Analyst rumours of Accor and IHG merger to create world’s largest hotel group

The world’s fifth largest hotel chain, Accor, and InterContinental Hotels Group (IHG) are reportedly considering a merger that would create the world’s largest hotel group with a capitalisation of US$17bn. Although analysts report the French chain has yet to make an official offer to IHG, the French newspaper Le Figaro reported that Accor’s board of governors is in favour of the deal. Accor owns the Ibis, Movenpick, Raffles and Sofitel brands. Earlier this month, the group said it would cut 1,000 jobs worldwide and look to achieve annual cost savings of €200m by 2022. Accor RevPAR was down 59% in the first half of 2020 and group chairman and CEO Sebastien Bezin, 4 August, described the shock the industry was facing as “violent and unprecedented”, while predicting “the peak of the crisis is behind us”. IHG owns the Holiday Inn, Crowne Plaza and Regent Hotels brands. Analysts have noted such a merger would make sense in terms of geographic presence, with Accor a leader in the European market and many emerging markets, while IHG has a strong presence in North America and growing rapidly in China. Shares in both companies rose on the reports which would leapfrog the merged brands over Marriott to become the world’s largest hotel company with more than 1.6m hotel rooms. It should be noted that the rise is still small compared to the 43% fall in Accor shares this year. IHG’s stock is also over 20% down on the year to date. There is also plenty of scepticism that the deal, which would be the biggest in hotels since Marriott acquired Starwood in 2016, will actually get done, given the rumour mill has touting major hotel group link ups for several years now.