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Accor buys FRHI Holdings (Fairmont, Raffles and Swissôtel)

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Old Dec 12, 2015, 4:13 am
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Last edit by: starflyergold
What we know:

On 9 December 2015 Accorhotels announced an agreement with the Qatar Investment Authority (QIA), Kingdom Holding Company (KHC) of Saudi Arabia and Oxford Properties, an Ontario Municipal Employees Retirement System (OMERS) company for the acquisition of FRHI Holdings Ltd (FRHI), parent of Fairmont, Raffles, and Swissôtel. Accorhotels will be paying $840 million in cash and by issuing 46.7 million new shares. As part of the transaction, QIA will have two seats on Accor’s board while KHC will take another.

FRHI?
FRHI is the holding company for the Fairmont, Raffles, and Swissôtel brands. FRHI is a management company and the portfolio is almost exclusively on long-term management contracts; i.e. this does not include the brick and mortar in most cases but long term leases of the hotels concerned. 155 hotels are included in the deal and 40 developments which equates to 56,000 rooms in total.

Fairmont
Fairmont Hotels & Resorts is a Canadian-based operator of hotels and resorts. Currently, Fairmont operates properties in 19 countries.
Canada: Banff, Calgary, Charlevoix, Edmonton, Jasper, Lake Louise, Mont Tremblant, Montebello, Montreal, Ottawa, Québec City, Toronto, Vancouver (4), Victoria, Whistler, Winnipeg
United States: Berkeley, Boston, Chicago, Dallas, Hawaii, Maui, New York, Newport Beach, Pittsburgh, San Diego, San Francisco (2), San Jose, Santa Monica, Scottsdale, Seattle, Sonoma, Telluride, Washington DC
Asia: Bali, Beijing, Jaipur, Jakarta, Kunshan, Manila, Nanjing, Shanghai, Singapore
Europe: Baku, Barcelona, Hamburg, Kiev, London, Monte Carlo, Montreux, St Andrews
Mexico, Caribbean and Bermuda: Barbados, Hamilton, Riviera Maya, Southampton
Middle East and Africa: Abu Dhabi, Ajman, Cairo (3), Dubai (2), Makkah, Masai Mara, Mount Kenya, Nairobi, Zimbali (2)
In Development: Amman (2015), Austin (2017), Chengdu (2015), Fujairah (2015), Istanbul (2016), Lagos (2016), Moscow (2016), Riyadh (2015), Sharm el Sheikh (2015), Soma Bay (2020), Suzhou (2018), Taiyuan (2016), Zhengzhou (2018).

Fairmont has its own Flyertalk forum. It's current loyalty programme is called President's Club. The programme also covers Raffles and Swissôtel though the latter also operates its own loyalty programme.

Raffles
Raffles was established in 1887 in Singapore and currently comprises 12 luxury hotels with 4 in development.
Asia: Beijing, Hainan, Jakarta, Manila, Phnom Penh, Siem Reap, Singapore,
Europe: Istanbul, Paris,
Middle East and Africa: Dubai, Makkah, Praslin,
In Development: Jeddah (2018), Sharm el-Sheikh (2019), Shenzhen (2019), Warsaw (2017)

Swissôtel
Swissôtel was founded in 1980 as a joint venture between Swissair and Nestlé and currently includes 37 properties in 17 countries.
Australia: Sydney
Asia: Beijing, Foshan, Kunshan, Shanghai, Kolkata, Osaka, Singapore (2), Bangkok (2), Phuket
Europe: Tallinn, Berlin, Bremen, Dresden, Düsseldorf-Neuss, Amsterdam, Moscow, Sochi, Basel, Geneva (2), Zurich, Ankara, Bodrum (2), Istanbul (2), Izmir
Latin America: Quito, Lima,
United States: Chicago
Middle East: Makkah
In Development: Dhaka (2017), Sofia (2018), Changsha (2016), Chengdu (2016), Hangzhou (2019), Jinan (2020), Guayaquil (2017), Cairo (2020), Sharm el Sheikh (2016), Bali (2017), Jeddah (2017), Dubai (2018).

Swissôtel operates its own loyalty programme called Swissôtel Circle. This and Swissôtel hotels are currently being discussed in the Other Hotel Chains forum.

What happens next?
On 26 April 2016 Accor announced that it has received antitrust clearance for the purchase in relevant jurisdictions. The next step with be an extraordinary shareholders meeting (to be held on the 12th July 2016) to approve the capital increase and proposed board composition.

The deal closed on 12 July 2016. Nothing from a loyalty perspective will change immediately and the respective programmes and hotels will continue to operate as before.

