The ACCC has recognised the fragmentation and diversity of the market for short-term accommodation services in Australia by not opposing the acquisition by AAPC Limited (Accor) of the Mantra Group Limited (Mantra), in a decision made on 8 March 2018.

This is the link to the ACCC media release and the Assessment.

The Transaction

Accor is a wholly owned subsidiary of Accor S.A., one of the world's largest hotel and tourism groups. Its business is mainly focused on hotel-style accommodation. Its brands include Sofitel, Novotel, Mercure and ibis. It has 200 properties in Australia.

Mantra is an Australian accommodation operator. Its focus is on serviced apartments, which it offers through its Peppers, Art Series, Mantra and Breakfree brands. It has 125 properties across the Asia Pacific region.

Both have a large number of properties in certain holiday destinations in Queensland. Both supply hotel management and related services to property owners and developers.

The market definition adopted by the ACCC and the competition analysis are relevant to mergers and acquisitions in the accommodation industry. They are:

Market Definition

The ACCC did not reach concluded views on market definition, but its review focused on the supply of short-term accommodation services (including traditional hotels, serviced apartments, larger multi-room apartments and motels) on a location-by-location basis.

The ACCC also considered competition at a broader geographic level, including nationally. While short-term accommodation providers compete in local areas to attract visitors, short-term accommodation chains can offer benefits to customers choosing to stay in accommodation belonging to a larger network and there are some multi-locational arrangements between some corporate customers and specific hotel chains.

The ACCC also considered the possible effects of the proposed acquisition on the supply of hotel management services, such as leasing, management letting rights (MLR), franchising and related services to property owners and developers at a national level.

Competition Analysis

The ACCC concluded that the proposed acquisition was unlikely to substantially lessen competition in any relevant market.

While being part of a national or multi-regional network or chain may provide some advantages, the ACCC found that competition occurred predominantly at a local level and that multi-locational arrangements between specific hotel chains and corporate customers are generally not exclusive.

The ACCC found that the combined firm would continue to face competition from a number of alternative providers, including other international and national hotel chains as well as many independent hotels and accommodation providers.

As regards hotel management services, the ACCC concluded that the combined firm would continue to face competition from a number of alternative providers, including other national and international hotel chains.


 The estimated combined market share of 15% is clearly too low to cause the ACCC to order the disposal of properties in areas of Queensland where the combined group will have market power.

 The fact that the groups have different focuses, Accor in hotel-style accommodation and Mantra in serviced apartments was not a factor, because the ACCC adopted a market definition of the supply of short-term accommodation services which encompassed both.

 The hotel industry in Australia is highly fragmented, and faces vigorous competition not only from international and national hotel chains, independent hotels and accommodation providers, but also from shadow, unregulated hotel / short-term letting operators who use booking platforms such as Airbnb and Stayz