China Con­glom­er­ate HNA Group’s Unit to Buy Carl­son Ho­tels

HNA Tourism’s deal marks yet an­other ma­jor con­sol­i­da­tion in global ho­tel in­dus­try

The Economic Times - - Brands: Creating Desire - Di­vya.Sathya­narayanan @times­

Mum­bai: A unit of Chi­nese con­glom­er­ate HNA Group has agreed to buy Carl­son Ho­tels, the owner of sev­eral brands in­clud­ing Radis­son and Coun­try Inns and Suites, in what marks yet an­other ma­jor con­sol­i­da­tion in the global ho­tel in­dus­try. HNA Tourism Group Co, a divi­sion of avi­a­tion and ship­ping ma­jor HNA Group Co will ac­quire 100% of Carl­son Ho­tels and also its 51.3% state in Brus­sels-based Rezi­dor Ho­tel Group AB, which op­er­ates Carl­son ho­tels in Europe, Africa and the Mid­dle East, the com­pa­nies said in a joint state­ment.

The pur­chase price was, how­ever, not dis­closed. HNA Tourism chair­man Haibo Bai said buy­ing Carl­son Ho­tels will help the Chi­nese com­pany “es­tab­lish our pres­ence in the US mar­ket and ex­pand our foot­print in hos­pi­tal­ity in­ter­na­tion­ally”.

Carl­son Ho­tels has1,400 prop­er­ties with more than 2,20,000 rooms un­der op­er­a­tion in 115 coun­tries and ter­ri­to­ries. In In­dia, Carl­son Rezi­dor is the third-largest ho­tel com­pany by op­er­at­ing ho­tels and room in­ven­tory as of Septem­ber 2015, ac­cord­ing to ho­tel con­sul­tancy HVS. Tata-owned Taj Group and ITC Ho­tels rank first and sec­ond cur­rently. Once Mar­riott In­ter­na­tional com­pletes the ac­qui­si­tion of Star­wood Ho­tels by mid-2016, the com­bined en­tity will be­come the mar­ket leader in In­dia, dis­plac­ing the Taj Group. “Join­ing hands with HNA al­lows Carl­son to in­vest more in tech­nol­ogy, dig­i­tal space and also into own­er­ship of ho­tels in gate­way mar­kets as th­ese are the de­mand driv­ers for any des­ti­na­tion,” said Raj Rana, CEO-South Asia at Carl­son Rezi­dor.

In­dia is the sec­ond-largest mar­ket for the Amer­i­can hos­pi­tal­ity man­age­ment com­pany, its Asia Pa­cific pres­i­dent Thorsten Kirschke told ET dur­ing a re­cent in­ter­view. The ho­tel chain has 43 ho­tels in the pipe­line in In­dia, only sur­passed by the US.

HNA plans to in­vest “sub­stanti- ally” in Carl­son’s ho­tel busi­ness to ac­cel­er­ate growth and build­ing of Radis­son RED and other new brands.

Af­ter the com­ple­tion of the deal, Carl­son Ho­tels will main­tain its head­quar­ters at Min­netonka in Min­nesota, US and David P Berg, CEO of Carl­son Hos­pi­tal­ity Group will con­tinue in the same role at the new or­gan­i­sa­tion.

Be­sides Radis­son, Radis­son Blu and Radis­son Red, the com­pany owns the Quorvus Col­lec­tion, Park Inn by Radis­son, Coun­try Inns & Suites by Carl­son and the Club Carl­son fre­quent-guest pro­gramme.

The deal, sub­ject to reg­u­la­tory ap­provals, is ex­pected to be com­pleted in the sec­ond half of 2016. HNA Group, based in south­ern Hainan prov­ince, op­er­ates ho­tels, air­lines, air­ports and fi­nan­cial ser­vices and real es­tate busi­nesses. It is one of the big­gest share­holder in Span­ish ho­tel com­pany NH Ho­tel Group SA.

HNA's ac­qui­si­tion of Carl­son is part of a wave of Chi­nese in­vest­ment in over­seas ho­tel prop­er­ties and brands, amid in­creas­ing over­seas travel by Chi­nese and con­cern about yuan de­val­u­a­tion.

The deal is ex­pected to be com­pleted in 2016, and once done, Carl­son will re­tain its cur­rent head­quar­ters in the US and also its CEO

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