Dec102015

Why I like Accor Hotels Fairmont Hotels purchase

Paris-based Accor Hotels signed a deal to buy FRHI Holdings, the parent company for Fairmont Hotels, Raffles Hotels and Swissotel. There are 115 hotels worldwide in these three luxury hotel brands. Fairmont is the dominant brand in North America and will become the leading face for the Accor Hotels chain in the USA and Canada.

The Accor deal is $840 million cash and nearly 47 million Accor shares worth about $2.1 billion. FRHI Holdings are owned by Qatar and Saudi Arabia funds and Oxford Properties, owned by the Ontario Municipal Employees Retirement System.

AccorHotels buys Fairmont

Accor Hotels press release Dec 9, 2015

Accor Hotels Brands Profile

Accor Hotels are a great chain if you travel around Europe and don’t travel much around the USA. They have a big global footprint of more than 2,400 hotels in the Upscale hotel market segment with Mercure (750 hotels) and Novotel (400 hotels) and in the Midscale hotel market with Ibis (1,000 hotels) and Ibis Styles (200+ hotels).

Upper Upscale brands of Pullman and M Gallery add another 150 hotels.

Sofitel is the only true luxury brand for Accor Hotels with a small 120 hotels global footprint. The acquisition of Fairmont, Raffles and Swissotel, all three brands operating in the luxury room rate segment, doubles the size of properties in Accor Hotels luxury brands profile.

Accor Hotels brands

Accor Hotels brands and hotel market segment.

Accor Hotels geographic map

AccorHotels in 94 countries with 3,792 hotels.

This deal will increase the footprint of Accor Hotels in North America.

Accor Hotels North America

USA and Canada only had 16 Accor hotels. The addition of Fairmont adds 42 more hotels and there is one Swissotel in Chicago.

Accor Hotels brands. This link gives current brand descriptions for Accor Hotels. Here is a Loyalty traveler piece from January 2014 giving the Accor Hotels USA website brand descriptions.

[Note: As I write this piece, the Accor Hotels websites are down.]

Le Club Accorhotels is the biggest global hotel loyalty program I ignore.

Accor Hotels offer some good deals in Asia, Africa, South America and the Middle East with their 3,700 hotels. Accor Hotels are the main hotel chain in France and a large part of their hotel chain are budget/economy hotels in France. Le Club Accorhotels hotel loyalty program excludes more than 1,000 hotels in the in the economy brands segment of the Accor chain from earning and burning points.

This deal could be a game changer for Le Club Accorhotels in the USA for making inroads to American loyalty. The problem with Accor Hotels is there are so few hotels located in the USA, currently only eight hotels. Canada has another eight Accor hotels. The addition of 43 luxury market segment hotels in North America with Fairmont and Swissotel and a global network of lower market segment hotels may make Accor Hotels a better value for US travelers.

Le Club Accorhotels operates as a revenue-based loyalty program. Points are earned based on the hotel rate paid and redeemed points have a fixed rebate value.

The redemption side of Le Club Accorhotels is members exchange 2,000 points for a 40EUR voucher to be used on paid hotel stays. The only real way to leverage more value out of Le Club Accorhotels is to stay at hotels offering bonus points. There are usually numerous hotel offers for double, triple and 4x points for stays. Hotel stays earn points at the normal rate of about 5% to 8.5% rebate on spend, depending on your elite status.

Why I like Accor Hotels Fairmont Hotels purchase

This hotel brand acquisition news is probably not good in the long term for Fairmont President’s Club members. There are some good value benefits in that program for loyal members. Still, I like the idea of being able to open up my lodging options to Accor Hotels in Europe and elsewhere, with the potential benefit of redeeming Le Club Accorhotels points for discount rates at hotels like Fairmont San Francisco Nob Hill and the lovely historic Fairmont hotels in Canada.

This acquisition deal opens the door for good promotions from Le Club Accorhotels in 2016 as a way to attract North Americans into their hotel loyalty program.

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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Comments

  1. fairmont points acquired thru chase credit card are currently worth no more than 1 cents each. If you use them at accord, they will be worth > 2 cents. That’s progress.

    As long as the chase fairmont program integrates as is with the accor program, i think there is nothing to lose..

  2. 43 hotel properties in the USA isn’t going to elicit a lot of interest or brand recognition for US customers. Accor has a lot more work to do to get real penetration in the US market.

    The “luxury” Fairmont hotels in the USA are also not exactly at the upper rung of the luxury heap, either.

    I understand why Accor purchased FRHI, and I think it is a good move for Accor. That being said, I sincerely doubt that this gets Accor the N American brand recognition or increased market penetration it wants.

  3. Not sure when a merger has ever been good for loyalty program members (maybe the subject of a future blog post?)…you may be in a fairly small club, Ric!

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