Downsides of too many takeovers

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BANGKOK, 3 May 2018: In the UK, supermarket giants Sainsbury’s and Asda announced details of a merger, last week, while across the channel in Paris, Accor confirmed it would pay 560 million Swiss francs for Mövenpick Hotels and Resorts.

Both are examples of consolidation, acquisitions and mergers that don’t necessarily benefit consumers.

The supermarket deal in the UK is subject to approval from the Competition and Markets Authority. There are worries that the bottom line costs of weekly groceries will increase once the dust settles on the merger.

In the global hotel industry there are no such checks and balances. The hospitality business is fast turning into a three-horse race with AccorHotels, Marriott and IHG scrapping for the winnings in a diminishing circle of smaller hotel groups.

But is that what travel consumers want today?

From a business perspective who can fault the logic behind AccorHotels’ purchase of Mövenpick? But from a traveller’s perspective it might not be so welcome.

The reality is that whatever city we choose most of the hotels will be managed by Accor, IHG or Marriott.

Sorry, but AccorHotels gives me the impression of a massive  branding factory that stamps out bed and breakfast plastic wrapped with a neat logo all at the drop of a hat.

We have to ask just what will Accor bring to the table to enhance Mövenpick’s single and clear branding, or will it ultimately reflag the properties Pullman or Sofitel?

There are examples of AccorHotels buying brands in Asia and promising to keep them intact as independent brands, only to see them disappear a decade later.

Personally, Mövenpick came across as being special mainly due its Swiss hotel heritage and its fantastic ice-cream. Regrettably, in the long-run I don’t see the Swiss DNA surviving the Accor debriefing.

Mövenpick’s accommodation arm was founded in 1973, as an offshoot of an ice-cream and fine wine enterprise which began in Switzerland in the 1940s. Its portfolio comprises of 84 hotels. That represents around 2% of AccorHotel’s total 4,000 plus hotel inventory.

The Swiss group was expanding fast with 42 additional hotels in the pipeline due to open by 2021 in the Middle East, Africa and Asia-Pacific.

AccorHotels, chairman and chief executive, Sébastien Bazin at the time of the announcement said: “With the acquisition of Mövenpick, we are consolidating our leadership in the European market and are further accelerating our growth in emerging markets, in particular in the Middle East, Africa and Asia-Pacific.”

AccorHotels recently acquired the Fairmont, Raffles and Swissotel brands.

For the consumer, the line up of brands is becoming extremely confusing. Often the various brands are ill-defined or simply duplications. Hotel groups like Accor, assume that they can mention Pullman and we immediately know what makes it different from a Sofitel.  Usually, the definitions are vague. It’s the people who work in a hotel that matter and they swap brand badges at the close of shift without any perceivable change to the running of the property on the following morning.

I witnessed one city hotel in Bangkok undergo three major brand changes and the only discernible difference appeared to be the new logo on the door.

Decades ago, a business traveller told me he always stayed in a Hilton, because there were no surprises. Everything in the room was in the right place, whatever the city you visited. You could find the switches in the dark and you never tripped over the chairs.

But today, the emphasis is on distinct travel experiences and we have to wonder how factory brands that pride themselves on delivering carbon copies, wherever they happen to be, can meet the aspirations of consumers searching for a community experience.