Canadian snowbirds travelling south of the border could soon be booking their stay at a Delta, thanks to new synergies that will accompany a pending ownership change at the hotel brand.
Bethesda, Md.-based Marriott International recently signed a definitive agreement to acquire the Delta Hotels & Resorts brand and management and franchise business from a subsidiary of Victoria-based BcIMC for $168 million. “As we are a global institutional investor, we routinely review our investments,” reads an emailed statement from the company. “Current market conditions, combined with the successful repositioning of the Delta brand, has led BcIMC to conclude it is an appropriate time to realize the value of our investments in Delta.”
Under the terms of the agreement, BcIMC affiliates will retain ownership of 13 Delta hotels (and one under development) and will sign new 30-year management contracts with Marriott. Third parties own the other 25 Delta properties, including 15 managed and 10 franchised. When the transaction closes (possibly in April) Marriott will become the largest full-service hotel company in Canada with more than 120 hotels and 27,000 rooms.
The transaction will introduce Marriott to new markets and capitalize on Delta’s broad customer base. Case in point: the brand has about 94-per-cent Canadian loyalty, according to Michael Beckley, SVP of Lodging Development for Mississauga, Ont.-based Marriott Hotels of Canada. And he wants to capitalize on this allegiance and open units south of the border, since Canadians book 20-million room nights in the U.S. annually.
But, there’s more to the equation than that. Although there are ample opportunities to convert existing product in Canada, Delta could expand beyond North America, too. “We’ve got our presidents in Asia-Pacific, Middle East, Africa, Europe, Caribbean and Latin America looking at that opportunity as we speak, and we’ll do so over the next 12 to 24 months,” Beckley explained.
In addition to the growth benefits, the agreement will also create operational synergies for owners and franchisees. Delta will be integrated into Marriott’s systems, sales engines, marriott.com and the Marriott Rewards loyalty program, which has 49-million members. “Delta guests will become our guests, not just in Canada but globally,” Beckley noted.
Volume 27, Number 2