Could Accor & IHG Merge, Form World’s Largest Hotel Group?

Filed Under: Accor, IHG Rewards

A few years back we saw a round of hotel group mergers. With everything going on now, could we see another major merger, creating the world’s largest hotel group?

Accor allegedly interested in IHG merger

Le Figaro is reporting that Accor is studying the possibility of a merger with InterContinental Hotels Group (IHG). Accor allegedly created a team to study the possibility of this back in June, and no final decision has been made yet. For those of you not familiar with either company:

  • Accor is publicly traded in France, and includes brands like Fairmont, Ibis, Pullman, Raffles, Sofitel, and Swissôtel
  • IHG is publicly traded in the UK, and includes brands like Crowne Plaza, Holiday Inn, Hotel Indigo, InterContinental, Kimpton, and Six Senses

IHG now owns Six Senses

It’s being reported that Accor’s Board of Directors is in favor of such a merger, while Accor’s CEO is lukewarm towards it, and thinks a merger like this doesn’t make sense at the moment. As a result, no contact has allegedly been made with IHG yet, though that could change over time.

Obviously this isn’t very far along at this point, though it’s the only major hotel merger I’ve been hearing about, so I figure it’s worth at least briefly covering.

Both of these companies were already involved in hotel acquisitions in the past few years:

  • Accor has taken over Fairmont, Raffles, and Swissôtel
  • IHG has taken over Kimpton, Regent, and Six Senses

What would a combined Accor & IHG look like?

If Accor and IHG were to merge, they’d create the world’s largest hotel group, even bigger than Marriott. The combined hotel group would have over 11,000 hotels with over 1.6 million rooms:

  • Accor operates 5,099 hotels with 747,805 rooms
  • IHG operates 5,918 hotels with 883,364 rooms

As a point of comparison, Marriott operates 7,300+ hotels with nearly 1.4 million hotel rooms.

Fairmont belongs to Accor

Geographically Accor and IHG complement one another, and there are always cost savings when you can combine corporate functions:

  • IHG is strong in the United States, while Accor has a very small presence there
  • A merger would create significant synergies in central functions, including reservations systems and loyalty programs
  • I guess another area that the two brands complement one another is with their lackluster loyalty programs 😉

If the two hotel groups merged, the combined company would have over 50 hotel brands. Talk about hotel branding getting truly out of control.

Hotel Indigo belongs to IHG

Bottom line

There’s no reason to believe that a merger between Accor and IHG is imminent, given that IHG allegedly hasn’t even been approached. That being said, this is at least being discussed at Accor, so I figure it’s worth covering.

If a merger were to happen, a combined Accor and IHG would become the biggest hotel group in the world. Personally I feel pretty neutrally towards this. I’m not a huge Accor or IHG fan, though I guess it would be nice to have more hotels to redeem points at under a combined loyalty program, assuming the IHG Rewards Club program survives.

What do you make of the prospect of an Accor & IHG merger?

Comments
  1. Another question would be whose reward program would remain intact and be used for the merger. The ability to redeem IHG points and free night certs at Fairmont properties sounds nice.

  2. IHG is bad. Intercontinental is as inconsistent as Sheraton. Holiday Inn Express is the only good brand. Holiday Inn is all over the place and generally compared, at least to a new Holiday Inn Express, a poor value. Accor is likewise bland. Fairmont is okay but some of their properties are not luxurious. I would put Fairmont on pair with a very good JW Marriott. Similarly, Sofitel is a mystery. I don’t know anyone who stays at Sofitel, even in Washington, DC. Mercure has some interesting properties but like Sheraton, Crowne Plaza, Marriott, and Hilton is fully franchised and varies greatly based on owner and management (operator) company.

  3. I don’t like how much consolidation has occurred in the hotel industry. Not good news for consumers in the end.

  4. “I guess another area that the two brands complement one another is with their lackluster loyalty programs”

    Gonna remember this the next several times I see “IHG Rewards Club Platinum Status” listed in a post encouraging us to get the IHG credit card.

