Hilton’s fast-growing 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 travellers for localized travel experiences.

The statement adds that Hilton has identified that nearly a quarter of global travellers 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.