FRHI inventory was loaded onto the Accor system on 12 July 2016, however none of the hotels will earn any points or can be used to redeem them. At the shareholder meeting Accor seemed to indicate that it will take 18 months for the loyalty aspects to be sorted. However it was clear that Le Club will be the future loyalty programme for all hotels.

Loyalty Integration
As of 2 July 2018 the Fairmont President's Club will cease to exist (the same goes for the Swissotel Circle). Both programmes will be folded into Le Club Accorhotels.

What does this mean for Le Club members? You will be able to earn and redeem points, and receive status related perks at all former FRHI hotels. This includes: early/late check in, welcome drink, upgrade (subject to availability), welcome amenity, free wifi. Lounge access for Platinum members will apply to Swissotel (where available) but does not include the Fairmont Gold Service (unless of course booked, including with points). Any stays at former FRHI hotels from January will contribute to your "night count" but no points will be accrued until 2 July.

What does this mean to FPC members? Members will be transferred into Le Club in July. Platinum members will become Le Club Platinum members, Premier will be Silver, Club will be standard members. The "nights stayed" count will transfer to Le Club in July and contribute to status in Le Club. However points will only accrue from July. Suite certificates can be used up beyond July.
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Accor buys FRHI Holdings (Fairmont, Raffles and Swissôtel)

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Old Oct 20, 2016, 10:33 am
  #181  
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Originally Posted by starflyergold

Indeed. If this is Accor's reaction to the competition it is laughable. I also get the feeling that there is reluctance somewhere in the Accor/FRHI system to the merger, at least the loyalty part, which would be of course crazy.

At the moment I have zero incentive to stay at a FRHI hotel but now their members are competing with me when it comes to upgrades etc at Sofitel/Pullman. Who in their right mind thought this would make sense?
I agree, I'm somewhat surprised about this move as well. But it just shows how difficult the merger of the loyalty programs will be since the Accor program and the FPC program couldn't be more different:

1) Accor basically is a rebate program; unlike other loyalty programs Accor points have a fixed value. FPC free night certs are the exact opposite: valid at any Fairmont (with very few restrictions)

2) similar to many other hotel programs, Accor offers an "upgrade based on availability at check-in" while FPC offers a certain number of room and suite upgrades confirmed at time of booking

From a business perspective I'd argue that:

1. matching Accor Plat members to FPC Plat would not work since they'd all receive a free night in a suite (plus other benefits) without generating any revenue for FRHI. Giving Accor Plat members FPC Premier status may've worked. Ideally Accor would find a way to incentivize Accor members who primarly stay at the higher-end Accor properties to try out Fairmont properties, but that's obviously more challenging.

2. even something as simple as allowing members from both programs to earn stay credit at all properties wouldn't work since FPC Plat members would then earn an additional free night cert valid at any Fairmont for completing 10 nights at any cheap Accor hotel. This could potentially work if Accor excluded all the lower-end brands, but still a bit of a mess.

---------

For those people who'd like to know more about the room upgrade certs, here are the basics:

1. FPC room upgrade certs are valid at Fairmont properties only
2. room upgrade certs entitle you to an upgrade to the next room category, upgrade can be confirmed anytime in advance (e.g. at booking) and a cert is valid for a stay of up to 5 nights
3. room upgrade certs can be combined with almost any rate incl. corporate rates, promo rates, even free night certs (notable exception is the monthly "Great Dates Great Rates" promo rate)
4. Fairmont properties (especially those outside NA) generally have fewer room categories than other hotel chains, so a room upgrade can easily be worth $50-$100/night, so I wouldn't completely dismiss the certs as useless
5. upgrade certs can be stacked with the "space available upgrade" offered by Virtuoso / AMEX FHR / Travel Leaders Select, which can make for a nice two-category upgrade (in addition to the daily free breakfast and ~$100 amenity per stay). A list of Fairmont properties affiliated with the three programs can be found here:
https://www.flyertalk.com/forum/fair...roperties.html (and unlike with Sofitel, the majority of Fairmont properties is affiliated with one of the three programs)
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Old Oct 20, 2016, 10:37 am
  #182  
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Originally Posted by Goldorak
Sorry for this naive question, but I know nothing about the programs of FIRH hotels : is Raffles a separate program (I mean, can we use those Fairmont upgrades certificates in Raffles hotels) ?
Raffles, Fairmont and Swissotel each have their own loyalty program with very different benefits. There are a few (very limited) cross-brand benefits and you receive stay credit in each program for stays at any of the three brands, but that's about it.

