Could InterContinental and Marriott merge?

Tie-up would “create a dominant player in the global hotel market”

Rumours that two of the world’s biggest hotel companies are planning to “room together” have been exciting investors and industry experts. Globally, the UK-based Intercontinental runs over 4,500 hotels, while US-based Marriott operates 3,700 properties. Analysts at the investment banking group Numis tell the newspaper the Daily Telegraph that, like airlines, “hotel industry consolidation is inevitable at some stage”. A transatlantic bond between IHG and Marriott is “just one of the potential tie-ups”, they said. Such a merger would “create a dominant player in the global hotel market”, with more than 9% of the world’s room supply.
“The strategic rationale for a merger between InterContinental and Marriott is compelling. First of all the strategic growth plans for the two businesses are remarkably similar. Both, for example, have had a long-standing focus on reducing hotel ownership and pursuing management and franchise contracts.
“Secondly, both companies are pursing global growth opportunities by establishing a strong presence in key gateway cities, continuing to develop in large established markets and looking to expand in emerging markets, notably China.”
Daily Telegraph
[pictured: Holiday Inn Resort Phuket, Thailand; courtesy IHG]

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