Marriott’s finally left alone to swallow Starwood. Accor put together a deal to buy Fairmont. But the musical chairs in the hotel space are far from over. In fact, each of the rest of the major chains could be a player in an upcoming deal.
Lobby of the Fairmont Royal York, Toronto
Hyatt was a potential suitor for Starwood, but the complex deal structure got in the way. The Pritzker family’s shares have 10 times the voting rights of ordinary shares. While Hyatt was going to restructure their stock in order to do the Starwood deal, the restructure wasn’t going to give this away entirely (privileging shares held for long periods with extra voting rights).
It would seem as though Hyatt would be a logical acquisition target for another big chain looking to grow (it’s about half Starwood’s size), but the Pritzker shares rule out hostile takeovers and make Hyatt as likely to remain an acquirer as an acquiree — the only problem is, who? IHG of course is closer in market cap to Hyatt than Starwood was.
View from the Park Hyatt Sydney
IHG has been in the market to either acquire or be acquired. They purchased Kimpton, and haven’t digested it yet, but it was a small acquisition and the hotelier has gaps at the upper end. Starwood might have made sense for them.
Wyndham had been rumored to be a possible acquirer of Starwood. So many Starwood executives have gone over to Wyndham in the past few years that the chain acquired the nickname ‘Wynwood’.
Carlson Hotels is a small player that could become an acquisition target.
In January Hilton’s CEO said they planned to grow without a merger, suggesting he didn’t see any deals on the horizon for the chain. Weigh that statement about as heavily as Marrott’s CEO saying last year that Marriott wouldn’t be doing Starwood-type deals.
With the high price that Starwood fetched — much higher than it appeared in November — smaller chains are looking to sell themselves. With Marriott bulking up and seeing size as the preeminent determinant of success both against online travel agencies and in obtaining corporate travel deals (and individual purchase decisions through a global loyalty program) other chains are going to want to bulk up to go head-to-head.
It’s unlikely we’ve seen the end of hotel industry consolidation.