Fermain hotel deal given green light by competition regulator

The deal – approved by the Guernsey Competition and Regulatory Authority – gives the Hand Picked Hotels group approximately 30% of market share across the island.

‘The GCRA has determined that the proposed acquisition will not lead to a substantial lessening of competition in any relevant market and therefore approves the notified transactions,’ said the authority.

Hand Picked Hotels – owner of the four-star St Pierre Park Hotel and approximately 18 other locations across the UK and Jersey – announced the purchase earlier this year of the four-star Fermain Valley Hotel, three-star Ziggurat Hotel and the former Ambassador Hotel and former Chalet Hotel.

GCRA guidelines indicate that it is unlikely a business will dominate an industry if its market share is below 40%.

‘Applying the relevant market definition by hotel room capacity, the top three- and four-star hotels returns a post acquisition market share of about 30% for the purchaser,’ GCRA said.

‘In addition, although the purchaser will have an appreciably larger market share than the next competitor post-acquisition, there remain a number of significant players within the relevant market which will have the potential to moderate any anti-competitive actions by the purchaser.’

Post-acquisition, GCRA estimated the purchasing group would hold approximately 30% of market share.

The next closest competitors are Sarnia Hotels Guernsey with 14% and Red Carnation Hotels with 12%.

The purchasing contracts were drawn up earlier this year, but no sale price was given. However, the Fermain Valley Hotel was listed with commercial estate agent Colliers International in 2018, appearing as under offer on its website for £7.25m.

Hotel Ziggurat was listed with the same agency for £2.45m. in 2018.