Hyatt Hotels is selling its Andaz boutique hotel in downtown Napa, California. The group has listed it for $75 million, according to industry reports. Hyatt intends to retain managerial control under new owners also.
News of the sale was first reported by the Napa Valley register. The website spoke to a number of industry experts on the announced listing who asserted that the move is a 'pretty common strategy' for the Hyatt group as it does not like to "tie-up cash in hard assets."
"The management contracts are pretty much pure cash flow to a company like Hyatt," said Don Winter, a national hotel and restaurant consultant.
Commenting on the price, Winter added:
"With an asking price of $75 million, it's probably a little pricey, but these deals are always negotiated. If Hyatt wants out they are going to sell at the right price. Hyatt has done the math, but investors aren't dumb."
Hyatt launched the brand "Andaz" in 2007. Currently, there are nine Andaz hotels scattered around various parts of the world including New York, London and Shanghai.
The Andaz Napa previously belonged to LodgeWorks, a Wichita-based hotel management company, and was a part of their chain brand "Avia". The Hyatt group acquired "Avia Napa" in 2011 and changed its name to "Andaz Napa" in 2012, adding a "Hyatt" touch to it. Located in the West End of the city, it has 141 guestrooms, an elaborate lobby lounge and an elite restaurant. Combined with its special customized services, the hotel is one of the best in the area.
Check out the photos of the hotel here.
Along with Andaz Napa, the Andaz Savannah in Georgia is also up for sale. The two hotels were introduced by Hyatt in the same year. Both hotels are going up for sale now.
While Hyatt is seeking to sell two of its Andaz hotels, it will soon be opening its first Andaz brand in Japan, Andaz Tokyo. The hotel is slated to open by the summer of 2014.
Meanwhile, large hotel chains are increasingly shedding hotel spaces but retaining management control as that is more profitable. Recently, InterContinental Hotel Group also sold its famed London Park Lane hotel for $457 million while holding on to its managerial power.