PARIS: After announcing the deal in December last year, Accor Hotels has now officially finalised the acquisition of FRHI Hotels & Resorts (FRHI) and its three prestigious luxury hotel brands, Fairmont, Raffles and Swissôtel. The hotel’s board approved the same at the General Shareholders Meeting on July 12, 2016.
With the deal Accor will now own some of the most historic luxury hotels in the world. These include 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.
These additions position AccorHotels as a leading player in the global luxury hotel market. The firm hopes to increases its 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 with this deal.
“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. 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,” says Sébastien Bazin, Chairman and Chief Executive Officer of AccorHotels.
New CEO for luxury brands
As part of AccorHotels’ larger strategy to strengthen its luxury and upscale business, the company has appointed Chris Cahill as the Group’s Chief Executive Officer, Luxury Brands. In this newly created role, Chris, 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.
Chris 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. With more than 30 years of hospitality industry experience, including 19 years working with FRHI and its predecessor companies, Chris is ideally positioned to lead the integration of the Fairmont, Raffles and Swissôtel brands into the AccorHotels portfolio, and will ensure AccorHotels’ luxury brands grow and prosper. 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 July 12, 2016, the transaction with Qatar Investment Authority (QIA) and Kingdom Holding Company (KHC) of Saudi Arabia provided $840 million (€768 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% and 5.8% 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 €65 million in revenue and cost synergies thanks to the combination of brands, the maximization of hotel earnings, the increased efficiency of marketing, sales and distribution channel initiatives, and the optimization 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.
AccorHotels is a world-leading travel & lifestyle group and digital innovator offering unique experiences in more than 4,000 hotels, resorts and residences, as well as in over 2,500 of the finest private homes around the globe.