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Global hotel ranking 2019: who are the industry's supermajors?

Positions of traditional groups in the ranking are being upset by innovative Asian players that are climbing the ranks through acquisitions.

Methodology

The figures published in this survey come from the MKG database, the number-one supply database worldwide and the largest performance database worldwide, outside the United-States. Supply figures in this report have been also obtained from groups’ key executives from the MKG database or from the MKG database or from official sources of the chains concerned (chains’ documents & websites, SEC filings…).

10. BTH HOTELS Home Inn

A subsidiary of the BTG Hotels conglomerate (Beijing Tourism Group), the group plans to develop its high-end NUO Hotel brand more internationally. Some 15 hotels could open in world capitals such as Moscow, Rome and Singapore. The aim is to have a hotel in every major city worldwide so that citizens of the Middle Kingdom can be accommodated in hotels that meet the highest Chinese standards when travelling abroad.

In the meantime, NUO Hotel has collaborated with Lausanne Hospitality Consulting and created an academy to train its staff in the areas of talent development, executive training, branding and hotel management. Every year, the hotel sends two students to Switzerland for training and it has developed a certification system for its employees.

The Home Inn Chain (China), a wholly-owned subsidiary of the group, signed a joint venture agreement at the beginning of the year with its partner China Hyatt Ltd. in Shanghai. The two entities Home Inns and Hyatt Hotels and Resorts could create a new hotel brand as part of the joint venture to target the mid- to high-end market and to meet the changing needs of the younger generation of Chinese tourists.

The joint venture aims to develop a cooperation between the two companies to leverage Hyatt's expertise in high-end hotels, as well as the Home Inn group's network in the Chinese market.

 

9. Huazhu Hotels Group Huazhu

While from a development point of view of its offer Huazhu has had a good year, the security of its IT data has been a challenge for its teams. It reported that nearly 500 million pieces of information relating to its customers had been hacked, marking a major blow to the hotel brand operator in China, including properties belonging to AccorHotels group.

Huazhu also announced that its subsidiary Huazhu Hotel Management has entered into share transfer agreements with Beijing Tsingpu Travel Culture Development and Suzhou Tiancheng Jiaqi Tourism Industry Investment, two shareholders of Blossom Hill Hotel Investment Management to acquire 71.2% of the outstanding shares of Blossom Hill. The latter is a boutique hotel operator founded in 2009, with its origins in Lijiang, Yunan province. As of May 31, 2018, it had 21 hotels and 575 rooms in operation, covering 10 tourist cities in China.

"We see this acquisition as a win-win combination for Huazhu and Blossom Hill: with the addition of Blossom Hill Hotels & Resorts to our hotel portfolio, we are able to offer more diversified choices to our 100 million HUAZHU Rewards members; at the same time, this acquisition should also improve Blossom Hill's occupancy rate," commented Jenny Zhang, Huazhu CEO.

 

8. OYO OYO

Ranked 25th worldwide last year, OYO climbed to 8th place in the ranking using a different growth model.

Its model was born from the observation of its founder Ritesh Agarwal, out of a need to structure and make the offer in India more reliable. To do this, he suggests hotel owners upgrade rooms in their hotels to OYO standards, and rent them via the application that is very popular in India (downloaded more than 10 million times).

OYO now wishes to shift into higher gear and aims for global expansion with a fleet larger than Marriott's. Support from investors such as SoftBank Group (which has invested in Uber and Wework), Lightspeed India, Sequoia, Greenoaks Capital, Hero Enterprise and China Lodging Group offers India great opportunities for growth, which has raised $450 million (382 million euros) since its inception in 2013.

To break into new segments, the Indian is attacking the mid-range with OYO Town House and the high-end with the Palette brand. It is also entering the housing market with OYO Living, a concept dedicated to millennials and holiday rentals with OYO Home and apartments with OYO SILVERKEY.

Finally, it is entering the British market with an aim to have more than 5,000 rooms available by 2020. OYO's first openings will take place in London with four properties followed by other cities, including Manchester, Birmingham, Glasgow and Edinburgh.