Therefore, FPC upgrade (and free night) certificates can only be used at Fairmont properties.
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Old Oct 20, 2016, 10:39 am
  #183  
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Originally Posted by Jasper2009
matching Accor Plat members to FPC Plat would not work since they'd all receive a free night in a suite (plus other benefits) without generating any revenue for FRHI.
Correct me if I'm wrong, but FHRI no longer exists. All the revenue goes to Accor now. And most Accor Platinum members do give a lot of revenue to Accor. So it's not exactly a bad thing to give those high revenue customers a free night in a suite.
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Old Oct 20, 2016, 10:40 am
  #184  
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Originally Posted by Jasper2009
1. matching Accor Plat members to FPC Plat would not work since they'd all receive a free night in a suite (plus other benefits) without generating any revenue for FRHI.
With all due respect but we have generated plenty of revenue for Accor (FRHI is gone now). Granting status would have allowed us to generate more revenue at an ex-FRHI hotel. Now I have no intention to generate anything.
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Old Oct 20, 2016, 10:44 am
  #185  
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Originally Posted by starflyergold
With all due respect but we have generated plenty of revenue for Accor (FRHI is gone now). Granting status would have allowed us to generate more revenue at an ex-FRHI hotel. Now I have no intention to generate anything.
Sorry, didn't mean to offend anyone. Let me re-phrase: Accor doesn't seem to have any intention to just give away a free night in a suite at one of their higher-end properties (easily worth >$1000) to thousands of Accor Plat members.

And since Accor isn't exactly known to be the most generous program, I'm not surprised.

IMO a good solution would've been to give Accor Plat members FPC Premier status: A 3rd night free cert (valid on almost any rate) combined with a suite upgrade confirmed at time of booking should be a decent incentive to try a Fairmont property.

Last edited by Jasper2009; Oct 20, 2016 at 11:01 am
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Old Oct 20, 2016, 12:27 pm
  #186  
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What a joke overall
I was looking for booking the Sofitel Phnom Penh next winter but of course no room available with the current 30% promo , and for whatever reason this hotel seems to have doubled their price in february compared to last year same period. The Raffles (another very nice hotel) was cheaper but, as I have 0 incentive to stay there, it will be a non-Accor stay for the 1st time in 6 years

Originally Posted by Jasper2009
Raffles, Fairmont and Swissotel each have their own loyalty program with very different benefits. There are a few (very limited) cross-brand benefits and you receive stay credit in each program for stays at any of the three brands, but that's about it.

Therefore, FPC upgrade (and free night) certificates can only be used at Fairmont properties.
Thank you for those explanations.
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Old Oct 20, 2016, 10:24 pm
  #187  
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Quite annoying

I have read both forums about the matching and the offer for free certs.

I think Accor will be mad to allow 4 separate loyalty programs to run in the long term.

Yes its good for the company to allow FRHI members get status in Accor.
But of course there are only 3 million or so members.
Accor has what 30 million? As many Accor members said their is almost zero incentive to stay at FRHI with this offer.

So there is no way I can see these loyalty programs staying separate in say 2 years time. I have to say as an Australian saying "Tell him he's dreaming".

Now I find some members of FRHI quite insulting. I spend a good 3000-4000 Euros a year at Accor and that usually gets me not by that much over the line to qualify for platinum yearly.

To qualify for platinum at FHRI you need to have 10 stays a year. Which you could game it so your only usually staying an average of 2 nights each stay maybe even a single night.

I have stayed at the Sofitel Chengdu (By far not expensive in the world of Sofitels) and compared it to the up coming brand new Chengdu Fairmont opening in February. Full rate rooms at the fairmont were coming up around 1000-1200 rmb per night.

So depending if you stayed for 1-2 night on average like I usually do. That would only mean at most about 3200 euros being spent. (Remember compared oranges to oranges)

Now consider that next year the qualification for platinum will be 5600 Euros min spending.

How can anyone claim superiority of FHRI in the amount of spending they do in comparison to say what I spend. (I spent 2000 rmb per night for their Opera suite 70-80m squared early this year).

The US is obviously quite expensive place to stay and hence even Sofitel in NY is far from cheap.

And if anyone insists on that they stay at the more expensive fairmonts then try doing 10 stays at the Sofitel London/Paris or Amsterdam without promotion they cost an arm and a leg too.

The 2-3 Landmark properties in FRHI that people might like to claim.. hey this costs much more. Really?? I bet most members spend less than 5% of their total nights in these particular hotels. And I would guess quite a few free nights and upgrades are used at these few properties as its something I would do....
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Old Oct 20, 2016, 10:34 pm
  #188  
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In my case, Fairmonts are the corporate hotel in all cities where these properties are located. I have not stayed in any of them and paid the same for Pullmans/Sofitel in those cities.
(one main property that affects me is the fairmont in Jakarta. 5min walk to our office. I pay the same rate in the Pullman for a suite and prefer that to the fairmont. So does that mean I'm lesser of a member for the Accor group?)

