Three months ago I speculated on what a Starwood-IHG (or Wyndham) merger would look like.
Last week market excitement ratcheted up over an IHG-Starwood combination, although that culminated in word from IHG that talks ended without a deal. (Starwood is still a potential acquisition target for Wyndham and Accor.)
Intercontinental Hotels Group (IHG) is reportedly eyeing a bid for luxury hotel chain Fairmont, according to a report in UK media.
It was reported in June that owners of FRHI Hotels & Resorts, which include a Qatari government fund (Katara Hospitality) and Saudi Prince Alwaleed bin Talal’s Kingdom Holding Company, are looking to sell the luxury operator.
Deutsche Bank and Morgan Stanley were hired to market the Toronto-based company, whose brands comprise Fairmont, Raffles and Swissôtel.
Lobby of the Fairmont Royal York, Toronto
My biggest worry for the consumer in any such tie-up is:
- That the Fairmont Presidents Club is unique. But it’s hard to imagine over time IHG running their Ambassador program (for Intercontinental), Karma Rewards (for Kimpton), IHG Rewards Club (for the rest of the brands, plus as the points program for Intercontinental), and Presidents Club (for Fairmont). When IHG swallowed Kimpton, I wrote:
“I want to be an IHG Rewards Club Platinum” said no Kimpton elite member, ever.
- IHG Rewards Club doesn’t have a ‘lifetime Platinum’ concept. Several folks took advantage of a Living Social deal that came with Lifetime Platinum status in Fairmont Presidents Club back in 2011 that was surprisingly honored. What happens to those Lifetime Platinums in an IHG Rewards Club future? Do they become IHG Rewards Club Platinums (not top tier)? Do they lose lifetime status altogether?
Lifetime benefits have a mixed history in mergers, although have been riskier when resulting from mergers coming out of bankruptcy.
Nonetheless, a Fairmont acquisition probably wouldn’t mean immediate changes for loyal Fairmont guests, but there’s no universe in which it is a net positive over time other than being able to earn points which can later be redeemed for a broad array of hotels around the world, most of which are of a lesser standard.
On the other hand, for IHG Rewards Club members, there may eventually be the opportunity to redeem points for Fairmont’s excellent portfolio of hotels around the world.