Associated Luxury Hotels (ALH) has significantly expanded its global footprint, its collection of member hotels and resorts, and its worldwide sales, marketing, distribution and hospitality services with the acquisition of Frankfurt, Germany-based Worldhotels for an undisclosed price from a Boston-based private equity firm Battery Ventures, HOTELS has exclusively learned. The combined businesses will represent some 600 hotels and 213,500 guest rooms worldwide.
Worldhotels, with 350 member hotels and resorts around the world with 75,000 rooms, will continue to operate separately from ALH’s brand, Assoicated Luxury Hotels International, which provides sales and marketing services for some 250 luxury-level independent hotels and resorts with some 138,500 rooms. Perhaps one of the biggest synergies apart from corporate overhead will be complementary business referral programs between the two groups.
The deal doubles the size of the Associated Luxury Hotels organization in terms of people, revenue, sales and profit, and ALH Chief Commercial Officer Tom Santora, who will add the role of executive chairman of Worldhotels, said over the next two to three years ALH hopes to triple the profitability of Worldhotels. Another goal, said Santora, is to grow Worldhotels members to 500 from the current 350 within 24 to 30 months.
Santora also said WLH would consider further acquisition. “There’s nobody I would say that’s on the radar for next week but it could happen,” he said.
Some select Worldhotels member hotels and resorts may be invited into the ALHI membership portfolio for the benefit of the customers and accounts around the world as most of Worldhotels’ member hotels and resorts are outside of America, with major concentrations in Europe and Asia-Pacific regions. “Member hotels of both companies and their guests will benefit from the expanded access, markets, and global sales and marketing capability of a proven and passionate client service approach with a broader global footprint,” said Associated Luxury Hotels Chairman David Gabri.
Worldhotels’ Chief Executive Officer Geoff Andrew will continue to lead its organization of 140 sales professionals and staff globally from the Frankfurt headquarters.
The match appears to be complementary as Worldhotels’ global membership base primarily focuses on the transient travel sectors, meetings and loyalty solutions, whereas ALHI hotels focus mainly on the North American meetings and incentive business marketplace.
ALHI had already announced to its members that it plans to establish “ALHI boots on the ground,” augmenting its ALHI Global Sales Organization (GSO) sales team into Europe in 2017. Both ALHI and Worldhotels have been exploring means of expanding their geographic reach, talent pool, market penetration, and tactical deployment, making this strategic combination beneficial to both organizations and their memberships.
“At Associated Luxury Hotels we knew that this was the perfect complement to sustain our business over the 10, 20 or 30 years and it’s also something our existing members in ALHI were clamoring for,” Santora told HOTELS.
Santora further explained business synergies by pointing to examples of existing business relationships. “One of Worldhotels top 10 accounts is Samsung and, well, ALHI doesn’t really do any business with Samsung,” he said. “So this opens doors and it works both ways because we’ve got some great relationships with Wells Fargo that will allow Worldhotels to get into that door. We can at least set the stage to open up those conversations and relationships.”
Santora added that there are about 40 Worldhotels members with significant meeting space in key markets that ALHI could help because of their underutilized meetings profile.
“We think this combination that we’re putting together here for independents can be defined as one plus one equals three,” Santora added. “We really think there’s going to be some interesting offerings that we can provide to independent hotels to really maintain their true independence.”
Andrew added, “What we share with ALHI is a passion for true independence. In fact, our mission statement is empowering through independence and we see that as a kind of a rallying cry and something that is worth fighting for.”