Europe’s AccorHotels Acquires Fairmont Parent FRHI
by Jessica Montevago /Europe’s largest hotel operator AccorHotels announced today it inked a deal to buy FRHI Hotels & Resorts, the parent company of luxury brands Fairmont, Raffles, and Swissôtel, for about $2.9 billion.
Accor will pay Qatar Investment Authority, Kingdom Holding, and Oxford Properties $46.7 million in new shares and $840 million in cash, according to a statement.
The Paris-based company currently operates more than 3,800 hotels in 94 countries, including brands Sofitel, Pullman, MGallery, Grand Mercure, and Novotel. By acquiring Canadian FRHI, it adds more than 100 high-end hotels to its portfolio, among them London’s Savoy and New York’s Plaza Hotel.
In an email to its “Famous Agents,” the company assured travel professionals that the membership program and any upcoming reservations, including reward redemptions and point balances, will remain unchanged.
The transaction still needs to be approved by shareholders and is expected to boost Accor’s earnings by the second year.
The big get bigger
Accor’s takeover of FRHI, and acquisition of 29 hotels across Europe in November, is just another example of the growing trend of consolidation in the travel industry; Marriott last month announced its acquisition of Starwood, creating the world’s largest hotel chain. These mega-mergers are widely seen as a move by the hotel chains to fight back against new competitors like Airbnb.
And, it appears as though it will only continue. Other hotel chains, like InterContinental Hotels Group and Hilton, will feel pressure to consolidate as well. Earlier this month, Bjorn Hanson, clinical professor at New York University’s Preston Robert Tisch Center for Hospitality and Tourism, told TMR to expect these transactions “over the next two to three years,” with the Marriott-Starwood merger accelerating others.
A little je ne sais quoi in North America
Rick Harvey Lam, Accor’s senior vice president for global marketing, luxury & upscale brands, told TMR last month the company was interested in expanding its presence in North America. For Accor, the acquisition of Canada-based Fairmont marks a big move into the upscale end of the North American hotel market. Its luxury image and cultured French je ne sais quoi are a good fit with the FRHI customer base and the bilingual Canadian market, and will add 42 properties to its current base of 16 in North America.
Photo courtesy: Fairmont
