“The Chinese are to account for an increasing portion of both the supply and the demand side of the worldwide hotel industry. Indeed, Jin Jiang’s takeover of Louvre Hotels Group and just recently of Plateno Hotel Group has created one of the biggest hotel groups in the world.”
Key findings
The mergers and acquisitions (M&A) arena is reaching a fever pitch as both single-asset and chain transactions are on the rise. In November 2015, Marriott International agreed to acquire Starwood Hotels & Resorts, which will result in creating the largest hotel company in the world by the time the deal closes in mid-2016. Jin Jiang, the leading Chinese multi-brand hotel group, has been on a shopping spree, acquiring Louvre Hotels Group (LHG) early in 2015 and then the Chinese chain, Plateno Hotels, in October, thus creating one of the biggest hotel groups in the world.
There are also rumours that Hyatt may be taken private. InterContinental Hotels Group (IHG) acquired the Californian boutique hotel group Kimpton in late 2014 and now IHG itself may be taken over or merged with another hotel group. AccorHotels has agreed to purchase FRHI (Fairmont Raffles Hotels International) Hotels & Resorts, which includes the Fairmont, Raffles and Swissôtel chains. A prominent single-asset transaction was Hilton’s sale of the iconic Waldorf Astoria in New York for US$1.76 billion to Chinese interests in February.
In spite of the opinions of some pundits who foresee the demise of brands, the proliferation of new brands has continued unabated in recent years and has even accelerated in recent months – both from new independent groups and the big international chains. Now every large multi-brand chain needs a lifestyle/boutique offering – maybe two (one midscale and one luxury) and a soft brand to affiliate independent hotels.
The online travel agents (OTAs) are likely to be increasingly squeezed in the future by the introduction of ‘instant booking’ of hotels on the TripAdvisor and Google platforms, which enables both customers and hotels to bypass other intermediaries. The ongoing spread of hotel chains will also reduce hotelier dependence on the OTA channel.
While some executives of major chains minimise the threat of accommodation rental platforms like Airbnb, several hotel groups are, nevertheless, taking steps to adapt themselves to the ‘sharing economy’. Hotel frequent-guest schemes will probably have to adapt their offers to a new generation of Millennial travellers who demand quicker rewards.
This report looks at the following areas:
What issues are currently impacting the worldwide hotel sector?
What are the latest developments in the area of M&A for the hotel sector and who are the main investors?
What new hotel brands have been launched recently?
What are the key trends and who are the main players in hotel distribution?
Which are the leading hotel groups and what are the strengths, weaknesses, opportunities and threats for each one?
Which are the leading hotel groups by major country market?
