The Hospitality Industry Weighs In on an Accor & IHG Merger

Few industries have been as hard hit by the COVID-19 pandemic as travel and hospitality. From international hotel chains to local B&B’s, hotels worldwide are looking for ways to survive and thrive in a slowly recovering industry.

The latest rumors in the hospitality world may spell big change for the hotel industry at large. According to French media, a rumored merger between hotel groups Intercontinental Hotel Group (IHG) and Accor would position the duo as the largest hotel group in the world.

To gather a holistic view of the merger’s potential effects and the future of travel hospitality, MarketScale spoke with Babak Hafezi, CEO of Hafezi Capital, a private consulting firm for corporate mergers, as well as Shaun Taylor, owner of Moriti Safaris, who speaks from the perspective of small-business hotels and tour groups.

The future of travel is unknown, but Hafezi predicts survival is dependent upon diversification. IHG would benefit from Accord’s peripheral products, said Hafezi.

“Having a plethora of brands and services to offer will strengthen its ability to survive in the new market and the new normal,” he said. These products include things like co-working spaces, short term apartment rentals, and catering services.

Taylor also thinks big hotel chains may have their eye on new niche avenues in the market. Post COVID-19, Taylor considers the consumer.

“Are people wanting to be in large hotels with lots of people? I don’t think so,” he said.

In this regard, small boutique hotels and tour operators are well poised to recover with crowd-cautious consumers.

“Smaller operators are going to need that existing business to climb out of this. Will it be there if the bigger hotel chains get involved in the industry and…have more market spend and more reach. We will have to see,” Taylor said.

Taylor admits it is a scary time but an “exciting,” time for smaller operators. Natural competition helps push the hospitality business in innovative ways, creating the opportunity for a better product and long term growth.

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