Hilton Worldwide Holdings has agreed to pay $210 million for the Graduate Hotels brand, a 10-year-old company that operates hotels in some of the nations biggest college towns.
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The parent company of Hilton Hotels has agreed to purchase a chain of hotels that operate exclusively near college campuses, a new bet on college towns for the hotel giant.
Hilton Worldwide Holdings has agreed to pay $210 million for the Graduate Hotels brand, a 10-year-old company that operates hotels in some of the nation’s biggest college towns such as Ann Arbor, Michigan; Oxford Mississippi; Knoxville, Tennessee; Palo Alto, California; and State College, Pennsylvania, according to an announcement made by Hilton on Thursday.
“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,” Hilton CEO and President Chris Nassetta said in a statement.
“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.”
Graduate was launched a decade ago with the intent to fill a lodging niche in college towns. While most college town hotels are either of the suburban cookie-cutter variety or older, high-end hotels, Graduate hotels are known for adjusting the decor of each hotel to match the local area or college, with many hotels heavily incorporating the logo of nearby colleges and their sports teams into its design scheme.
“We’re proud to embark on this new chapter for Graduate Hotels with Hilton, the ideal partner to steer the brand’s continued growth,” Graduate Hotels founder and AJ Capital Partners CEO Ben Weprin said. ” Our shared values and close collaboration will ensure a smooth transition while keeping the Graduate Hotels’ unique brand identity intact.”
AJ Capital Partners, the current parent company of Graduate Hotels, will continue to own the real estate the hotels are situated on. The firm is currently developing new hotels Austin and Dallas, Texas; Auburn, Alabama; and Princeton, New Jersey.
Graduate will join the growing ranks of brands in Hilton’s lifestyle portfolio, alongside Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, and Motto by Hilton, each of which was launched over the past decade to respond to demand from travelers for more unique lodging experiences as the hotel industry competes for market share with Airbnb.
