Three months ago I speculated on what a Starwood-IHG (or Wyndham) merger would look like.
Last week market excitement ratcheted up over an IHG-Starwood combination, although that culminated in word from IHG that talks ended without a deal. (Starwood is still a potential acquisition target for Wyndham and Accor.)
Now it appears that IHG, the parent of Intercontinental, Holiday Inn, Crowne Plaza, and related brands is looking at acquiring Fairmont. (HT: canucklehead)
Intercontinental Hotels Group (IHG) is reportedly eyeing a bid for luxury hotel chain Fairmont, according to a report in UK media.
It was reported in June that owners of FRHI Hotels & Resorts, which include a Qatari government fund (Katara Hospitality) and Saudi Prince Alwaleed bin Talal’s Kingdom Holding Company, are looking to sell the luxury operator.
Deutsche Bank and Morgan Stanley were hired to market the Toronto-based company, whose brands comprise Fairmont, Raffles and Swissôtel.
Lobby of the Fairmont Royal York, Toronto
My biggest worry for the consumer in any such tie-up is:
- That the Fairmont Presidents Club is unique. But it’s hard to imagine over time IHG running their Ambassador program (for Intercontinental), Karma Rewards (for Kimpton), IHG Rewards Club (for the rest of the brands, plus as the points program for Intercontinental), and Presidents Club (for Fairmont). When IHG swallowed Kimpton, I wrote:
“I want to be an IHG Rewards Club Platinum” said no Kimpton elite member, ever.
- IHG Rewards Club doesn’t have a ‘lifetime Platinum’ concept. Several folks took advantage of a Living Social deal that came with Lifetime Platinum status in Fairmont Presidents Club back in 2011 that was surprisingly honored. What happens to those Lifetime Platinums in an IHG Rewards Club future? Do they become IHG Rewards Club Platinums (not top tier)? Do they lose lifetime status altogether?
Lifetime benefits have a mixed history in mergers, although have been riskier when resulting from mergers coming out of bankruptcy.
Nonetheless, a Fairmont acquisition probably wouldn’t mean immediate changes for loyal Fairmont guests, but there’s no universe in which it is a net positive over time other than being able to earn points which can later be redeemed for a broad array of hotels around the world, most of which are of a lesser standard.
On the other hand, for IHG Rewards Club members, there may eventually be the opportunity to redeem points for Fairmont’s excellent portfolio of hotels around the world.
** Three months ago I speculation on **
speculated?
who cares about lifetime Platinums? What is that… Less than 100 people? Relative to the hundreds of thousands of hotel guests and employees a merger would impact… If that’s where your head goes first, you’ve got travel blog tunnel vision
Ummm…it’s a travel blog, mostly about elite status and rewards. Thus the focus.
It is a travel blog after all! I’d be more curious if my points would transfer 1 to 1 into the new program whenever these mergers are talked about.
@STVR
Gary looks and makes assessments with every consumer large group and small and evaluates them all from all angles
I believe that most of us appreciate that and being IMHO amongst the most valued bloggers I’ve personally ever read anywhere.
Back on topic adding Kimpton and Fairmont would be a game changer to me provided elite treatment was exceptional and that’s a huge unknown at this early stage
The new top tier recently introduced at IHG is almost laughable if it weren’t so bad
On the other hand
I would kill to have back the Fairmont in Santa Monica once a stellar Sheraton
It could be enough to drive back much more business to IHG
On the other hand if IHG took over Starwood it would likely kill my business with what’s left of it @ SPG
And yes what would happen to those who have had lifetime tier status!
Its a thought that’s actually depressing watching a once great company go down the toilet with owners such as IHG,Wyndham or even more horrific than my imagination could ever bare being taken over by Accor
Cough cough dial 911 🙁
I’d hate to see this happen. Not taking into account the reward programs, Fairmont staff and service is outstanding. Everywhere. I hate to see the conglomerate IHG destroy that. A much better mix would be Four Seasons and Fairmont become one. Both Toronto based companies, where service is very important and where the Prince has major stakes in both.
@stvr – i could have written about how the fairmont brand fits into the portfolio… how IHG is weak at higher-end properties but that this doesn’t buy them substantial future growth, whether the fairmont portfolio is duplicative of Intercontinental, etc. But my point was from a limited consumer perspective of folks with Fairmont status, and as a subsidiary point those with lifetime status.
The tie-up would make sense for IHG and digesting Fairmont is a lot easier than SPG. Could still fly their flags, as Fairmont and Intercontintental under one roof but 2 brands is doable as they each have a small footprint.
What IHG needed was more serious better tier properties in North America as Crowne Plazas just don’t cut it for many.
With the acquisition of Kimpton and the potential of Fairmont, they will be nicely rounded out here in North America.
In addition, Delta hotels were just linked with Marriott, and although the properties are not on a par with Fairmont, it does show consolidation of the business North of the Border, as well.
Sure, and SPG tie-up would be fine, but it would appear by who broke off the talks, and who puts themselves on the auction block, that it was not IHG that was hot to trot for that tie-up.
As others have said, the lifetime status is of little moment for most when thinking of the tie-up, and after all, they purchased same from a discount consolidator, no less!
Finally, instead of speculating about what might happen to 100 or less folks from Fairmont, some thought should be given to a changed landscape for SPG Platinum members if Accor or Wyndham were to purchase the chain — now, that might affect many more people, and the changes could be far more drastic than those that Kimpton Inner Circle members might fear from IHG!!!
As a Lifetime Fairmont Platinum, I would not be happy unless I received Lifetime Royal Ambassador or a full refund of my Living Social purchase. Ironically, I am currently at a Faifmont enjoying my annual free suite night!
As a Fairmont Plat, I’d be concerned that IHG would merge Fairmont’s call center in their own.
I’m always suspicious of M&A reports originating in the UK, where insider trading is lightly enforced. I’ve seen too many BS stories over the years. But that’s just me and I was fairly certain DOJ would block US/AA merger.