Commune Hotels & Resorts and Destination Hotels Announce Merger

The Scottsdale Resort at McCormick Ranch in Scottsdale, Phoenix

It seems as if 2016 could be the year of the merger. Commune Hotels & Resorts and Destination Hotels are the latest hotel management companies to announce that they will combine their boutique and independent hotels and resorts under one operator. The merger was completed last Friday.

The new company will preside over 90 hotels and resorts in seven countries with approximately $2 billion in total property revenue. Destination owns several independent resorts and hotels, including The Scottsdale Resort at McCormick Ranch in Scottsdale, Phoenix and Eden Rock in Miami Beach, Florida. Commune Hotels & Resorts manages Joie de Vivre Hotels, Tompson Hotels, tommie Hotels and Alila Hotels & Resort.

Destination and Commune will be based in Denver with offices in San Francisco, New York, Singapore and Shanghai. Robert Lowe, Jr. will serve as co-chairman of the two companies, alongside John Pritzker, who is the current chairman of Commune.

“We are thrilled to join with Destination. Their team and the Lowe family share our passion and commitment for offering locally relevant, unique and personal experiences to our guests, while also delivering strong financial results for our property owners,” said Pritzker.

Both companies operate with little overlap in their respective markets. Commune offers properties in major urban destinations across North America, Asia and Europe, while Destination has a substantial domestic portfolio of resorts in suburban locations. All properties will retain their individual brand aesthetics.

In the wake of new challenges and competition in the marketplace, hotel brands are increasingly seeking stability in the form of partnerships and mergers. Marriott International’s unprecedented $12.2 billion acquisition of Starwood Hotels and Resorts padded its portfolio with higher scale and growth. Last year, AccorHotels purchased FRHI holdings—the parent company of the Fairmont, Swissotel and Raffles brand. Carlson Rezidor is also exploring possibilities of a merger, partnership or sale of its struggling hotel division, which includes Radisson and Country Inns and Suites brands.

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