Starwood purchases Golden Tulip
06/17/2009|5:02:40 PM|4hoteliers

I think we’ll be seeing more of this in the near future – but on Friday Starwood Capital announced their intentions to purchase Golden Tulip Hotels.

This seems like it’s going to be a complete purchase of the company – management contracts, company owned hotels, and any future deals that Golden Tulip may be involved in consummating as the deal is completed.

The agreement has been made in principal and its expected to close by June 26th – a quick process which leads me to believe that this has been in the works for quite sometime. Once the closing occurs, Golden Tulip will be brought into the Louvre Hotel Group and make Starwood Capital’s Louvre Group the 11th largest Hotel holding company in the world.

Golden Tulip is a company that’s relatively unknown in America – their single United States location is in Bethsada, MD, and is nothing spectacular. The majority of Golden Tulip’s holdings are in Europe, and Golden Tulip has 260 hotels under the Golden Tulip and Tulip Inn brands.

The growth in the company seems to lay in the Tulip Inn brand – an mid-scale hotel, similar to the other three brands that make up the Louvre Hotel Group. Additionally, the press release infers that another great benefit of purchasing Golden Tulip is the benefits to franchise owners of both the Golden Tulip/Tulip Inn hotels and the existing Louvre Hotel Group franchise owners will get more bookings due to the geographically diverse hotels being within one hotel network.

Sounds like we could see the creation of a guest rewards card and the creation of global marketing teams which I don’t think really existed with these brands prior to this announcement.

With the news of the Crillon being placed on the market and Baccarat apparently going gangbusters opening new locations throughout China, Starwood Capital seems to be taking two different routes with their hotel businesses and keeping them completely separate: a luxury route (1 Hotel, Baccarat and (maybe) Crillon) and an economy/mid-scale route (Louvre Group).

But that also leaves out the Concord Hotel Group – mainly a management company of high end hotels.  I’d love to see their internal organizational chart as to how these different investments and varying growth makes sense to them.

I dont think this will be the end of Starwood Capital’s focus on acquiring existing hotel brands, especially since prices are low enough for assets to be purchased at great discounts vs. their real worth.