AccorHotels believes that the addition of the three brands positions the company as a leading player in the global luxury hotel market, increases long term growth potential and profitability, and significantly expands the company’s footprint in North America, the world’s largest and most influential consumer market.
“Today is a great day for our group. The acquisition of these three emblematic luxury hotel brands is a historical milestone for AccorHotels. It will open up amazing growth prospects, lift our international presence to unprecedented heights, and build value over the long term,” says Sébastien Bazin, chairman and chief executive officer of AccorHotels.
Joining AccorHotels’ global network are The Savoy in London, Raffles Singapore, Fairmont San Francisco, New York’s The Plaza, Fairmont Le Château Frontenac in Quebec City, and Le Royal Monceau Raffles Paris.
“We remain committed to providing guests with unparalleled service, while also keeping the ambition to deliver exceptional return on investment for our shareholders and hotel owners,” adds Bazin. “By leveraging the operational synergies between FRHI and AccorHotels, we are well-positioned to accelerate the growth of our luxury brands and offer guests even more exciting hotel choices and destinations to explore.”
In support of the acquisition, and as part of AccorHotels’ larger strategy to strengthen its luxury and upscale business, the company has appointed Chris Cahill as chief executive officer, luxury brands. In this newly created role, Cahill, who will also become a member of AccorHotels’ executive committee, will lead the FRHI integration process and be responsible for the strategy and global operations of AccorHotels Luxury Brands. This new structure will include Raffles, Fairmont, Sofitel Legend, So Sofitel, Sofitel, MGallery by Sofitel, Pullman and Swissôtel.
Cahill is an experienced hotelier who has led several successful integrations, is familiar with multi-brand management and brings an extensive background in luxury operations, sales and marketing. He has more than 30 years of hospitality industry experience, including 19 years working with FRHI and its predecessor companies. He most recently served as executive vice president global operations at Las Vegas Sands Corp.
Following the approval of shareholders at the General Shareholders Meeting on 12 July 2016, the transaction with Qatar Investment Authority (QIA) and Kingdom Holding Company (KHC) of Saudi Arabia provided a USD840 million (EUR768 million) cash payment and the issuance of 46.7 million AccorHotels shares in consideration for the contributed FRHI shares.
The transaction gives QIA and KHC respective stakes of 10.4 per cent and 5.8 per cent in Accor’s share capital. Ali Bouzarif and Aziz Aluthman Fakhroo from QIA and Sarmad Zok from KHC will now join AccorHotels’ board of directors.
AccorHotels plans to generate approximately EUR65 million in revenue and cost synergies thanks to the combination of brands, the maximisation of hotel earnings, the increased efficiency of marketing, sales and distribution channel initiatives, and the optimisation of support costs. Significant enhancements will also be made in terms of customer data, thanks to the integration of FRHI’s customer base that includes three million loyalty members, of which 75 percent are in North America.
The vast majority of Fairmont, Raffles and Swissôtel’s 154 hotels and resorts (of which 40 are under development) and 56,000 rooms spanning 34 countries and five continents are operated under long-term management contracts, with an average term of nearly 30 years; six hotels are leased and one hotel is owned. The Fairmont, Raffles and Swissôtel brands employ more than 45,000 colleagues worldwide.
Source: PropertyFundsWorld