Hyatt recently announced the purchase of Apple Leisure Group but has not said much about its plans for Apple Vacations and that creates some odd bedfellows.
Hyatt Acquires ALG (Who?)
Hyatt Hotels (NYSE: H) announced its acquisition of Apple Leisure Group (ALG) and its many subsidiaries. Travel agents certainly know ALG but consumers less so. Apple operated some physical travel agency offices whereby consumers could conduct in-person booking appointments, but it was better known to travel agents for its charter and group sales.
The key points Hyatt management noted at the time of the acquisition and in interviews were:
- Adds 100 premium (and many all-inclusive) resorts
- Does not change Hyatt’s asset-light approach with an 80% fees-based revenue goal
- Increases Hyatt’s footprint in key markets across the Caribbean and Europe
What About Apple Vacations?
In the press release, Hyatt didn’t really discuss the myriad of other businesses that were included in the purchase like Apple Vacations, the retail travel agency. The subsidiary has several additional flags, some of which include Funjet, Cheap Caribbean, Southwest Vacations, and United Vacations. Those brands promote ALG-owned properties but also sell hotel stays from other brands that directly compete with Hyatt.
ALG sells flight packages that are operated by a number of charter carriers which puts Hyatt into the air charter business.
Another complicating factor is Hyatt’s tie-ups with American Airlines who has its Vacations unit managed by “VAX” a competitor to ALG. It’s in Hyatt’s best interest to continue to promote its relationship with World of Hyatt and American Airlines Advantage, but it’s also in Hyatt’s benefit to book tickets with Southwest and United in a direct revenue conflict.
I reached out to Hyatt early last week for comment on these other brands and products but had not received a response by the time of publication.
Hyatt’s failure to discuss this end of the business suggests that they may not have an interest in retaining it. It’s interesting that Hyatt will both recommend competing brands through ALG, while fighting them for business in the same markets.
What do you think? Will Hyatt maintain ALG’s travel agency businesses? Will Hyatt sell this portion of the business?