6 - AccorHotels
Supply change: +5,3% - # of hotels, 2017: 4 149 - # of rooms, 2017: 583 783
AccorHotels climbed back up in the rankings since its merger with FRHI, but while external growth remains on the agenda, the other two pillars of the group reflect it better: apartment rentals and concierge services and F & B. Sébastien Bazin plays the diversification card by reinvesting in events and customer services. The future is emerging with a new separation: the subsidization and sale of a large part of real estate assets. The operation has been baptized Booster. It is expected to generate several billion euros, part of which will be reinvested in technology and the acquisition of new start-ups. On the hotel side, lifestyle is on the agenda, with equity deal as at 25hours, and for younger generations with the early development of Joe & Jo, a modern version of youth hostels. After the revival of Ibis, we are expecting a revitalization of the founding brands, Novotel and Mercure.
7 - Choice Hotels International
Supply change: +1,7% - # of hotels, 2017: 6 514 - # of rooms, 2017: 516 122
Choice Hotels International is undergoing the inevitable ebb and flow of large franchise networks that limit the net growth of the supply. The group is working to reposition its strong brands, starting with Comfort, whose new version is being rolled-out in the USA with substantial financial support, before international expansion. Today, the priority is more on the mid-and upscale range, through the Ascend label and the brand Cambria, Choice’s Lifestyle supply. This segment is more profitable and trendy, and mobilized nearly $500 million in marketing and operations budgets. Another priority segment is extended stay, with the MainStay brand, which benefits from a new concept. Choice has focused on international development with the aim for more than the 500 properties in Europe and to conquer Asia.
8 - BTG Hotels
Supply change: +10,0% - # of hotels, 2017: 3 402 - # of rooms, 2017: 373 560
BTG spent the year 2016 digesting the merger between BTG (rather upscale) and Home Inns (rather budget) under the supervision of the managers of both groups and the influential online distributor CTrip. David Sun, the former boss of Home Inns, took the helm in leading the new strategy. The first step is improving the range. Of the 400 openings in 2016, two thirds are in the mid- and upscale segment with management contracts to reach 1,000 4* and 5*properties. On the other hand, Home Inns will now be totally dedicated to franchise. From 90%, Home Inns' revenues now account for only 66% of the group's total. This did not hinder the growth of the park which remains very strong with a double-digit jump. David Sun's strategy is similar to that of his rival Huazhu, to move upmarket and enter partnerships with Western groups to develop internationally renowned brands in China.
9 - Huazhu
Supply change: +12,9% - # of hotels, 2017: 3 169 - # of rooms, 2017: 314 788
Huazhu or China Lodging Group holds its own next to its new competitor. They now both have an equivalent size and a parallel strategy. Chairman Ji Qi has taken a step ahead and is trying to retain it even if the data published are still to its disadvantage. However, its growth rate is still higher than that of BTG Home Inns (nearly 20% increase in supply in one year). It has also just carried out a new acquisition in the China’s high-end segment with the Crystal Orange group of Beijing. Moreover, it has already entered a partnership by developing franchises for all economy and midscale AccorHotels brands and by organizing its portfolio prioritizing the mid- and upscale. There is a better future and revenues on these segments given the still very low rates of the Chinese hotel industry ($30 ADR in 2016 for CLG). The strategy is paying off and results for the first quarter of 2017 show a 17% increase in revenues and gross margin
10 - Best Western International
Supply change: -5,9% - # of hotels, 2017: 3 718 - # of rooms, 2017: 293 416
Best Western International continues to play yoyo with its members. The cooperative model leads to this situation where all contract terminations are not necessarily compensated by the arrival of new members. This is the case in 2016 with a negative balance of some 8,000 rooms. This does not prevent the chain from achieving good financial results with more than $2 billion in transactions in 2016 for its CRS up 21%. The hotel group, long an adept of a single-brand strategy declined in subsets, is multiplying new brands or labels. After Vib and Glö, positioned on the Youth and Lifestyle segment, Best Western is launching a selection of associated properties, SureStay, a white label that benefits those who will not be entitled to the parent brand. In addition, national subsidiaries are pursuing external growth policies, such as Best Western Scandinavia, which took over its Nordic competitor to become the leading hotel chain in the region.
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