Skift Take

Medium-sized hotel companies know they need scale to compete. With NH Hotels open to consolidation and Barcelo still keen on doing deals, it doesn’t look like we’ve heard the end of this story.

Spain-based Barceló Group remains in the market for buying or merging with other hotel companies despite NH Hotels turning down  a deal.

Earlier this year, NH’s board rejected the merger approach, saying that it didn’t offer shareholder value, but recent comments suggest it is not averse to doing some kind of deal — not necessarily with Barceló — at some point in the future.

Raul Gonzalez, Barceló’s CEO, said at the International Hotel Investment Forum in Berlin earlier this week that a tie-up with NH “made a lot of sense for both parties,” but that “at the moment it had been not possible to do the deal.”

NH is the 22nd largest hotel operator with more than 55,000 rooms, according to data from STR. Barceló is smaller, with 33,000 rooms, but a merged entity would in theory take the two above the likes of Premier Inn owner Whitbread and Red Lion Hotels into 14th place.

Gonzalez believes that consolidation is the way forward. There are a number of medium-sized hotel companies based in Spain, including Melia Hotels International and RIU Hotels & Resorts.

According to Gonzalez, the market is “too fragmented and not efficient enough” and operators need scale to be a truly global hotel player.

“We will try and we will insist to do other deals,” he said.

Barceló Group started life as a transportation business in 1931 and now includes both hotel and travel divisions. It is privately held, unlike NH Hotels, which is listed on the Madrid stock exchange.

Chinese conglomerate HNA Group currently holds a 29 percent stake but is looking to sell in an attempt to service its mounting debt.

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Tags: barcelo, nh hotel group, nh hotels

Photo credit: Raul Gonzalez, CEO of Barcelo Hotel Group, said the company is interesting in pursuing mergers and acquisitions. Leading Brands of Spain Forum