Originally Posted by
CanadaDH
Wouldn't that be most of their properties? I didn't think that Fairmont owned very many of the properties at all they manage today, unlike in the days before CP Hotels bought Fairmont. And if the current owners of the individual properties are free to change management companies (and I assume they are, subject to some exit clause in their contract), I don't imagine very many of them wanting their high profile properties associated with IHG.
Indeed, almost all Fairmont properties are owned by pension funds, investment funds, wealth funds or individuals. I know that some properties have long-term management agreements with Fairmont (50+ years in some cases), and while there probably is an exit clause in their contracts, I'm not sure how easy it would be for some properties to terminate the contract.
Originally Posted by
CanadaDH
I'm trying to picture the "Holiday Inn Chateau Frontenac", or the "Crown Plaza Banff Springs", or "The Savoy, an IHG managed hotel"--really? I can't imagine any of the property owners degrading their iconic properties like that.
I'll blame you if I get nightmares tonight.
Originally Posted by
CanadaDH
I only see a merger working if it's with a chain of a similar perceived quality. I could see IHG buying the chain and continuing to operate it as is, possibly finding some head office synergies, and with no changes to the branding or mixing of the customer facing aspects, but a merger of the brands would be a real value killer--for the owners of the chain, the owners of the properties, and for their guests. I just don't see them as the most synergistic buyer out there, and if I was the current owners of Fairmont looking to sell, I'd be waiting until someone with a more upscale chain was interested, as they should theoretically be able to offer a higher price, since they would be able to integrate the chain to gain synergies without killing the brand equity.
I really hope there's nho truth to this. If it does happen, they need to keep them separate.
I fully agree. A few of the city center properties (such as the Fairmont Chicago, Dallas or Pittsburgh) would fit well into the IC portfolio IMO, but the vast majority of Fairmont properties are landmark / historical buildings. I could see some of the properties joining the SPG Luxury Collection or becoming a Park Hyatt (at least from a service / branding perspective), but IHG seems like a terrible option.
I'd agree, the least bad option would be to keep the Fairmont branding (along with its separate loyalty program, management and customer service), but I doubt that would happen in the long-run.