As the curtains draw on 2023, the hotel industry stands witness to a year of transformative shifts and strategic manoeuvres. In this comprehensive roundup, we delve into the significant deals that have shaped the hospitality landscape, exploring the motivations and implications behind each move.
IHG's expansion in Saudi Arabia with Holiday Inn Express
April witnessed IHG Hotels and Resorts making strategic strides in Saudi Arabia by entering a management agreement to launch its largest brand, Holiday Inn Express, in Riyadh.
The move, in line with Saudi Vision 2030, is set to open new avenues for IHG in the central Olaya district. This expansion not only bolstered IHG's mainstream offering but also aligns with the broader strategy to contribute to the flourishing tourism landscape in Saudi Arabia.
Mohari Hospitality's acquisition of Tao Group Hospitality
Mohari Hospitality solidified its position in the luxury lifestyle and hospitality sector with the acquisition of Tao Group Hospitality for $550m.
This strategic investment, finalised in May, not only expanded Mohari's extensive portfolio but also positioned the company for accelerated growth. The addition of Tao Group's globally recognised brands, including TAO and Hakkasan, enhances Mohari's presence in leading hospitality destinations, ensuring a synergistic alignment under the joint leadership of co-CEOs Noah Tepperberg and Jason Strauss.
Marriott's exclusive partnership with MGM Resorts
July brought forth a long-term strategic licensing agreement between Marriott International and MGM Resorts International.
The collaboration gave birth to the MGM Collection with Marriott Bonvoy, offering an exclusive resort program. The 17 MGM resorts, featuring over 40,000 rooms, present a unique opportunity for Marriott Bonvoy members to explore and book through Marriott and MGM Resorts digital platforms.
Additionally, Marriott's foray into the online gaming and sports betting realm through a loyalty marketing deal with BetMGM signalled the hotel giant's adaptability to evolving consumer preferences.
Qatar Investment Authority's acquisition of Park Lane Hotel
The Qatar Investment Authority (QIA) made headlines with its acquisition of the Park Lane Hotel in New York for $623m.
The significance lies not only in the scale of the investment but also in the historical context of the property. Formerly entangled in the 1Malaysia Development Berhad scandal, the acquisition represents QIA's strategic manoeuvring in expanding its global real estate portfolio and making a statement in the competitive New York market.
Saudi Arabia’s PIF invests in Rocco Forte Hotels
December brought forth a momentous collaboration as Saudi Arabia’s Public Investment Fund (PIF) acquired a 49% stake in Rocco Forte Hotels.
The group of 14 hotels in Europe was reported to be valued at £1.2bn ($1.30bn) and including the debt, the enterprise value stood at £1.4bn.
This investment is poised to play a pivotal role in Rocco Forte Hotels' ambitious growth plans, aiming to double its size in the next five years. The partnership not only reflects the confidence of PIF in Rocco Forte's brand but also sets the stage for significant expansions in the Middle East, Italy, and the US.
Choice Hotels and Wyndham saga unfolds
Throughout the year, the potential merger between Choice Hotels International and Wyndham Hotels & Resorts created waves of anticipation.
The saga, marked by multiple proposals and rejections, sheds light on the complexities of deal-making in the midst of economic uncertainties.
The prolonged negotiations underscore the careful considerations and concerns of both parties, reflecting the broader industry's cautious approach amidst concerns about high inflation and the possibility of a recession impacting consumer spending on travel.
Wyndham rejected Choice’s latest offer in December, with the major concerns highlighted by the Wyndham board being: regulatory risks and uncertain outcome, antitrust risks and business disruption, and Inadequate valuation and growth potential.
