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Accor buys FRHI Holdings (Fairmont, Raffles and Swissôtel)

Accor buys FRHI Holdings (Fairmont, Raffles and Swissôtel)

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Old Dec 11, 17, 7:22 pm   -   Wikipost
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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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Old Feb 2, 16, 2:34 am
  #91  
 
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Originally Posted by ZenWorld View Post
At the moment, I will still put Fairmont ahead of Sofitel, so I believe Fairmont should be the top tier brand for Accor.
Although I have to admit that Fairmont is a top and consistent luxury brand, the trend clearly goes towards Sofitel as the "Flagship Brand" of the new group:

Sofitel represents the French elegance coupled with technology and design.
Beside being of French origin, The strategical trend of Accor is clearly there, and you can also see it in the budget brands.

To me, Faimont represents the "old-fashioned luxury" and is not clearly representative of Accor's long term positioning.

Fairmont is the RC of Marriott or WA of Hilton or St Regis of SPG.
But not the flagship !
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Old Feb 2, 16, 7:39 am
  #92  
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Originally Posted by geilux View Post
Although I have to admit that Fairmont is a top and consistent luxury brand, the trend clearly goes towards Sofitel as the "Flagship Brand" of the new group:
I agree completely. And by the numbers there are 120 Sofitel's and 70 Fairmont's. To be fair there are a few Sofitel's that are a bit weak and a few Fairmont's that are very strong. But overall Sofitel's are a higher level than Fairmont.
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Old Feb 2, 16, 10:00 am
  #93  
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Fairmont by Sofitel?
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Old Feb 2, 16, 10:06 am
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Originally Posted by starflyergold View Post
Fairmont by Sofitel?
Would you create Jaguar by Bentley ? Impossible
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Old Feb 2, 16, 1:34 pm
  #95  
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Originally Posted by geilux View Post
To me, Faimont represents the "old-fashioned luxury" and is not clearly representative of Accor's long term positioning.
I fully agree with that. There is definitely a market for that kind of old-fashioned luxury hotel, but the future lies with a more modern design, and Sofitel is clearly better positioned for this.
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Old Feb 2, 16, 1:52 pm
  #96  
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Originally Posted by Goldorak View Post
I fully agree with that. There is definitely a market for that kind of old-fashioned luxury hotel, but the future lies with a more modern design, and Sofitel is clearly better positioned for this.
To be fair there are some newer Fairmont hotels that are very modern. When you think old, you are probably thinking about most of the North American properties. Around much of the rest of the world they are very modern. Dubai is an example.
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Old Feb 2, 16, 2:11 pm
  #97  
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Originally Posted by stimpy View Post
To be fair there are some newer Fairmont hotels that are very modern. When you think old, you are probably thinking about most of the North American properties. Around much of the rest of the world they are very modern. Dubai is an example.
Agreed. Most of the Fairmont hotels outside NA are quite modern, but even in NA Fairmont has a rather diversified portfolio:

1. iconic landmark properties and grand dame hotels
a. such as the Fairmont San Francisco and the Plaza in the US and
b. the various former CP Railway hotels in Canada

2. resort properties (Mexico, Bermuda etc.)

3. many new(er) developments over the last 5-10 years such as the Fairmont Pittsburgh, Fairmont Waterfront Vancouver, Fairmont Pacific Rim - the latter arguably is among the most modern city center hotels in Canada
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Old Feb 2, 16, 2:15 pm
  #98  
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Originally Posted by stimpy View Post
To be fair there are some newer Fairmont hotels that are very modern. When you think old, you are probably thinking about most of the North American properties. Around much of the rest of the world they are very modern. Dubai is an example.
Yes, that's exactly what I was thinking about. But thank you for the precision. I'm not familiar enough with those brands.
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Old Feb 2, 16, 2:53 pm
  #99  
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Originally Posted by stimpy View Post
When you think old, you are probably thinking about most of the North American properties. Around much of the rest of the world they are very modern.
Originally Posted by Jasper2009 View Post
Agreed. Most of the Fairmont hotels outside NA are quite modern[...]
This sounds to me like a good reason to rebrand at least the more modern Fairmonts. I've only experienced a couple of N American Fairmonts and formed an impression of them as rather staid, to put it politely -- definitely not a brand I would seek out if there were a Pullman, Swissôtel or Sofitel nearby.
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Old Feb 2, 16, 3:28 pm
  #100  
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Originally Posted by IMH View Post
This sounds to me like a good reason to rebrand at least the more modern Fairmonts. I've only experienced a couple of N American Fairmonts and formed an impression of them as rather staid, to put it politely -- definitely not a brand I would seek out if there were a Pullman, Swissôtel or Sofitel nearby.
A slight rebrand is a good idea. Like the Sofitel Legend properties, there should be Fairmont Legend properties. The Château Frontenac is a legendary property and it should be reflected in its name.

Le Château Frontenac, a Fairmont Legend hotel.
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Old Feb 2, 16, 5:41 pm
  #101  
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Originally Posted by stimpy View Post
A slight rebrand is a good idea. Like the Sofitel Legend properties, there should be Fairmont Legend properties. The Château Frontenac is a legendary property and it should be reflected in its name.

Le Château Frontenac, a Fairmont Legend hotel.
Sure, but no harm in just calling it Le Château Frontenac, a Sofitel Legend hotel.

Just like the Parklane in HK also kept its name and it's "....a Pullman Hotel".
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Old Feb 2, 16, 5:58 pm
  #102  
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Originally Posted by gilbertaue View Post
Sure, but no harm in just calling it Le Château Frontenac, a Sofitel Legend hotel.

Just like the Parklane in HK also kept its name and it's "....a Pullman Hotel".
True it has been Le Château Frontenac a lot longer than Fairmont has been around. But it depends on how important their existing Canadian Fairmont customers feel about the change. If Accor feels they are OK with losing the Fairmont name, then it will disappear quickly. But let's not forget all the corporate contracts that may have to be updated with the name change. That can take a long time especially if we are talking about the Canadian government!
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Old Feb 2, 16, 6:13 pm
  #103  
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ok, then:

"Le Château Frontenac, a Fairmont Legend hotel, managed by Sofitel" LOL
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Old Feb 2, 16, 7:24 pm
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Originally Posted by stimpy View Post
To be fair there are some newer Fairmont hotels that are very modern. When you think old, you are probably thinking about most of the North American properties. Around much of the rest of the world they are very modern. Dubai is an example.
Couldn't agree more. Fairmont Makkah Clock Royal Tower is another impressive example. Meanwhile, Pullman Zamzam Makkah is on the next tower (ZamZam Tower)

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Old Feb 3, 16, 8:30 am
  #105  
 
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Originally Posted by stimpy View Post
True it has been Le Château Frontenac a lot longer than Fairmont has been around.
This is true - I am not sure Canadians (being one) are that attached to the Fairmont name. The original "old style" luxury hotels were part of Canadian Pacific Railway and were only re-branded as Fairmont back in the 1990s when they were spun out of CP. It's more likely to hear Canadians refer to them by their name (e.g. Chateau Frontenac, the Royal York, Queen Elizaeth etc.) than as "The Fairmont". So, if Accor wanted to re-brand or distribute among current brands - I am not sure it would make much of a difference.

Already there is a difference between the Pacific Rim and one of the un-renovated old-style luxury properties - like the Royal York (just before or during the current renovation) or the Empress.
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