Go figure.
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Old Oct 21, 2016, 12:29 am
  #189  
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Originally Posted by Jaunt411
As a Swissotel Eleva member, just got an email inviting me to join Gold LeCA ...

"On July 12th, 2016, Swissôtel Hotels & Resorts officially joined AccorHotels. As a valued Elevà member of Swissôtel Circle, we’re delighted to invite you to enjoy Gold Le Club AccorHotels’ membership, an elite tier within AccorHotels’ loyalty programme. Join today to enjoy Gold status and gain access to exclusive benefits and privileges at over 3400 participating hotels and resorts worldwide including brands such as Sofitel, Novotel, Mercure and Ibis."
I'm a Eleva status member and didn't receive this Is there anyway to upgrade an exisiting Le Club account or you have to create a new account?
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Old Oct 21, 2016, 12:49 am
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Originally Posted by sxc
I'm a Eleva status member and didn't receive this Is there anyway to upgrade an exisiting Le Club account or you have to create a new account?
Good question.

I have an old LeCA account (which I'd abandoned due to my frustrations with the way that program is administered), and when I followed the link I couldn't create a new Gold level account with my main email address. I just ended up with my old Classic level account.
So, I gave up. If it ends up a choice between LeCA or nothing, it'll be nothing for me.

Why you didn't get the offer email, I wouldn't know. I have been Swissotel Eleva for about 2 years.
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Old Oct 21, 2016, 1:24 am
  #191  
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Originally Posted by gilbertaue
So does that mean I'm lesser of a member for the Accor group?)
Yes it does. It's funny, we all have spent considerable amounts of money at Accor hotels over the years and now we are somehow considered inferior to folks who stay a couple of nights at a Fairmont?

I can get points from partner hotels which do not even belong to the Accor group but I can't get a single reward from staying at a la de da Raffles/Fairmont? (the less that is said about Swissotel the better). Who comes up with this?
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Old Oct 21, 2016, 1:52 am
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Originally Posted by starflyergold
Yes it does. It's funny, we all have spent considerable amounts of money at Accor hotels over the years and now we are somehow considered inferior to folks who stay a couple of nights at a Fairmont?

I can get points from partner hotels which do not even belong to the Accor group but I can't get a single reward from staying at a la de da Raffles/Fairmont? (the less that is said about Swissotel the better). Who comes up with this?
We do have those two upgrade certs, don't we? Which according to some FPC members are worth quite a lot, be glad they even offered us. We plebeians better grab them before they're gone.

Even the Swissotel whatever program is too good for LCAH Plats.

Last edited by RJ77; Oct 21, 2016 at 2:09 am
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Old Oct 21, 2016, 2:08 am
  #193  
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Originally Posted by RJ77
We do have those two upgrade certs, don't we? Which according to some FPC members are worth quite a lot, be glad they even offered us. We plebeians better grab them before they're gone.
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Old Oct 21, 2016, 5:25 am
  #194  
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Originally Posted by RJ77
We do have those two upgrade certs, don't we? Which according to some FPC members are worth quite a lot, be glad they even offered us. We plebeians better grab them before they're gone.
I guess you're referring to my post? I was just trying to be helpful by pointing out the FPC room upgrade certs may be more useful than some people may assume and explaining how those certs worked.

Originally Posted by starflyergold
I can get points from partner hotels which do not even belong to the Accor group but I can't get a single reward from staying at a la de da Raffles/Fairmont? (the less that is said about Swissotel the better). Who comes up with this?
Agreed, the current approach doesn't seem to provide sufficient incentive for most Accor members to try out Fairmont properties.

IMO a more successful approach would've been to:

1. allow Accor members to earn points / get stay credit for Fairmont stays and/or
2. offer Accor Plat members a space-available upgrade at time of check-in at time of check-in and/or
3. offer FPC Premier status to (select) Accor Plat members
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Old Oct 21, 2016, 9:50 am
  #195  
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Originally Posted by Jasper2009
3. offer FPC Premier status to (select) Accor Plat members
This is what I don't get. Why only just Premier status??

In what world is 10 stays at Fairmont properties to earn Plat more of a worthy expense than 60 nights at Accor properties?

I will sit down this weekend and calculate how much I spent this year at Accor properties. Would be nice to know what percentage of FPC Platinum members spend a similar amount.
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