MW Hyatt may add hotels in Mexico, Jamaica with potential Playa merger

By Steve Gelsi

Playa's stock rises as the smaller hotel operator as Hyatt discloses exclusive merger talks

Playa Hotels & Resorts NV's stock was rallying 11% in premarket trading on Monday after the company said it agreed to enter into exclusive strategic talks with Hyatt Hotels Corp. in a move that would boost the larger hotel chain's presence in Jamaica, Mexico and the Dominican Republic.

The talks could result in a merger deal that would likely top the $1.2 billion market capitalization of Playa Hotels as of Friday's close.

Playa Hotels $(PLYA)$ and Hyatt $(HKPD)$ have already worked together on a number of properties that Playa Hotels manages including the Hyatt All-Inclusive, Hyatt Zilara, and the Hyatt Ziva.

All told, Playa Hotels owners or manages 24 resorts with 8,627 rooms.

Hilton said the talks with Playa "could have compelling strategic merit to add new incremental durable fee streams for Hyatt."

Those options include the purchase of Playa Hotels, which Hyatt described as "one of the world's strongest operators of all-inclusive resorts" and the owner of a "premier portfolio of high-quality, high-end all-inclusive resorts in iconic locations and key markets across the Caribbean and Mexico."

The potential deal comes as Playa Hotels faces a slowdown due to the impact of Hurricane Beryl in Mexico in July, but the hotel chain has since been in recovery mode.

On the company's most recent quarterly call with analysts Playa Hotels Chief Executive Bruce D. Wardinski said while Hyatt has been making inroads into some of Playa's areas, they aim for a different client base.

"They're very large properties with lots and lots of rooms," he said. "They go after, quite honestly, a different kind of customer."

Ahead of Monday's moves, Playa's stock was up 11% in 2024, while the Nasdaq has gained 30.4%.

Hyatt's stock has risen by 22.6% this year.

-Steve Gelsi

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December 23, 2024 07:04 ET (12:04 GMT)

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