FRHI eyes growth through acquisitions

FRHI Hotels and Resorts senior vice president development, Europe, Middle East, and Africa Francois Baudin revealed to Hotelier Middle East the group is eyeing an acquisition-led growth strategy.

Baudin explained: “We can use organic growth like we have so far, but having a portfolio of acquisitions gives you scale and I think what is missing for us sometimes is having scale in order to compete with brands which have much bigger distribution systems.

Swissotel today has 35 hotels in operation and 20 in the pipeline, but if we compare ourselves at the same level as Westin or Crowne Plaza, we are talking about big machines behind them with huge distribution systems and a big footprint. So it’s difficult for us to compete even on the development side.”

Baudin also believes a higher volume on properties in the market would allow FRHI to franchise its hotels.

“If we manage to put 50 or 100 hotels with the same kind of positioning on the map, which can give us the scale, it could maybe allow us to look at the franchise business, because this is something we don’t do at the moment,” he said.

Baudin however did not comment when questioned whether the group would be open to acquiring Starwood Hotels & Resorts, following recent news reports hat the group is open to a sale after weak Q1 performance in 2015.

“It’s interesting to see that the mergers and acquisitions market is active. I’m not even sure if Starwood is absolutely driven to a sale; it’s one of the options, but there are other options as well.

“I think the market will have to be watched because something will happen and everybody has interesting balance sheets so we are all observing to see what fits and what makes sense. The fact that we are a private company gives us more flexibility."