After Starwood deal, more hospitality mergers likely
Short-term rentals, online bookings cutting into profits
November 17, 2015 05:15PM
From the New York website: The forces that led to Marriott International’s $12.2 billion purchase of Starwood Hotels & Resorts this week – pressure from online booking sites and short-term rental services like Airbnb – are likely to lead to more hospitality mergers in the near future, according to industry experts.
“The reality is that all these groups need to become bigger and stronger to be able to fight against the newcomers,” said Andre Juillard, an analyst at Kepler Cheuvreux SA.
“We’ve been expecting consolidation for a while,” Juillard told Bloomberg. “We can see more deals coming to market.”
The Marriott-Starwood deal followed the purchase of Strategic Hotels and Resorts, owner of Essex House at 160 Central Park South, by the Blackstone Group in September for just under $6 billion, including debt.
“The scale of this merger was done to fight the OTAs — the online travel agents — and also the potential threat of Airbnb,” Barry Sternlicht, Starwood Hotels’ founder, told Bloomberg.
Companies in that space are consolidating as well, with Expedia, the online travel site, buying Airbnb-competitor HomeAway earlier this month in a deal worth $3.9 billion. [Bloomberg] – Ariel Stulberg
Source: The Real Deal