Hyatt Hotels has agreed to acquire resorts operator Apple Leisure Group from private equity firms KKR and KSL Capital Partners for $2.7 billion in cash, as the US hotel group bets on a rapid rebound of leisure travel from the Covid-19 pandemic. The acquisition of Apple Leisure Group – which owns luxury resort brands Zoëtry and Alua hotels – will double Hyatt’s global resorts footprint, expand its reach in new markets and increase the percentage of revenue generated from fees, Hyatt said in a statement on Sunday. "ALG’s portfolio of luxury brands, leadership in the all-inclusive segment and large pipeline of new resorts will extend our reach in existing and new markets, including in Europe, and further accelerate our industry-leading net rooms growth," Mark Hoplamazian, president and chief executive of Hyatt, said. Leisure travel is expected to recover faster than other segments with pent-up demand for holidays after months of lockdowns due to the Covid-19 pandemic that has devastated air travel demand globally. Hyatt's acquisition of the luxury resorts operator is in line with its core strategy of targeting wealthy travellers. Apple Leisure Group is currently owned by US-based private equity firm KKR and the travel-and-leisure sector investor KSL Capital Partners. The transaction is expected to close in the fourth quarter of 2021, subject to customary closing conditions, according to the statement. The Chicago-based hotelier expects to fulfil its current commitment to sell $1.5bn of hotel real estate in 2021 with plans of additional $2bn in proceeds from the sale of hotel properties by the end of 2024. Hyatt said it will fund the acquisition of Apple Leisure Group with a combination of cash and new debt financing. It will fund more than 80 per cent of the purchase with $1bn of cash on hand and new debt financings, and the remainder with approximately $500 million from equity financing. It also secured a $1.7bn financing commitment from JP Morgan. Cash proceeds from Hyatt's $2bn hotel assets sale programme are expected to be used to pay down debt, including debt incurred to fund the acquisition, it added. "The acquisition of ALG’s asset-light business will meaningfully increase the percentage of revenues and earnings Hyatt will generate from fees," Hyatt said. Hyatt expects to reach 80 per cent fee-based earnings by the end of 2024, thanks to its asset-light acquisition of the Apple Leisure Group and its commitment to sell $2bn of hotel assets. Apple Leisure Group's hotel portfolio comprises more than 33,000 rooms in 10 countries. The portfolio has grown to approximately 100 properties by the end of 2021 and has a pipeline of 24 executed deals with a large number of additional hotels in the development process. It also runs the Unlimited Vacation Club, a subscription scheme that offers discounts and other benefits for travellers, and operates one of the largest packaged tour providers in North America serving Mexico and the Caribbean. Following completion of the transaction, Hyatt will be the largest operator of luxury hotels in Mexico and the Caribbean, with its European footprint expanding by 60 per cent, it said. The acquisition will boost Hyatt’s footprint into 11 new European markets, advancing the hotelier’s growth potential in the continent, a critical area for global growth in leisure travel, it added. “Combining Hyatt’s deep expertise and global brand footprint with ALG’s strong resort brands, operating capabilities and robust development plans will elevate our differentiated position and create a leader in luxury leisure travel,” Alejandro Reynal, chief executive of Apple Leisure Group, said. In the second quarter of 2021, Hyatt narrowed its net loss to $9m, from a net loss of $236m in the same period a year earlier, as travel demand "rebounded sharply" in certain markets, it said earlier this month.