A revolution is both a major change that disrupts the established order and a complete reversal that brings us back to the starting point: these two dynamics are exactly what the hospitality sector has gone through in recent months. The COVID-19 crisis has profoundly disrupted the finances and economic hierarchy of hotel groups, confirming in particular the rise in power of certain Chinese players. However, Western companies have almost managed to get back to the valuation levels achieved in the pre-crisis period, and are still ahead of the game thanks to their financial strength. They have implemented different strategies to raise cash, and some have solid reserves preparing them for the future, where they will have to deal with some impressive new players.
2021 FINANCIAL RANKING OF HOTEL GROUPS: POST-COVID, THE REVOLUTION
The American giant Marriott keeps its title of global champion in the sector in terms of rooms (1.4 million worldwide), profitability ($1.1 billion adjusted EBITDA in 2020) and enterprise value (over $53 billion as at 1/1/2021). However, while Marriott unquestionably dominates this ranking, the group has seen its financial valuation level decline between January and December 2020 (-15%), a fact attributable to the financial storm triggered by the global COVID-19 pandemic.
The 2nd financial champion of the hotel industry, Hilton, is also American. Its enterprise value of $39 billion is also justified by a supply of more than one million rooms in 2020, and its valuation is almost twice as high as that of the #3.
But behind these two uncontested leaders, the financial hierarchy is changing. While most Western hotel groups have at best kept and more often slightly fell in value, Chinese operators such as Huazhu and Jin Jiang have seen their valuation levels surge in 2020, even though they had not particularly suffered in 2019 from the earlier onset of the epidemic on the Chinese market.
As a result, in the ranking of hotel groups by financial value, Huazhu has risen to the third place, ahead of IHG and Accor. Indeed, while Accor lost a quarter of its enterprise value in 2020, Huazhu’s business value almost doubled.
This rise is partly due to the acquisition of Deutsche Hospitality by Huazhu, but also to a considerable increase in the group’s supply (+22% compared to the previous year / +100K rooms) and various financial factors detailed hereafter.
In the same vein, Jin Jiang rose to 6th place, overtaking the US-based Hyatt, Wyndham and Choice, and approaching the symbolic threshold of $10 billion in value.
WHAT HAPPENED IN 2020 ?
The year 2020 has...
This content is for subscribers only. You have 80% left to discover.
Every week, the HON team brings you an expert look at the world of hospitality.
By becoming a member, you will have access to a complete ecosystem: exclusive content, jobs, etc.
BECOME A MEMBERAlready a member ? Login