 

7. Choice Hotels Choice

The American group launched a midscale brand: Clarion Pointe. This brand takes its inspiration from among the group’s franchisees who were looking for a new brand that could inject a breath of fresh air into their property. “Contamporary design accents” will be introduced to the hotels and The Coffee Bean & Tea Leaf beverages will be offered to guests.

At the beginning of the year 2018, Choice acquired WoodSpring Hotels SM Holdings LLC, a holding company of Lindsay Goldberg Suites for around 231 M$. The acquisition will make it possible to add nearly 240 extended-stay hotels in 35 states to the portfolio of Choice Hotels, thereby creating a network of more than 350 properties worldwide with preexisting brands such as MainStay Suites and Suburban Extended Stay. If, thanks to this acquisition, the American group is able to find a new growth relay, it will have to manage the arrival of new competitors on its market such as the Chinese operator GreenTree.

 

6. AccorHotels AccorHotels

Thanks to proceeds from the sale of AccorInvest, the group has shifted its focus to acquisitions with the leading group in Australia Mantra Group (€830 million), the South African conglomerate Mantis (50%), the Swiss Mövenpick Hotels & Resorts (€482 million), the Polish company Orbis and the Chilean company Atton Hoteles.

In June, AccorHotels acquired 50% of the American operator sbe Entertainment Group, which manages and operates hotels, residences, restaurants and discos. With the ambition of opening 10 sbe properties in Mexico within five years, they also launched a new high-end brand in 2019: The House of Originals.

AccorHotels and Luneng Group have announced a partnership to expand their offerings in China. This new alliance will aim to develop the group's high-end and luxury brands, such as Fairmont, Raffles, Sofitel as well as MGallery and Orient Express or The Sebel, which is currently located in only Australia and New Zealand.

Finally, AccorHotels announced the upcoming opening of its first Orient Express address in Bangkok's iconic skyscraper: The King Power Mahanakhon Tower. The Orient Express Mahanakhon Bangkok will offer 154 rooms and a floor entirely dedicated to well-being.

 

5. Wyndham Hotels and Resorts Wyndham

In China, Wyndham announced it had reacquired direct franchising rights for its Days Inn brand in China where it operates close to 12,500 rooms. Individual franchise agreements with owners of Days Inn hotels in China have thus been transferred to the Wyndham Group. The American group also indicates that all royalties from Days Inn franchisees will be paid to Wyndham directly. Wyndham has thus become the exclusive franchiser of the Days Inn System in China.

Wyndham Hotels & Resorts signed a franchise agreement with the State Bank of Texas to develop 10 hotels in the Midwest and Northeast of the country like the first Wingate by Wyndham in Nashville (123 rooms). 

Finally, Wyndham Destinations is the new name of Wyndham Worldwide Corporation. It also announced its completion of the break with Wyndham Hotels & Resorts to become “the biggest vacation property and exchange company worldwide.”

 

4. IHG IHG

IHG continued to grow (+5.6%) during a year of acquisitions and development of its new brands. Thus the first avid hotel opened its doors in the United States in Oklahoma City (87 rooms) and Elie Maalouf, CEO Americas of IHG states about the economic brand: "The strong momentum of avid hotels, with more than 130 hotel agreements already signed in the United States, Canada and Mexico, firmly positions the brand as a long-term growth driver for IHG in the Americas. »


The voco brand, launched in June, was presented to investors. It would be a way for IHG to accelerate hotel conversions and its teams aim to reach a supply of 200 properties in 10 years' time around the world. Five hotels have already been opened around the world under the voco brand: two in Australia and three in the United Kingdom. The birth of new hotels is expected soon as four hotels purchased this year in the United Kingdom by Covivio are to be operated under the name of voco.

Holiday Inn continues its international expansion and has surpassed the 100 Holiday Inn Express hotels opened in Canada with the opening of the Holiday Inn Express & Suites Trois-Rivières in Quebec (111 rooms), owned by the Robin Group.

The British group is also developing its portfolio of luxury brands and expanding its geographical reach by strengthening its position in Asia and the Pacific. With the completion of the acquisition of a 51% stake in Regent Hotels & Resorts, the British took the offensive to develop its high-end offer. On top of that, he acquired the wellness expertise of Six Senses in 2019 for $300 million.

