Hilton Projects Rapid Growth of Lifestyle Hotels in College Towns

Hilton is expecting its acquisition of the Graduate Hotels brand, which specializes in hotels in near college campuses, to turbocharge the growth of its rapidly expanding lifestyle portfolio.

The hospitality giant announced last week it is acquiring the lifestyle hotel brand from Adventurous Journeys Capital Partners (AJ Capital) for $210M in a deal that gives Hilton worldwide rights to the brand and franchise agreements for existing and signed Graduate hotels.

AJ Capital will continue to own the properties, which will operate under long-term Hilton franchise agreements.

Hilton CEO Chris Nassetta said in a statement that Hilton expects to grow the Graduate brand, which currently encompasses 37 hotels that are operating or under development, to as many as 500 outlets worldwide.

“We believe the addressable market for the Graduate brand is 400-500 hotels globally,” Nassetta said, adding that the acquisition of Graduate “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.”

Nassetta said the acquisition of Graduate would be immediately accretive to Hilton, with Hilton projecting a fee contribution of approximately $16M resulting from its first full year of ownership of the brand.

Graduate’s current portfolio features hotels in some of the largest college towns in the U.S., including Ann Arbor; State College, PA; Knoxville, TN; and Palo Alto. The brand, which also has outlets at Oxford and Cambridge in the U.K., is scheduled to open hotels in Austin, TX and Princeton, NJ.

Each Graduate Hotel is designed to reflect the unique character and history of the local university, with brand marketing touting “the perfect setting for gamedays, reunions, graduations and campus visits.”

Hilton’s rapidly expanding lifestyle portfolio includes Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton and Motto by Hilton, all of which were launched in the past 10 years to serve a growing market for localized travel experiences.

In 2022, when Hilton opened its first Canopy hotel in San Francisco, the company said it expects to double its lifestyle pipeline by 2032. The Canopy by Hilton San Francisco SoMa is marketed as “an authentically local experience” that was designed to be “a natural extension of the neighborhood.”

In its 2024 trends outlook, Hilton projected that the recovery of post-pandemic leisure travel will continue its momentum.

“As the world holds onto a renewed sense of wanderlust following the pandemic, 64% of global travelers say they aim to reduce other areas of their personal spending to prioritize leisure travel in 2024. This is especially true for Gen Z and Millennials, who also plan to spend more on travel in 2024,” the outlook said.