Ahead of the holiday season, AccorHotels has announced its initial investment of SG$24 million into Banyan Tree in a partnership which will see both hospitality brands collaborating to develop and manage Banyan Tree’s branded hotels globally. The deal gives AccorHotels a 5% stake in Banyan Tree, with an option to purchase an additional approximate 5% stake.
According to an SGX announcement on the deal, the collaboration will be for an initial term of 10 years subject to extension and earlier termination in accordance with the term sheet. For each co-developed hotel and branded residence, Banyan Tree and Accor will share the management and other fees received through Accor.
Banyan Tree will also have access to AccorHotel’s global reservations and sales network as well as its loyalty programme, Le Club AccorHotels. According to a Banyan Tree spokesperson, both brands are still in discussion with regards to the specifics of the acquisition and the assets involved, set to be finalised in 90 days.
According to Ho Kwon Ping (pictured), executive chairman of Banyan Tree, the strategic alliance will allow the brand to remain an independent company, enabling it to continue to securing hotel management agreements and accelerating its speed and scope of expansion.
“This agreement is not only transformational for Banyan Tree, but is also an innovation for the global hospitality industry. With the current consolidation of mega hotel companies, smaller but also global players – many family-controlled – are also seeking strategic alliances with the global giants,” Ho added.
Sebastien Bazin, CEO and chairman of AccorHotels, said said the collaboration with Banyan Tree is a great opportunity to complement its business proposition to owners with iconic brands, while always better servicing our guests.
“Banyan Tree Holdings has created key leading positions across Asia with luxury resorts, one of the fastest growing segments in the industry. We will bring scale to the network through our ability to develop and manage hotels under the Banyan Tree brands globally, hence strengthening our leadership in the luxury hotel space,” Bazin said.
The move follows a time which sees more hospitality brands consolidating its branding and operational functions. Just last year, Marriott acquired Starwood Hotels and Resorts Worldwide for US$12.2 billion in stocks and cash, creating the world’s largest hotel company.
The transaction combined Starwood’s lifestyle brands and international footprint with Marriott’s strong presence in the luxury and select-service tiers to create a more comprehensive portfolio. The acquisition also combined both brands loyalty programme, consolidating Marriott’s 54 million members with Starwood’s 21 million members.
The hospitality space has indeed seen intense competition with disruptors such as Airbnb changing the space.