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Marriott adds SEVEN hotels in Barbados as it buys Elegant Hotels for £100m

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If you enjoy visiting Barbados, Marriott Bonvoy may just have got a lot more attractive for you.

The hotel group, which owns 30 brands including Sheraton, St Regis, Ritz Carlton, JW Marriott, Renaissance and a whole lot more, has just announced its purchase of Elegant Hotels Group.

Marriott buys Elegant Hotels

Elegant Hotels has seven properties on Barbados, six of which are on the more attractive west side on what is called the ‘Platinum Coast’.  There is also one hotel in St Lucia, The Landings, which does not seem to be included in the deal.

Assuming there are no competing bids, the acquisition will cost Marriott just over £100 million, which was a 57% premium on the existing share price.  Including net debt, the enterprise value is around £150m.  Despite having most of its assets in Barbados, Elegant was UK based and listed.

Marriott buys Elegant Hotels

Marriott has been very clear about its plans for the group:

The hotels will be renovated 

The hotels will be rebranded under existing Marriott brands, operating on an all-inclusive basis

The hotels will be re-sold, with Marriott retaining a long-term management contract

It is a clever strategy in theory.  Marriott could make an immediate profit on its expenditure if the hotels are re-sold well (they should be worth more if sold individually, since fewer investors have the appetite for seven assets in the same market) and it retains long-term revenue from the management contract.

Marriott buys Elegant Hotels

More importantly, it gains seven hotels which – despite adding just 0.1% to the global hotel count – will make Marriott Bonvoy disproportionately more attractive as a scheme in which to earn points.  

The deal also jump-starts Marriott’s new move into the all-inclusive sector which, again, it sees as a key selling point for Bonvoy.  It believes that many loyalty scheme members are put off from redeeming at luxury hotels, even if they have enough points, due to the high cost of food and drink and that this can become a real differentiator.

The seven hotels have 588 rooms in total.  They are Colony Club, Tamarind, The House, Crystal Cove, Turtle Beach, Waves Hotel & Spa and Treasure Beach.  The beachfront Barbados restaurant Daphne’s is also included in the deal.

PS.  One thing that intrigues me about this deal is the price.  The hotels are all freehold and they are in the best locations in Barbados.  The cost, however, is only £250,000 per room.  Given the exceptionally high cost of property in Barbados, you would assume – if the Government would allow it – there would be substantially more profit in knocking 4-5 rooms together and creating multi-million $ multi-room beachfront apartments.

Marriott buys Elegant Hotels

How to earn Marriott Bonvoy points via UK credit cards

As a reminder, there are various ways of earning Marriott Bonvoy points from UK credit cards.  Many cards also have generous sign-up bonuses!

Do you know that holders of The Platinum Card from American Express receive FREE Marriott Bonvoy Gold status for as long as they hold the card?  It also comes with Hilton Honors Gold, Radisson Rewards Gold, Shangri-La Golden Circle Jade and Melia Rewards Gold status.  We reviewed American Express Platinum in detail here.

Click here to read our detailed summary of all UK credit cards which earn Marriott Bonvoy points.  That page is regularly updated with the latest special offers and will still be accurate even if you are reading this article months after publication.

(Want to earn more hotel points?  Click here to see our complete list of promotions from the major hotel chains or use the ‘Hotel Promos’ link in the menu bar at the top of the page.)

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Comments

  1. If you look at the EHG share price it was one of the most direct losers from the Brexit referendum: essentially their costs are in USD and their customers/revpar is in GBP.

    Their answer was to try and market Barbados to US customers but they had limited success. Marriott are clearly better placed to do that. Losing a management contract recently and then Thomas Cook may have been the last straws for its independence.

    • What is interesting is that, as you know, Barbados is VERY UK focused. The only flights from Europe are BA and VS (Eurowings did a trial this year from Germany, let’s see if it sticks). It is quite a big bet, unless Marriott thinks it can attract more US guests.

      • Agreed..
        Been going since ‘83 and it’s really not a big US destination. The flight schedules for the US market do not help either.
        Lots of Canadians though.
        Will be interesting to see what they do with Treasure Beach, House and Daphnes. The others are not relevant.

