Marriott International Inc. made a huge leap, positioning them in the center of the hotel market in Canada. For $168 million they accquires Delta’s 30 hotels and 10,000 rooms all around the country, making them leaders in terms of size. Once the agreement is made, Marriott would have a presence with more than 120 hotels and 27,000 rooms. Marriott International Inc. plans to gain control over the Delta brand, management, franchise business and intellectual property. The deal closed in the second quarter of 2015.
Despite the current difficult situation with Canada’s economy as a result of the weakened Canadian dollar and cheaper oil, Rick Hoffman, executive vice president of mergers and acquisitions in Marriott, sees plenty of upsides for the tourism and the overall hotel industry. He believes now it’s a good time to invest in these markets and actually takes the positive out of the lower value of fuel and
currency, encouragingly forecasting a growth in the trips made to Canada in 2015 with around 200,000 for the Americans, 150,000 for international visitors and 1.1 million more domestic overnight trips from the Canadians.
Owning a big stake in Canada’s hotel market is just another step in Marriott’s expand strategy, as they recently bought local hotel chains in Europe and Africa, benefiting from the strong US dollar. Seeking opportunities outside of the well-established American hotel market seems to be one of their priorities.
Marriott, evaluated on 22.3 billions dollars currently owns more than 4,100 properties in 79 countries, including 86 Canadian commercial real estate locations. It reported revenues of nearly $13 billion (U.S.) in 2013.
British Columbia Investment Management Corporation must be quite satisfied with the sale. They acquired Delta in 2007 and since there is currently a very good, growing demand for the hotel industry, the idea of selling might actually come up as brilliant. What we can say about the financial outcome ? Quite pleasing.