Early stage talks are today reported to have been held between InterContinental Hotels and Starwood Hotels & Resorts to create the world’s largest hotel group.
The informal talks were very tentative and Starwood may choose another suitor or pursue another strategy, the Financial Times reported, citing two people “familiar with the discussions”.
Starwood may be conducting parallel talks with other interested parties, with candidates likely to include US hotel group Wyndham.
IHG said in a statement that it is not currently “in talks with Starwood with a view to a combination of the businesses”.
IHG chief executive Richard Solomons declined to comment on Starwood as he reported a rise in first-half pre-tax profits. A Starwood spokesman also declined to comment.
Solomons said IHG’s strategy was to grow organically. He said the company had signed deals to manage 231 hotels in the first half.
“There is a lot of noise around consolidation. If you look back a few years it was real; now it is effectively organic,” he told the FT.
“We have had extensive organic consolidation: we signed more deals in the first half than any time since 2008, we are building new brands and buying up little brands like Kimpton.”
Starwood’s market capitalisation is $13.8 billion, while IHG’s is roughly $9.5 billion, but Starwood filed plans last month to spin off its vacation timeshare business into a separate publicly traded business.
The two companies have complementary portfolios, analysts have said. Starwood owns the Le Méridien, St Regis and W brands and has 1,207 hotels, three-quarters of them in the luxury sector.
ICH franchises, manages or leases 4,800 hotels in 100 countries with brands in its portfolio including Holiday Inn, Crowne Plaza and Kimpton.
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