  2. Roberto says:

    Like Rob I was shocked at how low the sale figure was when looking at land costs in Barbados. Its one of the few places we return to anually and I am always amazed at price of beachfront properties on the west coast.

    I know most of these resorts and thier footprints are huge, I suspect the future development potential on just one or two will go a long way to paying for the remainder.

  3. TGLoyalty says:

    Marriot also recently bought the W Union Square in NYC to refurb and show off their Vision of W in the future.

    I know they have bought, transformed and sold Edition properties before but they seem to be taking more of an SPG direction to adding properties to their group. Maybe influence from a few post merger staff?

    • I was more surprised by W NYC. That is not really strategic, in my view, and it is far more money than they are spending here.

      • TGLoyalty says:

        Headline purchase price vs total cost of refurbishment. From comments these properties might take a lot of investment to bring them up to a high standard.

        Perhaps these Barbados properties have restrictions on what they can be used for and therefore $m villas aren’t an option?

        • Almost certainly. Economically, villas are a bad deal for the country – they may sit empty much of the time and the residents will spend less (on average per day) than a tourist.

  4. Peter K says:

    I stayed at Turtle Beach (on the South coast) a couple of years ago and was not overwhelmed.
    Having said that under new management things may improve significantly.

  5. My husband would be happy to go to Barbados for every long haul holiday we do. I keep reminding him that it will still be a good option when we are 80 so for now lets try some other places. So we are off to Cambodia at the end of November using a 241 to KUL.

  6. Unsavage gerbil says:

    You are assuming you get to 80

  7. Graham Walsh says:

    Currently at the Treasure Beach Hotel, 35 or so rooms, adults only. Lovely place, staff know you by name, on a B&B rate and booked via Virgin Holidays. Flights were Lloyds Amex vouchers, I wouldn’t want AI, we did consider, but there are hundreds of restaurants to visit. I did hear Elegant only purchased this hotel a few years ago, was previously family owned. Right next door to the Tamarind. Would certainly come back here, although not on an AI rate, so much nicer to explore.

    • Steve-B says:

      Interesting, we went there a opulent of years ago and really didn’t rate it – lacked atmosphere and needed refurbishment in places. Also breakfast was particularly poor. Maybe things have improved!

  8. Lady London says:

    Why do people go to Barbados? And if someone would choose to have their holidays in Barbados, what other places around the world would they also be considering ?

    • It’s your relatively standard Caribbean Island, but one where everyone is English speaking, the crime rate is relatively low, the position of the West Coast creates very calm water, things ‘work’ (water, electricity, healthcare), there are disproportionately good hotels compared to many Caribbean places and there are no hurricanes (I think it is 50 years since it got hit).

      And you can fly there directly from the UK, which is a problem for some of the other niche islands like Curacao etc.

      If you have no interest on going to a resort where more than 50% of the guests are British, however, then give it a miss. But that’s how the Caribbean works – the Bahamas will be 50%+ American, Dutch Antilles / St Martin will be 50%+ Dutch etc. Those old colonial ties still hold.

      • Lady London says:

        Sounds like good reasons for picking it. Especially with children, due to relatively secure environment.

        Thanks, Rob.

    • Reason for picking here (compared to Dubai this time last year) is that I’d never been to any of the Caribbean and Barbados seems to have the most to do. Safe and easy to get around. Other considerations for next years holiday this time of year would be Mauritius maybe. Like to experience difference places. Also need to do a safari at some point too.

  9. I’ve travelled to BGI every year for the last 6 years. I got married at the Crystal Cove just over a year ago, purely for the convenience of managing the event and 40 guests. I generally prefer a villa in Barbados, but with points I’d seriously consider an Elegant hotel again, especially for Cropover.

  10. Traveller says:

    Property prices in Barbados have fallen in last few years. Many properties on West Coast have remain unsold. Barbados tourism has been falling. Infrastructure is failing especially in the highly populated South coast and much developed where sewage was leaking into the streets. The Government have tried to maintain infrastructure ion West Coadt, but even Holetown had foul water leaking into the streets. Final blow has been sargassum seaweed covering and remaining on East and South Coast beaches. The West coast has remained clear of the seaweed. Barbados has had a tough time and the Government have given Sandals Resorts tax incentives to develop some of the older island hotels. Suspect Marriott will have the same tax advantages.

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