Commune, Destination merger creates scalable boutique operator

The Wall Street Journal is reporting that Commune Hotels & Resorts, which includes the Thompson Hotels and Joie de Vivre brands, and Destination Hotels have completed a merger, bringing together 92 hotels in seven countries with about $2 billion in property-management revenue.

Neither the total value for the new company nor the ownership structure was disclosed, but the combined entity will reportedly be based in Denver, where Destination has its headquarters.

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The new company brings together private-equity executive John Pritzker, owner of Commune, and Robert Lowe, CEO of real-estate firm Lowe Enterprises, the parent company of Destination.

The combination also gives the company properties in both city centers (Commune) and resort locales (Destination).

"It was a natural thing to ask what we can do if we came together," Niki Leondakis, the current CEO of Commune, told The Wall Street Journal.

Leondakis' work with the new, yet unnamed company will focus on property management, while Destination President Jamie Sabatier will be in charge of integrating the two companies and corporate operations. There still has been no decision on who the CEO of the new company will be.

The merger comes at a time of consolidation within the hospitality industry. In November, Marriott International agreed to pay more than $12 billion for Starwood Hotels & Resorts Worldwide; last month AccorHotels agreed to acquire FRHI Holdings, which includes the Fairmont Hotels brand, in a deal valued at more than $3 billion; and, today, Carlson said it was exploring options, including a possible sale or merger of its hotel company, Carlson Rezidor Hotel Group.

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