  5. @Hosea

    IHG has a lackluster loyalty program. They properties are ok. So the credit card giving a free night its a good value.

  6. IMO, mergers of this size are ridiculous. I used to pretty Marriott loyal until their merger. I knew what I was getting when I booked a particular brand (Fairfield, Residence Inn, etc.) After the merger, it’s gone down hill. Too many hotel “brands” and no coordinated service approach. When will these companies realize that that can get “too” big.

  7. As long as the IHG program at least stays the same, it’s a win-win. Being able to use free night certificates and points at more properties is a win in my book. IHG points are easy to accrue whether through stays or purchasing it with 100% bonus which happens several times a year. If IHG would ever include free breakfast for the elites that would be perfect.

  8. From the other side of this I work for an ING property and the thought of having to relearn the brand makes me want to change careers!

  9. I finished my 3 years with IHG in March with being laid off as thousands of other hospitality people have been. In my 36 years in hotels, I’ve worked all the major brands, Marriott, Hilton and IHG. been through acquisitions and mergers (Stouffer to Renaissance to Marriott). I’d always worked on the corporate side, never with a franchise and let me tell you IHG is one hot mess. Hilton was by far the best to work for. But IHG doesn’t know what they’re doing . I don’t know about Accor, but it could only benefit IHG to be taken over.

  10. Look at Bonvoy. SPG, a wonderful program, hitched up with Marriott and the resulting Bonvoy barely resembles SPG anymore. Even retained features, such as “Platinum/Titanium Suite Upgrades” have been decimated to the point where a suite is not a suite.

    At least the IHG Ambassador’s program, not very rich, does what it says. If you are due a 1 category upgrade, you get it

  11. Wondering how hotel owners will feel about this? Adding more brands under the same umbrella in the city is maybe not beneficial for them.

  12. I have stayed at alot of Accor in my biz trips to Europe and generally found service to be friendly and rooms clean and decent….for the price. Their lower brands were a good value when we made a road trip around France and wanted good decent city center accommodations at an affordable rate. Sometimes we had breakfast included and it was certainly adequate for us. Lunch and dinner we wanted to enjoy each city’s unique dining scene, so no need for full service hotel food for those meals. The elite levels of reward program isn’t thrilling, maybe just a free welcome drink here and a few extra reward points. We stayed a great new Accor property in Vietnam in Dec 2019 as well. Loved it. I would welcome the merger – combined stays in both programs each year easier for status and would love to be able to earn and redeem so many more places. IHG redemptions good in US near national parks, airports etc. when all you want is a clean bed and a shower for one night.

  13. @Hjb

    I guess the hotel owners look at their P&L.

    One decade it is good to be an holiday inn, the other decade to be a mercure…

    Look what most of travelodge owners have decided recently in the uk: to be under the accor umbrella.

    Accor is very good to attract existing owners to their brands.

  14. This may motivate Marriott to be a bit better, though it will not do any favors to Hilton or Hyatt. I’m trying to be loyal to Hyatt but they just don’t have enough hotels where I travel.

  15. A merger would provide the opportunity to quietly euthanize the appallingly bad Accor ‘rewards’ program; the least rewarding of any, anywhere.

  16. As someone with Accor status, this would be quite worrisome to me. I quite like how easy the ALL programme is. Also, the IHG programme offers virtually no benefits to even the top tier status. At Accor, we get a welcome drink, (which at 4/5* hotels usually includes cocktails) we get a localised gift, (which can range from something small like a local snack/toy up to something like a large assortment of pastries with a bottle of sparkling wine) and depending on the chain, can be benefits like free soft drinks from the minibar to 10% discount at the hotel restaurant. And then, beyond that, the rewards are quite simple and can be used and redeemed at a fixed value towards the rate. No need to search for award availability, etc. And if you join their business plus scheme, you get up to 20% discount on the rates. I certainly find that some of the bigger chains have their appealing aspects, however, IHG has nothing appealing to me and I really would be worried about anything from IHG rewards programme surviving. I mean, even their top status does not include lounge access. Seems a very frightening prospect. Additionally, their hotels are boring. Holiday Inn and Intercontinental? Go to one anywhere in the world and they will all feel the same. I mean, when you are staying at the Ibis level of hotels paying 20-40 EUR per night, I understand why you would want that assurance of consistency. But once you are staying at a decent hotel, I much prefer the fluidity of the chains like Mercure and Sofitel where each hotel has character.

