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Analysis

2017 Worldwide Hotel Market Report: what changes among global hospitality leaders? [1/3]

Explore our in-depth analysis of the top 12 global hospitality leaders: what are the key drivers of their respective dynamics? Which brands are booming, and with what impact on groups' rankings?

For more information, see the second and third parts of this article.

1 - Marriott International

Supply change: +5,5% - # of hotels, 2017: 5 ,997 - # of rooms, 2017: 1,169,902

Marriott International confirms its leadership position worldwide after the merger with Starwood Hotels. Today it is the only group exceeding a portfolio of one million rooms and it is now pursuing organic growth of its brands which reached +5.5% between 2016 and 2017. Figures for the first quarter 2017 confirm the importance of the merger with a strong increase in operating income, notably thanks to higher management and franchise fees (+67%). The first-quarter RevPAR is up by more than 3% worldwide, with peaks higher than expected in North America, Europe and Asia. For the President and CEO, Arne Sorenson, the big challenge today is the integration of the 6,000 hotels under brand names, and especially loyalty programs that justified the merger to increase inter-brand cross-marketing. It apparently takes more time and energy to successfully interface the 30 brands involved.

2 - Hilton Worldwide

Supply change: +6,0% - # of hotels, 2017: 4 ,875 - # of rooms, 2017: 796,440

Hilton Worldwide is also strengthening its second place with solid organic growth by 6% mainly due to its Hampton Inn, Double Tree and Garden Inn brands. Three major events took place in 2016: the spin-off of the timeshare business and the creation of a lodging REIT, which generate cash, and the acquisition of a 25% stake by HNA, a Chinese group that already owns Carlson Hotels and is NH Hotels’ reference shareholder. The future will tell if a joint project is possible. Meanwhile, Hilton is also embracing generational brands with the opening of the first Tru by Hilton for youth, Curio for Lifestyle fans and the Tapestry Collection for those seeking personalized luxury. The pipeline is still actively filled with 360,000 rooms, including nearly half under new construction. 

3 - IHG

Supply change: +3,0% - # of hotels, 2017: 5,174  - # of rooms, 2017: 767,135

IHG is no longer leading the way. The British group is even on the unofficial list of hotel groups for sale, arousing the interest of Chinese investors and even AccorHotels group, according to rumors. A new team is taking the lead with the departure of Richard Solomons, CEO and former CFO, replaced by Keith Barr, current SVP sales: a salesman succeeds a financier. All disposals of assets have been executed, so his role is to lead a group that focuses on management and franchising. Priority is given to the roll-out of new brands outside the US, such as Kimpton and Even, and the pursuit of franchising in new territories. IHG has signed a record number of contracts since 2008, with 230,000 rooms in the pipeline, 90% concentrated in the 10 priority markets. In the absence of being bought by Chinese, the group relies on this clientele by adopting their payment system and installing flagship brands like Hualuxe.

4 - Wyndham Hotels Group

Supply change: +2,9% - # of hotels, 2017: 8,035 - # of rooms, 2017: 697,607

Wyndham Hotel Group wants to pursue internationalization by focusing on its presence in Europe, Africa-Middle East. After the acquisition of Tryp by Melia and Dolce, it is looking at other regional opportunities to complete its positioning. The pipeline includes nearly 140,000 rooms, 60% of which are outside the United States and 67% under construction, with a focus on Ramada and Super8, and markets where it already has a cluster: the United Kingdom, Germany, Turkey and India. The hotel group benefits from the other two branches : time share and exchange.This makes it possible to design mixed-use projects, combining hotel, hotel residences and villas, in the same deal to attract investors. For the year 2016, Wyndham, unlike its main competitors, failed to capitalize on the US recovery and ended the year with mixed financial results. The year 2017 continues in the same vein with a stable first quarter performance and a pipeline that remains unchanged for the time being.

5 - Jin Jiang Hotels

Supply change: +8,4% - # of hotels, 2017: 5,977 - # of rooms, 2017: 602,350

Jin Jiang International has stabilized its business after significant growth in recent years. The Chinese group is integrating its various subsidiaries: Louvre Hotels, Plateno and Vienna; it is trying to focus development on midscale and upscale brands. In addition, chairman Yu Minliang entrusted Pierre-Frédéric Roulot with the keys to the management company, Metropolo. Organic growth remains strong on a market that continues to expand with properties that meet international standards. 2016 saw the arrival of the first Campanile in China. It will be followed in Shanghai by the new Golden Tulip concept, with each property being the first link in a future network of several dozen or even hundreds of hotels. The question of minority shareholding in the AccorHotels group is still pending. The timing for ramping the group up is no longer in the news much given the exchange control imposed by the Government. The pause is likely to be short-lived, given the ambitions displayed and the recebnt purchase of an Indian group, Sarovar.

If you wish to access the complete file, find the entire 2016/2017 worldwilde hospitality report on our store.

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