Other chains composed amid new goliath

THE spectre of a new giant in their wake from the Marriott-Starwood merger has not sent other hotel chains trembling in trepidation – or so they say.

Other hotel groups maintain the stance they have a good footing and are unfazed by the merger, despite it creating a portfolio that’s by far larger than theirs and expectations of more consolidation occurring in the months ahead.

When approached, InterContinental Hotels Group (IHG) reiterated the statement made by its Board of Directors on November 6 that it was not considering a potential sale or merger of the company.

Hilton Worldwide also reiterated its position that it was “not involved in that process” and was “not worried”, said president and CEO Chris Nasseta during its 3Q2015 earnings call on October 28.

“The reason we’re not involved in that process and the reason I’m not worried about what happens there is because we feel very good about the setup that we have,” Nasseta said.

“We have an amazing business, an amazing opportunity in front of us, and that’s what we’re focused on, optimising for all of our benefits.”

Also feeling very good about its setup, IHG’s CEO of Asia, Middle East & Africa, Jan Smits, said: “We’re a successful business, we have an established strategy, we have a broad portfolio of brands and a proven track record of delivering growth and delivering shareholder returns.

“This is not a zero-sum game – there are good, organic prospects for all players. We’re used to operating in this context and right now we’re just being focused on delivering our strategy.”

Choe Peng Sum, CEO of Frasers Hospitality, said the merger between Marriott and Starwood would force other chains to re-evaluate their offerings and assess the need to join arms with other players, be it large or small chains, to better equip themselves for an increasingly competitive landscape.

“This is exactly what we at Frasers Hospitality have done with the purchase of Malmaison Hotel du Vin group, two best-in-class hotel brands, which have doubled our offerings in Europe, further strengthening our global expansion plans to achieve our goal of 30,000 units by 2019,” he said.

“Airbnb is here to stay and it would be foolish to ignore the impact they have made on the hospitality industry. It has caused companies to rethink their entire distribution strategy and hotels are now looking to merge with distribution channels to improve their online distribution.

“The entire consumer landscape of instant gratification and technology advancements, as reflected in the emergence of brands like Uber and Airbnb, has kept us on our toes. It has pushed us to enhance our guests’ experience with us, be more efficient in responding to guests’ feedback and is a good reminder that our customers are at the centre of everything we do. This is vital as customers will vote with their feet as their choices abound.”

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