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Analysis

A look at a year of consolidation in the hotel industry

Marriott and Starwood, Accor and Fairmont Raffles, Wyndham and Dolce, Jin Jiang and 2 other Chinese groups... mergers between international hotel groups multiplied in 2015. A look at the main changes.



After an outstanding 2014, 2015 also posted its share of announcements that graced hospitality columns. Most of the hotel groups in the Top10 worldwide made headlines over the past two years following the acquisition of another group. While Jin Jiang had already taken over Louvre Hotels Group in 2014, and IHG Kimpton, the trend towards the consolidation of hospitality players got stronger in 2015.


The most important acquisition this year was certainly Starwood Hotels & Resorts by Marriott International, which kept the international press on its toes for a while. Respectively 3rd and 7th in the global ranking of hotel groups in terms of number of rooms (published by MKG Hospitality) prior to the merger; together they are the biggest player worldwide, with more than a million rooms. The two entities also climb in the European ranking to reach 4th rung. Through this strategic move in 2015, Marriott imposed itself as a new world leader and strengthened its position on markets outside North America where it was not so strong. With the takeover of Delta Hotels & Resorts, the world leader also strengthened its position in Canada: 2015 was a very busy year for the group from Bethesda, Maryland.

Jin Jiang once again displayed voracious appetite. After taking over its compatriot Vienna Hotels Group (not to be confused with the Austrian Vienna International), the Chinese group bought another of its fellow citizens Plateno Group. Already reinforced by the acquisition of Louvre Hotels Group in 2014, Jin Jiang now holds seventh place in the global ranking of hotel groups, to close in on 500,000 rooms under operation (excl. pipelines); this figure should surpass that benchmark in 2016. For Jin Jiang, after a peak in international M&A activity in 2014 with the takeover of Louvre Hotels, acquisitions in 2015 were concentrated on its domestic market, allowing it to further strengthen its global footprint.

Another major operation is that of the upscale group Fairmont Raffles Hotels International bought by AccorHotels, which caused a bit of a surprise in the sector. Although it did not significantly upset the European ranking (AccorHotels remains leader) and only slightly the global ranking (AccorHotels rose to 5th place from 6th place), it does have a more significant impact on the international ranking of upscale and luxury players, where AccorHotels climbed three rungs to join the leaders. This is where the French group's primary interest lied, as this operation enabled it to strengthen its position on a segment that is particularly dynamic and where it previously had less exposure.

And AccorHotels' acquisition of Fairmont Raffles Hotels International is not the only change in the global landscape of the upscale and luxury hotel industry: Wyndham Hotels Group took over Dolce Hotels & Resorts, which also strengthened its supply of hotels under management contracts, a new strategic focus for the group.

Many players in the Top10 made successful M&A deals in 2015 (or late 2014, when IHG bought Kimpton Hotels); actually the ones that stand out are the ones that did not do any strategic operation recently. In a context where competition from new forms of accommodations and OTAs is gaining more ground each year, and economies of scale play an increasingly important role, but in which stock markets are feverish as the year begins, can we expect the consolidation of the hotel industry to continue in 2016?







Also read:



  • Marriott announces the acquisition of Starwood Hotels group
  • AccorHotels acquires FRHI Hotels & Resorts
  • Wyndham Hotel Group Acquires Dolce Hotels and Resorts
  • Jin Jiang, Plateno and Starwood, a new global hotel giant?
  • Jin Jiang completes the purchase of Groupe du Louvre for €1.3 billion
  • Jin Jiang to buy 80% of Chinese group Vienna Hotels and gain 60,000 rooms

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