Aaaaaaaaand the consolidation continues!
First we saw it with the airlines, where the “big six” US carriers became the “big three.” And now we’re slowly seeing it with hotels. Marriott recently announced that they’re acquiring Starwood, which I consider to be pretty devastating, given how much I love Starwood Preferred Guest. SPG members have lots of questions which we likely won’t get an answer to for a while. Late last year IHG announced that they were taking over Kimpton.
Well, here’s the next hotel acquisition. Accor has announced that they’re acquiring Fairmont, Raffles and Swissôtel.
Here are the major points regarding the takeover:
- An unrivalled collection of iconic hotel assets with 155 hotels and resorts, of which 40 are under development
- Acquisition to provide AccorHotels with robust and global leadership in luxury hotels, a key segment in terms of geographic reach, growth potential and profitability, for long-term value creation
- FRHI’s unrivalled hotel portfolio, expertise in marketing luxury hotels and sizeable footprint in North America, provide a stronger platform to continue aggressive worldwide expansion.
- AccorHotels will pay for the acquisition by issuing 46.7 million new Accor shares and a cash payment of $840 million (€768 million) – Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia are to become major shareholders, with 10.5% and 5.8% of the share capital* respectively
- Transaction will be accretive to earnings per share from the second year with €65 million in revenue and cost synergies identified in the medium term
I can see how the merger makes sense from Accor’s perspective. For those of you not familiar with Accor, they have nearly 3,800 hotels (and 500,000 hotel rooms) in 92 countries, ranging from luxury to budget brands.
Fairmont, Raffles, And Swissôtel are tiny by comparison, but are strong in the luxury sector, which is an area where Accor is fairly weak. The deal is expected to close in mid-2016, around the same time the Marriott & Starwood deal is expected to close.
Stunning view from the Fairmont Pacific Rim Vancouver
Here’s the email Fairmont sent out to their President’s Club members:
As a valued Fairmont President’s Club member, we want you to be among the first to learn about the exciting news that was announced today.
FRHI Hotels & Resorts, the parent company of Fairmont Hotels & Resorts, will soon be joining AccorHotels. This is an extraordinary milestone as Fairmont’s unrivalled collection of iconic hotels joins one of the world’s leading hospitality groups.
Being part of this global hotel portfolio means that in the future we will be able to provide you with more options in new and exciting locations around the world. AccorHotels is a global leader in the travel industry with a diverse portfolio located in 94 countries, over 3,800 properties and 20 recognized luxury, midscale and economy brands including Sofitel, Pullman, MGallery, Grand Mercure, and Novotel.
This latest news does not change our brand promise to you as we remain committed as ever to providing you with unparalleled service and access to unique and meaningful travel experiences whenever you stay with us.
While an exciting next chapter awaits, we want to let you know that today your membership in Fairmont President’s Club and any upcoming reservations including reward redemptions remain unchanged, and as a loyal guest you will continue to enjoy all your current benefits and privileges when staying at Fairmont Hotels & Resorts.
As we move forward on our journey with AccorHotels, we will look to find new and interesting ways to further enhance your travel experiences and we promise to keep you informed as we learn more about the exciting enhancements ahead.
Thank you for your ongoing loyalty and we look forward to welcoming you to one of our locations soon.
Nothing will change immediately, though I think it’s safe to assume that eventually the Fairmont President’s Club will be folded into Le Club Accor. That’s quite unfortunate, because President’s Club is a really cool niche program which a lot of people love.
I’ve written in the past about Fairmont President’s Club loyalty program (including their Premier and Platinum status levels), as well as their co-branded credit card, which comes with some awesome perks.
Fairmont President’s Club offers even their base members free internet, health club access, discounts on the hotel spa, etc. With status you get some confirmed upgrades, e-certificates for restaurants and spas, etc. There are some really cool perks, and the status qualification levels aren’t that high.
I think it goes without saying that consolidation is terrible news for consumers. We saw that with airlines, and it seems like we’re now seeing it with hotels. It’s especially sad in the case of Fairmont, which was such a cool niche hotel group. I’d be willing to bet their program will be eliminated soon enough.
Now that we’ve seen three hotel mergers of varying scales (IHG and Kimpton, Marriott and Starwood, and Accor and Fairmont), here’s to hoping that Hilton, Hyatt, and/or IHG don’t have any further mergers (especially Hyatt)…
What do you make of Accor taking over Fairmont?