Merger Creates Fairmont Powerhouse

SAN FRANCISCO? Within 90 days of closing its merger on Oct. 12 with Canadian Pacific Hotels (CPH), the new Fairmont Hotels & Resorts entity expects to add two major hotels to its portfolio in the United States, said Lew Wolff of Maritz Wolff & Co., which owns a portion of Fairmont Hotel Management L.P. One of those will likely be the Miramar hotel in Santa Monica, CA, which Maritz Wolff recently purchased for $90 million (see story in HOTEL BUSINESS?, Oct 21). The other is said to be in the Midwest, and will also be owned by Maritz Wolff, said Wolff. ?Right off the bat we are showing the new strength of Fairmont,? Wolff said of the growth push. Fairmont consisted of just seven luxury hotels in early 1999, but, thanks to the merger as well as acquisitions, will total at least 40 by the time the year rings out, he said. The merger combined Fairmont?s seven luxury properties with Canadian Pacific?s 27-hotel portfolio. The immediate addition of new hotels to the Fairmont brand is a tribute to the seamless combination of the like entities, according to Ed Mace, executive vp/Americas for Fairmont Hotels & Resorts. ?They [Fairmont and CP] have so much in common? with the size of their properties and a heavy group component? it really made for a cohesive merger,? he said. Toping the list of goals is a ?relaunch? of the Fairmont Hotels brand, with an updated logo and national advertising campaign that will highlight its position as the largest luxury hotel management company in North America. Both were launched in October, just after the merger was completed. Buys for the advertising campaign will include both print and television. Print advertisements will appear in the Wall Street Journal, USA Today, The New York Times, Los Angeles Times, and The Chicago Tribune, among others. This month ads will also appear on national cable television including CNN, The History Channel, The Travel Channel, The Weather Channel and the Discovery Channel. Spot television in New York City will include the three major networks and Fox. Also a high priority is an aggressive push for additional Fairmont properties in key cities in the United States, a move that is being led by Mace. ?We have plenty of room to grow in the United States,? said Mace. ?We?re going to key gateway cities like Washington, Atlanta and Los Angeles,? he said. The deals will be a combination of both selective acquisitions and management contracts. ?There are even a few places where new developments would work, so we are also looking into that,? he said. ?There are a lot of places we don?t have hotels in the United States,? said Wolff. ?We will try to use our international component to help grow in North America,? he said. As previously announced, all seven Princess hotels previously owned by Canadian Pacific are being rebranded Fairmont hotels. As for the Canadian Pacific brand name, ?It has equity in Canada so we will continue to use it in the Canadian marketplace as part of the Fairmont Hotels and Resorts brand,? said Cahill. Existing Canadian Pacific hotels will retain their names for now, however they will be designated as Fairmont hotels, with that name being added to each. The company is currently contemplating whether or not it will phase out the Canadian Pacific name in the future. Wolff said he thinks it will eventually disappear. It was confirmed that any new projects in Canada going forward will bear only the Fairmont name. Cahill said that this strong push is all about ?showing our size and getting the brand name out there,? so people understand the company?s new leadership position in luxury hotel management. Other internal goals have been set at Fairmont as well. The national sales team of both companies is being combined for a total of more than 47 international sales personnel. Later this year, the reservations systems will be fully integrated and a GDS and travel agent component will be available. Currently, operating standards from both companies are bein