Merger creates Allia chain, the third largest in the country
Valor Econômico
Three national hotels chains announced today an unprecedented initiative in this sector in Brazil. The Bristol Hotels, the Plaza Inn, and the Solare promote a merger and create the third largest hotel chain in the country. Together, they have 40 undertakings focused in the economic class, joint earnings estimated in R$ 150 million (US$ 88.2 million) this year, 3,000 rooms and 1,600 employees. The merger of the three chains brings to the market the Allia Hotels, which will coordinate the operation and expansion strategy of the three flags, which will continue existing. The economic sector responded in 2009 by 20% of the earnings of the associated to the Brazilian Forum of Hotel Operators (FOHB), of R$ 3 billion (US$ 1.76 billion).
Allia, which means luck in Latin and is also an acronym for alliance, is born affiliated to the FOHB. Besides being the controller, Allia is the brand that will launch the group in the segment of luxury hotels. The fusion process should be completed in two years and each chain will undergo an audit. "It was a combination of profiles, cultures, and availability to understand that the merger was beneficial", says the chairman of the Allia Hotels, André Monegaglia, mentor and main negotiator of the merger. According to him, the three chains are familiar, with regional performances that complement each other. And they do not have businesses that compete among themselves.
Altogether, the three chains that created the Allia, plan to have in four years, 100 hotels, with leverage of R$ 900 million (US$ 529.4 million) for the construction of the undertakings. Considering the amount for internal reforms of existing hotels, with preservation of the facade, the new group aims at attracting investment of R$ 1 billion (US$ 588.2 million) during this period. The amount of the contracts signed by the three chains with investors before the merger, leads to a total amount of R$ 450 million (US$ 264.7 million) in order to inaugurate 30 hotels until 2014.
With the creation of Allia, Monegaglia says that the goal is to attract additional R$ 450 million (US$ 264.7 million) for the construction of 30 undertakings over the next four years. Another R$ 100 million (US$ 58.8 million) will be applied to internal reform, preserving the facade of hotels in operation. The president of the Allia estimates that 70% of the earnings of the three chains is coming from three-star hotels aimed at the business segment, with daily rates considered economic, between R$ 200 (US$ 117.6) and R$ 300 (US$ 176,5) ("midscale" in the sector jargon). About 25% are affordable hotels and 5% super-affordable hotels. Bristol will concentrate its operations in Rio, Espirito Santo, Minas Gerais and Bahia. The focus of the Plaza Inn is in the Midwest region and the interior of São Paulo. The Solare, on its turn, will act more in the North and Northeast, except Bahia. São Paulo, São Paulo´s coast, Vale do Paraíba, Vale do Ribeira and the South region will be distributed in a shared manner by the three chains.