Review of the year: Top five hotel deals of 2016
One mega-deal dominated the hotel market in 2016, that of Marriott International's acquisition of Starwood Hotels & Resorts to create a 6,000 strong hotel group. Though Accor was busy too, acquiring FRHI Holdings, the parent company of 1hotels including the Fairmont, Raffles and Swissôtel brands. Read on for our top five deals of the year.
1. Marriott completes acquisition of Starwood
Marriott International's £9.5b acquisition of Starwood Hotels & Resorts to create the world's largest hotel company completed in September.
It took more than 10 months for the deal to be completed after Chinese-based Anbang Insurance Group gatecrashed the negotiations with an alternative offer, resulting in Marriott's original agreed bid of £8b being increased by £1.5b.
The combined force of the two companies, covering more than 4,500 hotels across 19 brands from Marriott and 1,300 properties and 11 brands from Starwood, now has an unprecedented 30 brands and nearly 6,000 hotels.
It remains to be seen whether there will be any consolidation across the portfolio, which now includes the luxury brands of Ritz-Carlton, JW Marriott and St Regis; with Edition and W in the lifestyle segment.
2. AccorHotels shareholders finalise acquisition of FRHI
It's been a busy year for French giant AccorHotels. As well as continuing to grow within the traditional hotel space through the acquisition of FRHI Holdings, the parent company of 155 hotels across the Fairmont, Raffles and Swissôtel brands, it also bought outside its comfort zone and launched a new brand.
The FHRI Holdings deal involved a £554m cash payment and the issuing of 46.7 million shares to a consortium of investors.
Meanwhile, in April, AccorHotels bought luxury home share business Onefinestay for £117m, and two months later said it intended to acquire 80% of global concierge company John Paul for £115m. Earlier this month, it also invested £13.6m for a 5% stake in luxury hotel brand Banyan Tree.
The company also plans to launch Jo&Joe, a new economy brand to appeal to millennials. Fifty sites are expected to open in cities including London, Paris and Rio de Janeiro.
3. London & Regional acquires Atlas Hotels
Property company London & Regional acquired Atlas Hotels from Lone Star in a deal that is believed to have been one of the largest in the UK during 2016. While London & Regional would not confirm what it paid Lone Star for the portfolio of 46 Holiday Inn Express hotels and one Hampton by Hilton in Liverpool, a figure of £575m was widely reported.
The deal marks the company's first foray into the budget sector, having built up a portfolio that includes Chewton Glen in New Milton, Hampshire; Cliveden House in Taplow, Berkshire; Lygon Arms in Broadway, Worcestershire; and the London Hilton on Park Lane.
4. Whitehall's Old War Office to become luxury hotel
The former Old War Office in Whitehall, London, is to be converted into a luxury hotel following the completion of its £350m acquisition from the Ministry of Defence by global investment company the Hinduja Group in a joint venture with Spanish developer OHL Desarrollos.
Built in 1906, the property, which was acquired on a 250-year lease, is set to be transformed into a hotel with extensive function spaces, a spa and fitness facilities, alongside apartments.
The deal is believed to be the largest single hotel transaction of the year, followed closely by the purchase by the Bhatia family of the 583-bedroom DoubleTree by Hilton, next to the Tower of London, for more than £300m, from American private equity company Blackstone.
Blackstone is reducing its investment in the hotel sector. In October it announced it would be selling a 25% stake in Hilton Worldwide for £5.3b to the Chinese HNA Group, cutting back its equity in the global hotel group to 21%.
5. Sale of six Hotel Collection properties
The disposal of the remaining 10 properties within the Hotel Collection portfolio, owned by Lone Star Funds, was kickstarted with the acquisition in August of one of the UK's most iconic seaside hotels, the 152-bedroom Imperial hotel in Torquay, by Andrew Brownsword Hotels.
Lone Star had announced in March its plans to sell the portfolio for a combined total of £130m.
The four remaining Hotel Collection properties to be sold include the Billesley Manor, Stratford-upon-Avon; the Imperial, Blackpool; Shrigley Hall hotel, golf and country club, Macclesfield; and Aberdeen Altens, Aberdeen.
