Marriott’s CEO rejects IHG takeover reports

Marriott’s global President and CEO, Arne Sorenson, has rejected suggestions his company is making a play at InterContinental Hotels Group (IHG).

Speaking on the CEOs panel at the 34th Annual New York University International Hospitality Industry Investment Conference yesterday (June 4 local time), Sorenson was quite blunt when asked about the possibility of the IHG takeover by panel moderator, NYU’s Laila Rach.

“I didn’t see it,” Sorenson said when Rach brought up a story regarding the merger. “How much are we paying?”

Last week, major financial news outlets, particularly in the UK, were widely reporting that IHG was a takeover target and Marriott was the most likely purchaser of the world’s largest hotel chain by number of rooms.

News outlets were reporting a buy note for IHG shares by Numis Securties’ analyst Wyn Ellis, who said he believed consolidation in the hotel industry was “inevitable at some stage” and “InterContinental, trading at an apparently perpetual discount to its US peers, looks like a possible consolidatee”.

He suggested there were “a number of possible consolidators” and “we consider Marriott the most likely”.

The Marriott CEO deflected further talk of a takeover, by discussing his company’s USD$250 million purchase last week of Gaylord Entertainment Company’s hotel brand and management company.

The acquisition will see Marriott add four hotels and approximately 7,800 rooms to its United States-portfolio, one that Sorenson said would create a number of opportunities.

“We are excited to add Gaylord Hotels to our brand portfolio and are thrilled Gaylord Entertainment selected us to manage their properties,” he said. “We have long been impressed with the hotels Gaylord has created, as well as their skill in hosting major meetings and events and attracting the family leisure market.

“This is a tremendous opportunity to advance growth and opportunity for both Marriott International and the Gaylord hotel brand,” he said.

Sorenson’s comments were the highlight of what was a quiet first day at the NYU conference. While last year’s CEO panel was firmly focused on performance, operational outlook and strong RevPAR gains, this year has been clearly overshadowed by financial uncertainty coming out of Europe.

The panel – which also included Wyndham’s President and CEO, Eric Danziger; Hyatt’s President and CEO, Mark Hoplamazian; and Jumeirah’s Executive Chairman Gerald Lawless – was focused on branding and opportunities around the globe.

Hoplamazian said his company was committed to the continued roll-out of Hyatt’s hip Andaz brand.

“That’s what we are focused on,” he said, adding the company has eight hotels in operation and a further eight in the pipeline.

Sorenson said Edition, in conjunction with celebrated boutique hotelier Ian Schrager, remained a priority for Marriott; while Lawless confirmed Jumeirah was looking at a prototype room in Dubai for its brand-in-the-waiting, Venue.

After the CEOs panel, Danziger was part of a special media ‘coffee talk’ session where he discussed the ongoing financial uncertainty in Europe.

“Each dog has its day,” he said, “And obviously today we have a European crisis and a few years ago it was a significant United States crisis.

“We are in 65 countries and you can’t do anything to try and eliminate it [the crisis], but all you can do is mitigate it and perform better elsewhere.

“But when the European crisis passes, it will be something else,” Danziger said.

Earlier in the day, Conference Chair and Chairman of Loews Hotels, Jonathan Tisch, used his opening remarks to encourage the United States travel industry to take on the challenge of improving the nation’s aging infrastructure.

“Let’s help find the solutions to an infrastructure problem that is too big and too complex for either government or industry to solve on their own,” he said.

“We’re deluding ourselves if we think our industry can thrive if we don’t fix this problem.”

This year’s New York University International Hospitality Industry Investment Conference has attracted 2,200 delegates from across the globe.

Source: Hotel Management, 5 June 2012