Hilton, one of the largest hotel chains in the world, is considering an acquisition that could make it a leading player in college towns and cities across the United States. According to a report by Bloomberg, Hilton is in talks to acquire Graduate Hotels, a brand that is heavily concentrated in the US but also has properties in the UK.
Graduate Hotels initially started as a boutique hotel brand that focused on college towns such as Oxford, Mississippi, Athens, Georgia, and Ann Arbor, Michigan. These towns are home to prestigious universities and have a strong demand for accommodations catering to the needs of students, alumni, and visitors to these educational institutions. However, the brand has since expanded to larger cities with a significant higher education presence, such as Nashville, New York City, and Providence, Rhode Island.
While the potential deal has not been finalized, if it were to go through, it would mark a strategic departure for Hilton. The hotel chain has traditionally focused on organically launching and growing its own brands, while its competitors like Marriott, Hyatt, and IHG have acquired existing brands to enter new markets or expand their geographic presence.
Consolidation of brands has become a trend in the hotel industry, as companies seek to leverage their resources and expand their market share. Hilton’s potential acquisition of Graduate Hotels would align with this trend and allow the company to enter the college town market, which has shown potential for growth and profitability.
This is not the first time Hilton has been rumored to be considering a brand takeover. At the Americas Lodging Investment Summit, there was speculation about Hilton’s potential acquisition of the trendy NoMad Hotels brand, which operates hotels in Las Vegas and London. Such a move would support Hilton’s hinted expansion into the luxury lifestyle brand segment.
The advantages of acquiring an existing brand include instant market presence and brand recognition, which can be time-consuming and costly to develop organically. By acquiring Graduate Hotels and potentially NoMad Hotels, Hilton would gain immediate exposure to the lifestyle hotel sector across various markets and price points. Graduate Hotels could cater to smaller markets that desire a trendy hotel with local bars and restaurants, while NoMad Hotels could compete with Marriott’s Edition brand in some of the world’s largest and most luxurious cities.
The potential acquisition of Graduate Hotels reflects Hilton’s strategy of capitalizing on market opportunities and expanding its brand portfolio. While the deal has not been confirmed, it highlights Hilton’s ambition to become a leading player in the college town and lifestyle hotel segments. As the hotel industry continues to evolve and consolidate, it will be interesting to see how Hilton’s potential acquisition of Graduate Hotels unfolds and whether it will lead to further expansion and success for the hotel giant.