Hotels

How the FRHI deal will benefit Accor

Anne Majumdar

Accor’s acquisition of FRHI Holdings will allow the French hotel group to better compete in a competitive landscape, according to an industry expert.

The deal, which includes 155 Raffles, Swissotel and Fairmont hotels, will bolster the company’s strength in the luxury sector outside Europe, according to Euromonitor International travel analyst lodging Dr Wouter Geerts.

Raffles is strong in Asia and the Middle East, Fairmont in North America while Swissotel has a significant Chinese pipeline in addition to its strong European network.

“Accor’s revenue is heavily reliant on sales from Europe, but since the economic crisis this has been an underperforming region,” he said. “Accor’s main competitors are strong in the US and have benefited from a strong performance of the North American hotel market.”

However, Geerts claimed the US$2.9 billion pricetag was “rather high” for a portfolio of 155 hotels. Marriott snapped up Starwood’s 1270 properties for US$12.2 billion.

Nonetheless, he branded it a “positive development” for the hotel chain, strengthening its position to withstand challenges such as growing pressure from online retailers and consolidation within the sector.

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