NH Hotel Group Lands $3B Merger Bid
- Nov 28, 2017
The competition between Spanish lodging companies Barceló Hotel Group and NH Hotel Group may soon come to an end. Barceló has extended an offer to acquire NH Hotel and its 400 properties across Europe, the Americas and Africa for a reported $3 billion.
The companies aren’t saying a great deal about the potential merger, but Mallorca-based Barceló did concede in a statement that it is “expressing interest” in such an agreement.
Should NH Hotel, headquartered in Madrid, accept the proposal, the unification of the two international companies would result in a hotel giant boasting an approximately 630-property portfolio totaling 110,000 guestrooms spanning more than 20 countries. However, the collection would remain heavily weighted toward Spain, as Barceló is the third largest hotel chain in Spain.
As noted in a press release from hospitality information provider TopHotelProjects, “This is all significant for the hospitality industry because right now the tourism sector in Spain is booming with few signs of a slow down on the horizon.” Tourist arrivals in the first half of 2017 reached 36.3 million, marking a year-over-year increase of 12 percent, according to a report by commercial real estate services firm CBRE. One country’s loss is another country’s gain; Spain’s increased popularity can be partially attributed to security concerns in competing leisure destinations, per the report.
Hotel mergers and acquisitions have been rampant over the last few years and 2017 has proved no exception. This year’s long list of transactions includes Aspen Skiing Co.’s acquisition of Intrawest Resorts Holdings in a deal valued at $1.5 billion, and RLJ Lodging Trust’s merger with FelCor Lodging Trust in a $1.2 billion all-stock transaction. Best Western Hotels & Resorts purchased Sweden Hotels.
Consolidation within the hotel industry is alive and well, and in the U.S., the trend is expected to continue for the foreseeable future. According to a recent lodging report by Fitch Ratings, the increasing power of the country’s largest hotel brands is changing the industry’s competitive landscape in the country, which will likely continue to spur further consolidation.
Image courtesy of NH Hotel