  17. I was a member of the 6 continents club which eventually became IHG. Wonderful program.

    I also love Fairmont which is the only Accor brand that makes sense.

    Would love to see a merger, I currently am Spire.

  18. I’m somewhat hopeful that the European Commission will block this on the grounds of competition for the consumers. I don’t remember the last time I stayed at an InterCon property I enjoyed, probably Holiday Inn Penang or the Semiramis in Cairo. When it comes to Accor, I’ve always been a fan at their properties in Singapore, both the Swissôtel Stamford and the Raffles. And I stay there despite my strong feelings of the owner of the brand.

    I don’t know, I don’t generally like the idea of further consolidation every now and then. Suppose I’m powerless to stop it, though.

  19. Would be a total disaster if they ended up using the Accor programme – sure it has better status recognition re upgrades but the redemptions are just straight cashback and there are no credit card earning opportunities. Accor CS is also even worse than IHG’s!

    As an aside, interesting re Marriott being so big – in Europe and Asia they feel more of a minor player to me, with a small number of overpriced properties. I hardly ever use them!

  20. With merger betweeen Marriott and Starwood, what have happened is that Starwood Brands Lost identity and Start loosing luxury/premium touch and feel.
    Starwood was by far most advanced hotel chain in the whole world. It is sad, how Marriott destroyed all. They call every excel “tool”. Ha, ha, ha…..

    Loyalty program (Marriott Bonvoy) is joke comparing with what was SPG (Starwood).

    I hope both sides (Accor & IHG) would learn, from Marriott / Starwood case.

  21. I would hope the Accor loyalty program (All) survives, it is in my view quite state of the art. The benefits are very similar to those of HHonors, which in my view is the leading program. At Accor, I’m a lowly Silver, but get very good recognition of the (arguably limited) benefits.

  22. Andy

    I agree, the Accor benefits are simple and universal i.e. room upgrade, free drinks, welcome gift. And the cashback awards mean no blackout dates

  23. @marl s,

    So you consider a pathetic “one category” upgrade an absolute win over a suite upgrade? I am having a hard time understanding this kind of rationale. I would call my ambassador and have some serious complain if I only get a one category upgrade at any marriott property. Where all this hate towards marriott came from? The new program has every benefit from previous 2 programs combined. You get these benefits at a significantly larger profolio of properties. Maybe because they raised requirements for top elites and we are seeing some sour grape situation here?

  24. The value in a merger like this one is that it would steer US travelers to hotels in Europe that they might not have otherwise considered staying at.

    You can think of Marriott as a booking site that needs to be able to offer you a place to stay wherever you are going and whatever type of accommodations you want so don’t need to book anywhere else. That and their loyalty program drive business to the properties they manage rather than own.

  25. @John

    The unhappy people who complain are all the Starwood loyalty members who have had everything they were used to receiving stripped away leaving them with basically nothing.

    Marriott people loved the new rewards which were for them an improvement.

    As an ex Starwood Gold the new BonVoy is useless.

  26. Of all of these mergers, this one actually makes a lot of sense. Accor run a tight ship when it comes to brand standards, something that IHG could benefit from. Additionally, as Ben rightly points out, they don’t have a ton of geography overlap.

    I briefly had status with Accor (back when they were giving out status like dentists give out toothbrushes) and had some very nice stays at Sofitels. It wasn’t a great program, but neither is IHG’s, so maybe they could use a merger as an opportunity to improve (unlikely, but who knows?).

Leave a Reply

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Your email address will not be published. Required fields are marked *