Accor seems to be on a buying spree. After acquiring Fairmont, Raffles and Swissotel earlier this year, they essentially purchased 5% of Singapore based Banyan Tree with an option to up it to 10%.
Banyan Tree will utilize the Accor distribution channel as well as its Le Club AccorHotels loyalty program.
Here’s the press release from Accor:
Banyan Tree Holdings today announces that it has entered into a heads of agreement with AccorHotels. Under a long-term partnership, both parties intend to collaborate to develop and manage Banyan Tree branded hotels around the world. Banyan Tree will also have access to AccorHotels’ global reservations and sales network, as well as its loyalty programme Le Club AccorHotels.
AccorHotels will invest an initial SGD 24 million (c. €16 million) in Singapore-based Banyan Tree and both parties will then co-develop the brands owned by Banyan Tree around the world. This investment will be made through a mandatory convertible debenture that at conversion will give AccorHotels an approximately 5% stake in Banyan Tree. AccorHotels has an option to purchase an additional approximately 5% stake.
Ho Kwon Ping, Executive Chairman of Banyan Tree, said: “This agreement is not only transformational for Banyan Tree, but is also an innovation for the global hospitality industry. With the current consolidation of mega hotel companies, smaller but also global players – many family-controlled – are also seeking strategic alliances with the global giants. Our strategic alliance with AccorHotels allows us to remain an independent company, enabling us to continue securing hotel management agreements on our own and yet accelerating Banyan Tree’s speed and scope of expansion but with AccorHotels helping us to grow our brands around the world. We believe this agreement will propel our brands rapidly to global reach and range and strengthen our ability to embrace change and innovation in the hospitality industry with a strong global partner. We are excited and committed to this partnership.”
Sebastien Bazin, CEO and Chairman of AccorHotels, said: “Our collaboration with Banyan Tree is a great opportunity to complement our business proposition to owners with iconic brands, while always better servicing our guests. Banyan Tree Holdings has created key leading positions across Asia with luxury resorts, one of the fastest growing segments in the industry. We will bring scale to the network through our ability to develop and manage hotels under the Banyan Tree brands globally, hence strengthening our leadership in the luxury hotel space. We are confident that our investment will create incremental value for our shareholders.”
It will be interesting to see how long it takes for Le Club AccorHotels members to earn and burn points at Banyan Tree locations and whether some elite benefits are extended. Seems that Banyan Tree hasn’t had a guest loyalty program for those staying at its hotels.
Hotel space has started to consolidate and smaller chains are being bought up or they are partnering with bigger players. Let’s hope that they don’t lose their distinctive culture in the progress.