TORONTO — By the end of 2018 Hilton and Playa Hotels & Resorts will introduce Hilton La Romana, an All-inclusive Resort, and Hilton Playa del Carmen, an All-inclusive Resort, adding 1,269 new Hilton guest rooms to its existing global portfolio as part of a new strategic alliance between the two hotel companies.

As part of the transaction, Playa will commence management of the resort currently known as Dreams La Romana. The property will be rebranded as the Hilton La Romana, an All-inclusive Resort by year-end.

In addition, The Royal Playa del Carmen will become Hilton Playa del Carmen, an All-inclusive Resort.

Playa Hotels & Resorts has been the owner of Dreams La Romana while it has been managed by AMResorts. In November Playa will be both the owner and operator.

The agreement between Playa Hotels and Hilton also includes the potential for the conversion and management of 8 additional resorts by 2025.

Hilton President and CEO Christopher J. Nassetta says Hilton’s “ambitious expansion journey with Playa” dovetails with Hilton’s plan to expand its all-inclusive portfolio and commitment to resort growth in the Caribbean and Latin America.

Says Playa Chairman and CEO Bruce Wardinski: “Our strategic alliance with Hilton is a win-win for both companies. This alliance will empower us to reach more guests, on more occasions, and in more geographies, than ever before. We view this as just a first step toward what is possible as part of this strategic alliance, and Playa is thrilled to continue to grow along-side Hilton and our other world class partners.”

A statement from Playa notes that while there will be some initial disruption, strategic alliances with world class partners such as Hilton “can be transformative for Playa” in the long-run.

“As a result of rebranding and renovations, as well as competitive discounting among our peers in Playa del Carmen and Cancun, at the midpoint, we currently expect our 2018 and 2019 EBITDA outlooks to decrease by $4.5 million and $26.0 million, respectively.”

Playa sees these selling points from the deal:

• Increased brand and sourcing diversification: delivering the best products and service to more guests, more often, in more locations.
• The ability to leverage the expertise and cost of Playa’s existing loyal local and regional management teams.
• Targeted stabilized cash-on-cash returns.

“We look forward to capitalizing on the power of the Hilton brand, the strength of our respective development teams, and Playa’s world-class all-inclusive management expertise, to accelerate the growth of Hilton’s all-inclusive resorts,” says Fernando Mulet, Ssenior Vice President, Head of Development at Playa.

The converted properties will allow guests to earn and redeem Points through Hilton Honors.

Earlier this year Playa Hotels & Resorts signed an agreement with Sagicor Group Jamaica Limited. The deal saw Sagicor contribute five all-inclusive resorts and two adjacent oceanfront developable land sites in Jamaica to Playa’s growing portfolio.

The portfolio includes four existing resorts, including the 489-room Hilton Rose Hall, the 268-room Jewel Runaway Bay, the 250-room Jewel Dunn’s River, and the 225-room Jewel Paradise Cove. It also includes an 88-room hotel tower and spa, two developable land sites with a potential density of up to 700 rooms, and a hotel management contract for the Jewel Grande Palmyra.