Is this the beginning of a new cycle of global hotel chains buying independent hotel groups? As competition intensifies for soft brands, more of such consolidations should not surprise anyone.
WorldHotels has been acquired again, this time by Best Western Hotels & Resorts, exactly two years after it was bought by Associated Luxury Hotels.
The price was undisclosed.
Global hotel chains, including Best Western, have been entering the turf of independent hotel groups by launching a slew of soft brands, but this is the first time a hotel group has bought over one of them fully. Starwood Hotels & Resorts acquired a nearly 50 percent stake in Design Hotels in 2011.
The acquisition, announced Monday, will give Best Western a handle on the upper upscale and luxury segments which it never had. With roots in mid scale, Best Western started to inch up by launching soft brands such as the BW Premier Collection in 2015 targeting upscale and upper upscale independent hotels; SureStay Collection by Best Western in 2016 targeting upper economy and midscale properties, and BW Signature Collection in 2017 which goes for the upper midscale hotels.
Frankfurt-based WorldHotels’ collection of more than 300 hotels and resorts — recently re-classified in three categories, distinctive, elite and luxury — plugs the high-end segments for the chain.
“The WorldHotels brand will play a critical role in enhancing Best Western’s portfolio of offerings to include the upper upscale and luxury segments,” said a statement from Best Western announcing the acquisition.
On the other hand, a proliferation of soft brands, online travel agencies, homesharing players — all of which offer independent hotels new distribution and marketing choices — are intensifying the competition for players such as WorldHotels, Preferred Hotels & Resorts, Small Luxury Hotels and the like. Add to that hotel chain consolidation, which gives the behemoths enormous economies of scale.
HOW IT WILL BENEFIT WORLDHOTELS
Through the acquisition, WorldHotels hopes to benefit from Best Western’s “robust and scalable e-commerce platform, strong partnerships, award-winning loyalty program, effective sales and marketing support, global distribution network, and powerful revenue engines,” according to the statement.
“There is tremendous synergy between Best Western and WorldHotels. By joining forces in this new partnership, we will create competitive advantages for both companies,” said David Kong, Best Western president and CEO. “I have the utmost respect for WorldHotels and believe in its vast potential.”
Current intentions are for WorldHotels to maintain its identity and to be marketed separately from Best Western. Geoff Andrew will continue as CEO of WorldHotels for the foreseeable future, said Kong.
Kong added, “In the coming months, our focus will be to unlock WorldHotels’ potential by improving revenue delivery to its hotels while protecting its independent identity. We truly believe our platform and revenue engines will benefit WorldHotels and attract many more independence–minded, quality hotels to join the brand.”
Said Andrew: “Best Western is one of the largest, most respected and trusted hotel brands. As we join forces, the combined power of our brands sets the stage for a bright future for both Best Western and WorldHotels. Through its established senior leadership team and regional presence in each market, Best Western brings a new level of expertise that will undoubtedly help grow the WorldHotels brand in key markets.”
NOT THE RIGHT FIT
Meanwhile, Associated Luxury Hotels’ decision to part ways with WorldHotels could be because WorldHotels was not a right fit for it after all.
Skift understands that Associated Luxury Hotels is focused on expanding its meetings service across the luxury sector, while WorldHotels is focused on driving global growth for its members through corporate and leisure sales.
At press time, neither Best Western nor Associated Luxury Hotels could be reached for additional comments due to the President Day’s holiday in the U.S.
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Photo credit: Best Western CEO David Kong at the chain’s convention in 2017. Best Western Hotels & Resorts / Best Western