The agreement at the end of last year between AccorHotels and Banyan Tree Holdings (BTH) gives to the French hospitality group a leading positioning in the luxury segment of the hotel industry. The agreement signed in December includes the co-development of properties (including branded serviced residences) and branded residences under the Banyan Tree, Angsana, Cassia and Dhawa brands and other brands globally.
However, it excludes certain territories which are remaining under the exclusive marketing of BTH. Accor is to be excluded from co-development rights in mainland China, Thailand, Vietnam, certain parts of Mexico, Jeju Island (South Korea) and certain parts of the Maldives, unless expressly permitted by BTH.
AccorHotels is taking 5% of BTH, which represents an initial investment of S$ 24 million (c. US$17.2 million) in Banyan Tree. AccorHotels has an option to purchase an additional approximately 5% stake.
The collaboration will involve the parties carrying out business development activities with a view to securing hotel management and residence licensing agreements to manage co-developed hotels and branded residences. Such co-developed hotels and branded residences will be managed by Accor under BTH brand and quality standards. BTH will continue to undertake brand management activities. Other activities such as training, sales and marketing, technical assistance, etc. will be undertaken by the Parties in accordance with the Collaboration term sheet.
As further elaborated below, BTH may also solely develop its own hotel contracts in regions designated for co-developed hotels. BTH will also have access to Accor’s global reservations and sales network and loyalty programme. For each co-developed hotel and branded residence, BTH and Accor will share the management and other fees received through Accor. The Collaboration shall be for an initial term of 10 years subject to extension and earlier termination in accordance with the terms of the agreement.
In connection with the Transaction, Accor is nominating one director to the board of directors of BTH. Accor has indicated to BTH that its first nominee to the Board is Sebastien Bazin, the CEO and Chairman of Accor group.
Mr Bazin declared: “Our collaboration with Banyan Tree is a great opportunity to complement our business proposition to owners with iconic brands, while always better servicing our Guests. Banyan Tree Holdings has created key leading positions across Asia with luxury resorts, one of the fastest growing segments in the industry. We will bring scale to the network through our ability to develop and manage hotels under the Banyan Tree brands globally, hence strengthening our leadership in the luxury hotel space”.