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Banyan Tree enters into strategic collaboration with AccorHotels

SINGAPORE (Dec 8): Banyan Tree Holdings announced that it has entered into a strategic collaboration with hotel giant AccorHotels which is investing S$24 million in the operator of luxury resorts.

Under the agreement, Banyan Tree will have access to Accor’s global reservations and sales networks as well as its loyalty programme, Le Club AccorHotels.

Banyan Tree and Accor will also co-develop hotels and branded residences under the Banyan Tree, Angsana, Cassia and Dhawa brands, which would be managed by Accor under the Banyan Tree brand.

Both Banyan Tree and Accor will share the management and other fees received through Accor. This collaboration will be for an initial term of 10 years subject to early termination or extension.

Banyan Tree is also issuing a S$24 million convertible debenture to Accor. The debenture will convert to shares when the VWAP over 90 days hit 60 Singaporean cents within 4 ½ years, or automatically at the end of the 4 ½ year period, or if the company announces a rights issue or preferential offer of shares. Accor will also have an option to purchase more shares within six months after conversion, of no more than 10% of Banyan Tree.

In its filing, Banyan Tree says the arrangement allows the group to remain an independent company while tapping on Accor’s strength and experience to grow its brands, propelling Banyan Tree to global reach and range. This arrangement also allows the company to strengthen its revenue stream while providing expansion opportunities.

Accor is also excluded from co-development rights in mainland China, Thailand, Vietnam, certain parts of Mexico, Jeju Island, and certain parts of the Maldives unless permitted by Banyan Tree.

“Our strategic alliance with AccorHotels allows us to remain an independent company, enabling us to continue securing hotel management agreements on our own and yet accelerating Banyan Tree's speed and scope of expansion, but with AccorHotels helping us to grow our brands around the world,” Ho Kwon Ping, executive chairman, Banyan Tree.

“We believe this agreement will propel our brands rapidly to global reach and range and strengthen our ability to embrace change and innovation in the hospitality industry with a strong global partner," he adds.

“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,” says Sebastien Bazin, chief executive officer and chairman of AccorHotels.

“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,” he adds.

Shares of Banyan Tree closed flat at 39.5 Singaporean cents on Wednesday. — theedgemarkets.com.sg

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