Hotel industry consolidation wave crested in 2015
 
Hotel industry consolidation wave crested in 2015
12 NOVEMBER 2018 8:36 AM

The hotel landscape shifted significantly in 2015 as two major acquisitions capped a year when online travel agencies similarly flexed their muscles and Airbnb and its peers in the short-term rental space began to gain momentum.

GLOBAL REPORT—Hotel consolidation reached the summit in 2015 as Marriott International announced its intentions to buy Starwood Hotels & Resorts Worldwide, a deal which sent ripples throughout the hotel industry.

The acquisition, which initially came with a $12.2-billion price tag, including $11.9 billion in Marriott stock, ended a year of leadership transition, strategic reviewcriticism over Starwood’s direction and industrywide speculation on potential buyers.

With the Starwood buy yet to be finalized, Marriott’s then-estimated room count upon completing the deal would exceed 1 million rooms. Still, industry analysts questioned how Marriott would manage a portfolio of 30 brands and the segment overlap among them. Hotel owners and consumers were equally curious how Marriott intended to merge its Marriott Rewards loyalty program with Starwood Preferred Guest.

Mergers-and-acquisitions activity touched other industry players as well. At the end of 2014, InterContinental Hotels Group announced a $430-million deal to acquire Kimpton Hotels & Restaurants, and at the 2015 Americas Lodging Investment Summit, former Kimpton CEO Mike Depatie described himself and his fellow Kimpton executives as “reluctant sellers.”

Also in 2015, Jin Jiang International completed its merger with Plateno Hotels Group and Wyndham Hotels Group acquired Dolce Hotels and Resorts.

French hotel company AccorHotels ended the year by announcing its $2.8-billion acquisition of FRHI Holdings Limited and its Fairmont, Raffles and Swissôtel brands.

Hoteliers pointed to the wave of hotel industry consolidation as a response to the growing power of online travel agencies. OTAs also experienced significant M&A activity to shift the distribution landscape with Expedia’s acquisitions of Orbitz Worldwide and Airbnb sharing-economy rival HomeAway. Speaking of Airbnb, hoteliers spent much of 2015 voicing frustration and concern over the disruptive power of the short-term rental space and the threats to the hotel business.

Strong industry fundamentals in 2015 underlined the appetite for M&A, and investors and developers expressed equal enthusiasm to build hotels, according to hoteliers who participated in Hotel News Now’s Digging into Development Roundtable Series.

Check out more industry highlights from 2015 below.

Comparing the Marriott and Accor deals
Issues loom large for keyless entry in hotels
France’s end to rate parity creates grey areas
Hoteliers embrace the Age of Authenticity
Sharing economy impact small compared to OTAs

No Comments

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.