Accor SA may be paying too much to acquire the owner of the luxury Fairmont, Raffles and Swissotel brands as the French company scrambles to protect itself against online competitors and expand its U.S. and Asian reach.

“While we see a long-term rationale in the deal — stronger U.S. and luxury positioning, scale and enhanced growth potential — we struggle to reconcile these positives with the price that Accor is paying, which we consider to be very high,” Barclays analyst Vicki Stern wrote in a note on Thursday.

Europe’s biggest hotel operator agreed to buy FRHI Holdings Ltd. for about $2.9 billion in shares and cash from Qatar Investment Authority, Prince Alwaleed Bin Talal’s Kingdom Holding Co. and Oxford Properties Group Inc., Accor said in a statement after the market closed on Wednesday.

Accor, which operates the Ibis and Sofitel chains, has 3,800 hotels worldwide. FRHI, based in Toronto, operates more than 100 high-end hotels, including Manhattan’s Plaza, London’s Savoy and Raffles in Singapore, and has 40 under development.

The FRHI acquisition “leaves us underwhelmed,” Credit Suisse analyst Tim Ramskill said in a note. “The deal looks expensive.” Ramskill has a neutral rating on Accor.

Accor didn’t immediately respond to a request for comment.

Global lodging deals rose to $46 billion through November, beating the $37 billion record set in 2014, according to data compiled by Bloomberg Intelligence. Last month, Marriott International Inc. inked the biggest deal in the industry since 2007 by agreeing to buy Starwood Hotels & Resorts Worldwide Inc. in a $12.2 billion deal.

Accor rose as much as 1.6 percent in Paris trading and was little changed at 38.93 euros at 9:55 a.m. The shares fell in the previous three days.

This article was written by Dalia Fahmy from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: Fairmont Le Château Frontenac in Quebec City, Canada. PRODavid Fulmer / Flickr