Late last year, in only a matter of weeks, the hotel landscape in Canada changed dramatically. First, Marriott International, Inc. acquired Starwood Hotels & Resorts Worldwide, Inc. in a blockbuster deal that promises to impact hotels in major cities in this country and around the world. This announcement came several months after Marriott acquired homegrown Delta Hotels and Resorts. With the acquisitions, Marriott will now control about 20 per cent of the room inventory in Canada, while in some cities such as Halifax that number will increase to a whopping 75 per cent. Of course, the deal still needs regulatory approval, which should follow in the next few months. But it will probably take a lot longer to ascertain the real impact of how these deals will impact the industry. Will some hotel brands be eliminated? Will there be significant staff cuts? Will the company’s corporate culture be forced to change? Will this deal allow, as some industry analysts posit, hotels to better compete against third-party intermediaries? Time will tell on all fronts.

Interestingly, the ink on that deal wasn’t dry when news came down the pipeline a few weeks later that Paris-based AccorHotels had acquired Canada-based FRHI Holdings Ltd., the parent company of Fairmont, Raffles and Swissôtel, in a move that many pundits speculated about for months.

Apart from the usual concerns that surface after a major acquisition, there’s another layer of complexity at play in this transaction. For many in the hotel industry in Canada, there is perhaps a feeling of loss, with many wondering what will now happen to the iconic Canadian brand that has been part of our fabric for more than a century. Admittedly, the Fairmont brand was American, but its acquisition by industry stalwart Canadian Pacific Hotels almost a decade ago made it an international success story with Canadian roots. Though for several years now the company has been owned by the Qatar Investment Authority, Kingdom Holding Company of Saudi Arabia and Oxford Properties, because Fairmont Hotels was headquartered in Canada and helmed by Canadians it made us feel that, at its heart, the company was uniquely Canadian.

As we turn the page on a new year, with more consolidation predicted, the effects of these acquisitions will ultimately unfold. But one thing seems certain: mergers and acquisitions speak to an increasingly competitive and global world where the big get bigger and where geographic boundaries and borders no longer really truly exist.

Volume 28, Number 1

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