Analysis

Global Hotel Ranking – Top 10: what does the future hold after the Marriott-Starwood merger

The acquisition of American group Starwood Hotels & Resorts by Marriott International should be finalized today after their respective shareholder meetings: the operation is another addition to the list of M&As recently undertaken by leading hospitality groups, such as AccorHotels and Jin Jiang. What consequences will these mergers have on the Top 10 hotel groups for 2016, on both a global and European scale? 

2016 Top 10 hotel groups worldwide, before and post-M&A

Prior to this operation, worldwide rankings had already changed from 2015. Previously ranked first, British operator InterContinental Hotels Group was downgraded to third position. American group Hilton Worldwide now leads the pack, with 751,350 rooms as of January 2016. Marriott International takes second place, expanding its supply with 44,624 additional rooms across 2015 to reach a total of 746,523 units as of January 2016.

After months of negotiating and raising stakes, Marriott International finally acquired Starwood Hotels & Resorts - the seventh global hotel operator in terms of rooms. Integrating 362,329 rooms of its American counterpart's portfolio, Marriott becomes the first hotel group to pass the 1-million rooms mark (1,108,852 rooms). After this merger, the group becomes the leader in the global ranking - ousting its predecessor Hilton from that position.

Other M&A operations also shook up the other members of the Top 10. Ranked 10th in 2015, Chinese group Jin Jiang climbs up to the 5th position after absorbing local groups Plateno and Vienna Hotels Group (based in Shenzhen - not to be confused with Austrian group Vienna International); these operations brought an additional 275,637 rooms to its portfolio. The operator overtakes French group AccorHotels, now in 6th position. AccorHotels recently acquired FRHI (43,000 rooms), strengthening its upscale supply. Further down, American groups Choice Hotels and Best Western both lose ground despite an increase in room supply. They were shifted out of place by the fast pace of Chinese groups Home Inns (+25,727 rooms) and Huazhu - the latter which entered the Top 10 with an additional 68,888 rooms compared to 2015.

In the European Union, the merger between Marriott International and Starwood Hotels & Resorts also altered the Top 10. In 10th position in 2015, Marriott climbs to fourth spot in 2016, with the addition of Starwood Hotels & Resorts' portfolio of 33,009 rooms. Its European supply reaches 82,845 rooms, outdistancing Jin Jiang in fourth place despite the takeover of Louvre Hotels Group. However the Top 3 was not affected by these various M&A operations: AccorHotels keeps the lead with 276,736 rooms in the European market, far ahead of IHG and Best Western with around 90,000 rooms each.

According to Georges Panayotis, CEO at MKG Group, "The historical global leaders, especially including Marriott and Starwood, are consolidating their positions to face the rapid emergence of Chinese competitors. After years of calm, the race for growth has been rekindled, and Marriott takes it to the next level by passing the 1-million rooms mark."

2016 Top 10 hotel groups in the European Union, before and post M&A