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More big brand hotel mergers to follow says Accor CEO

AccorHotels Luxe division CEO Chris Cahill forecasts competitors will continue to expand

Pictured: AccorHotels Luxe division CEO Chris Cahill

Multi-brand hotel and service provider Accor’s extraordinary expansion shows no sign of slowing down and one of its top executives forecasts his competitors will continue to do the same.

AccorHotels Luxe division CEO Chris Cahill said: “Consolidation in hospitality is driven by the same reason as other industries because scale is important. The cost of technology and distribution continues to increase and you need scale to offset that.

“Capital is cheap, valuations are high and companies are finding it harder to maintain 15 per cent return on investment, therefore there is pressure to expand fast through acquisition so I think consolidations will continue”.

Cahill was speaking at the Fairmont Hotels Global Meeting Exchange in Barcelona – a customer engagement event that brought together 152 clients with 50 hoteliers in a mix of presentations, networking and 3,600 one-on-one meetings at the Hotel Rey Juan Carlos in Barcelona.

Clients – mostly agencies, but including some corporates, from around the world – were brought up to speed on Accor’s portfolio including the acquisition of Fairmont Hotels, Swisssotel and Raffles, the biggest deal undertaken last year. But there were other expansion deals done, including Huazhu in China, 25 Hours, One Fine Stay, the launch of Joe & Joe, the acquisition of John Paul Concierge, Adia Australian Portfolio and another deal with Banyan Tree.

The two key questions being asked by participants were: can Accor sell the luxury brands properly, and will the Fairmont Hotels Global Meeting Exchange survive the merger? Cahill was insistent that the latter should survive “subject to customer feedback.”  He said: “You have to look at the feedback but in previous years participants have been positive so I see no reason why we might not do so but we may also add another in North America.” 

Whether Accor can market and sell at the luxury end of the market will be demonstrated over time. Most certainly the Accor portfolio is now broad and no longer ‘bottom-heavy’ and has a lot to offer the event organisers from low budget to high end.

Kate Scully of energy company Petrofac asked: “The ease of working with the FRHI has been good. How are you going to keep the personal touch in the future in terms of the sales team at the luxury end of the market?”

Cahill’s response was direct: “We don’t want brand blur or brand creep, we need to maintain the brands and we are focused on that. If we don’t sell the way it should be, we hope you, our customers, will let us know.”

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