Takeover battle is no concern to the hotel industry
by Leon Gettler
Hotel executives say they’re not losing any sleep over the multi-billion dollar takeover battle for Starwood Hotels & Resorts Worldwide.
In the latest development, Starwood has received a $US14 billion takeover offer from a group led by China’s Anbang Insurance Group. That’s higher than Marriott’s last bid and that will force Marriott to counter a second time to stop the merger that would create the world’s biggest hotel operator.
But Richard Solomons, the chief executive of hotel giant IHG, which controls 5 per cent of the globe’s hotel rooms, says it doesn’t bother him.
“When we look at the landscape I am not worried about Marriott and Starwood getting together and becoming bigger because we have sufficient scale,” Mr Solomons told the Australian.
“If you are a mid-size player it is a little concerning that the big guys are getting bigger, which we are. Starwood had some nice brands, but it was obviously a company that got into trouble. I am not losing sleep over of it.”
Mr Solomons said scale was important in the industry. After all, the five biggest hoteliers - IHG, Starwood, Marriott, Accor and Hilton — control 20 per cent of the world’s hotel rooms. But as he said, the takeover battle does not affect IHG’s plans to expand.
“We have sufficient scale and we have a growing share of supply through that pipeline of signed contracts,” he said.
Indeed, the battle doesn’t even affect Starwood’s plans here, particularly in Adelaide where there are two major hotel developments going on.
Starwood director of acquisitions and development (Pacific region), Andrew Taylor, said it made no difference to the development of an Aloft hotel on Sturt St and the proposed Sheraton hotel on the old Le Cornu site in North Adelaide
“It’s business as usual,” Mr Taylor told the Adelaide Advertiser. “Despite the (bidding) process we would expect our brands to continue to grow. We are certainly looking to bring the two hotels to the Adelaide market as planned. The interest in Starwood Group, through the two suitors, goes to show that the brands are in demand.”
30th March 2016
