Acquisition Will Give Hilton Grand Almost 200 Total Timeshares
Hilton Grand Vacations announced that it will purchase Bluegreen Vacations for $75 per share in a cash deal valued at about $1.5 billion (including net debt). Both brands operate as timeshares, a hospitality industry business model that gives owners the use of a property for a set duration. The deal is expected to be finalized during the first half of 2024.
The leadership of the Hilton Grand Vacations brand said the acquisition of Bluegreen Vacations will expand its customer reach as well as its destinations. Bluegreen Vacations’ owners currently can choose from 48 sites in the United States and Caribbean for their getaways in the mountains, near golf courses, at seaside venues and more.
More Hilton Grand Members and Sites
With the transaction, Hilton Grand Vacations will boost its membership base to more than 740,000 owners and its resort portfolio to nearly 200 properties. Foxbusiness.com reported that Hilton Grand Vacations’ current membership base is 525,000-plus, and it currently has 150 properties.
Foxbusiness.com said the deal will position Hilton Grand Vacations sites in 14 new geographic locations, including eight new states. A Reuters article noted that the acquisition will, in particular, grow Hilton Grand Vacations’ footprint on the East Coast while adding ski destinations. Both brands have resort sites in Las Vegas and in Charleston, S.C., according to Bloomberg.
Boost from Bass Pro Shops
In a news release about the transaction, Hilton Grand Vacations stated that the acquisition should broaden and diversify the brand’s consumers because of Bluegreen Vacations’ partnerships, which include an exclusive marketing agreement with Bass Pro Shops and its outdoors enthusiasts. The Bass Pro Shops partnership was expanded in conjunction with the sale of Bluegreen Vacations, with Hilton Grand Vacations signing a new 10-year exclusive marketing agreement with the outdoors-recreation equipment retailer.
Mark Wang, president and CEO of Hilton Grand Vacations (HGV), said, “Bluegreen Vacations has a strong track record of demonstrated organic growth, a dedicated customer base of more than 200,000 members, and boasts key lead-generating strategic partnerships that will broaden our reach and diversify our tour flow. Along with our long-standing relationship with Hilton, this highly complementary combination will also unlock additional upside by leveraging the infrastructure we have built over the past few years with the launch of the Hilton Vacation Club brand, our HGV Max membership offering, the HGV Ultimate Access experiential platform.”
Advantage of Hilton Brand Strength
Bluegreen Vacations benefited when travel within the United States surged for a couple of years after the Covid pandemic eased, but domestic travel is in decline because of inflation, the Reuters article stated. This stagnation in U.S. domestic travel delivers a harder hit on lesser-known brands such as Bluegreen Vacations. Hilton Grand Vacations is a publicly traded affiliate of the Hilton Hotels megabrand, according to Investors.com – an instant marketing advantage, according to Truist Securities.
“One of the major challenges with an independent vacation ownership company like Bluegreen Vacations is that they do not have a well-recognized brand like Hilton Grand Vacations does, and subsequently customer acquisition cost is significantly higher,” Truist Securities pointed out in the Reuters article. Completion of the sale will instantly give the Bluegreen resorts a stronger marketing presence.