The 2020 hotel group ranking deeply illustrates the global changes in the hospitality industry. The sector grows fast taking advantage of the rising demand of travelers worldwide on the one hand. On the other hand, good profitability attracts new investors in the industry allowing fast development ambitions. Last but not least, hoteliers, investors and third-party managers are developing new models for more flexible developments. In short, the run for the size has started for several years now.

When size matters

Marriott is number 1 with more than 1.3 million rooms in operation worldwide. Its President and CEO, Arne M. Sorenson announced big development ambitions with nearly 300,000 rooms to open by 2021. Focusing on keeping the ranking leadership next year and counting on its Bonvoy™ loyalty program to develop revenues.

The Indian brand OYO, who entered top 10 only last year, jumped to the second rank with more than 1.2 million rooms worldwide. Its agile development model, strongly based on digital tools, allows it to grow faster than the other hospitality groups. The future will tell whether this business model is sustainable or not as the firm is currently dismissing 6,000 employees in China following the Coronavirus crisis.

Chinese groups also count in the battle

Jin Jiang posted another double-digit growth in 2019 thanks to its acquisition of Radisson Hotel Group and climbed to the third position. It is getting closer to the 1 million rooms symbolic milestone. Digital is important for the Chinese group. The « Smart Campanile » concept, developed in China, is arriving in Europe this year starting with the French market.

The second fastest growth of the top 10 is for the number 9 Huazhu (+25.6% rooms), that completed the acquisition of the German Deutsche Hospitality the very beginning of this year. Huazhu is a longtime partner of Accor in China, where it owns the master franchise for Mercure, ibis and ibis style. The group is now entering Europe with the purchase of an historical player, willing to develop its portfolio on the Old Continent.

To survive in the top ten, one must grow

Hilton Worldwide reaches the 4th place of the ranking despite a strong organic growth of 58,271 rooms (+6.4%), 6,055 properties. IHG posted a strong growth too with +45,648 rooms comparing to 2018 (+5.4%). Wyndham Hotel Group developed its portfolio of 21,092 rooms (+2,6%) and the French Accor, gained 23,515 rooms (+3.3%). Choice Hotels grew by + 3.8% worldwide with +21,789 more rooms in its portfolio.
Last position of the top 10, the Chinese BTH Hotels with +6,396 rooms (+1.8%).

Big is beautiful?

Certainly if it contributes to higher EBITDA, supply development should lead to more fees (franchised and managed).

In 2015, we entered a phase of massive consolidation in our industry. Marriott and Starwood launched the wedding season followed by Jin Jiang with Louvre Hotels Group and Radisson Hotel Group, Accor with Mövenpick, Fairmont Raffles, Mantis, sbe and others, IHG with Regent and Six Senses, Wyndham with La Quinta, Minor Hotels with NH, Best Western with Sweden Hotels and WorldHotels… To mention just a few, they all celebrated new unions.

2020 is promising for the hospitality industry with heavy pipelines for all the top 10 hotel groups. Many of them diversified their brands to spread their footprint in all targeted territories.

MKG Consulting

MKG Consulting

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  • MKG Consulting Paris
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