IHG announced that it has cooperated with Baidu Inc. to launch several smart rooms. Wishing to attract a younger clientele, Chinese actor Baidu has invested in artificial intelligence to provide hotel rooms where almost everything is connected and controlled. A first hotel in Beijing will be equipped with these new technologies.

3. Hilton Hotels & Resorts Hilton

In preparation for its 100-year anniversary, Hilton remains in the top 3 of the world's largest groups with total growth by more than 50,000 rooms.

In keeping with the deployment of hostels and budget offers, as well as the emergence of new brands offering "micro-chambers", Hilton has also announced that it has created a brand to enter this market. In concrete terms, Motto by Hilton is the American group's 15th brand and will offer rooms half the size of those in Hampton by Hilton. With a surface area of 15 square metres, they will have wall-mounted beds, shower cubicles and toilets. The group says the price of its rooms should be "more affordable". The brand's first hotel (104 rooms) is expected to open in the London suburbs in 2020 and will be developed with Dominvs Group.

Hilton is also expanding its offer in the Caribbean and Latin America, where it announced a strategic alliance with Playa Hotels & Resorts, marking an expansion of the operator's all-inclusive resorts portfolio in the Caribbean. Already a partner with Hyatt with which it previously launched two resorts, Playa will work with Hilton to create nearly 1,300 new rooms in this region.

Finally, in Asia, the Hilton Taipei Sinban (400 rooms) opened its doors, marking the brand's return to the Taiwanese market.

 

2. Jin Jiang International Jin Jiang

Acquisition of the year and symbol of the rise of Chinese players in the hotel industry, Jin Jiang now owns 94.12% of Radisson AB despite several refusals from the independent committee of Radisson AB.

In an interview with Hospitality ON, Elie Younes Executive Vice President & Chief Development Officer at Radisson Hotel Group told us: "We are confident that their arrival will open up the Chinese market to us and accelerate our global expansion." While expansion in China will have to be followed in the coming years, development in Africa is already on track. In Nigeria, Radisson Collection aims to open three properties soon, two of which will be in Lagos.

As a shareholder of AccorHotels since 2016, Jin Jiang crossed the 15% threshold of AccorHotels' votes following the granting of double voting rights on June 2. On October 9, Jin Jiang held 11.65% of AccorHotels' shares and is planning to appoint one or more representatives to the Board of Directors by year-end.

Louvre Hotels Group, meanwhile, will showcase the 18 properties of the luxury group Barrière on its online platform as part of a distribution partnership aimed at increasing the number of Asian clients in their hotels. The budget brand Première Classe is seeing its offer drop in Europe (-6.0%) and is also redesigning its rooms.

 

1. Marriott International Marriott

The merger of Marriott's loyalty program with that of Starwood has been a major project over several years and fueled hotel news in 2018. In August, its teams announced that they had successfully combined its various programs under a single set of benefits and a single currency covering the entire loyalty portfolio of 29 brands. In September, they discovered that they had been the victim of a data hacker concerning approximately 500 million customers. Marriott Bonvoy - the new loyalty program combining Marriott Rewards, The Ritz-Carlton Rewards, Starwood Preferred Guest (SPG) under one name - launched February 13, 2019.

Marriott continues to transform its high-end Sheraton brand through an investment of half a billion dollars from the owners of its renovated properties. In the same segment, the group is continuing to develop its offer and has a pipeline of nearly 16,000 rooms for JW Marriott, 7,700 rooms for W and 4,500 rooms for The Luxury Collection. The focus will also be on the African continent, where the group plans to have 220 hotels and 38,000 rooms by 2023, representing a 50% increase in the number of rooms compared to today, according to the American group. Finally, the American company launched a new entity, The Ritz-Carlton Yacht Collection, positioning it among the first hotel champions to offer cruise ships. Three top-of-the-range yachts will be built, the first of which will make its sea debut in February 2020.

Finally, on the stock market, the company is pursuing its share buyback strategy. From the beginning of the year until May 8, 2018 it repurchased 7.9 million shares for $1.1 billion at an average price of $137.95 per share.

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