HNN recaps the biggest events from 2016 as part of its look back at 10 years of the hotel industry.
GLOBAL REPORT—Coasting on the wave of the current economic up-cycle, in 2016 much of the hotel industry’s attention was focused on three tidal shifts with the potential to change the landscape forever: a merged Marriott-Starwood, the administration of U.S. President Donald Trump and Brexit.
Marriott International’s $13.3-billion acquisition of Starwood Hotels & Resorts, which closed on 23 September 2016, created “the largest hotel company in the world,” with 4,451 properties and more than 760,000 rooms. Marriott’s pursuit of Starwood wasn’t without drama, as an investor consortium led by China-based Anbang Insurance Group engaged in a bidding war with Marriott for Starwood that lasted several weeks.
Following the close of the acquisition, Desmond Taljaard, managing director of hotels at London & Regional Properties, said about the changing landscape: “The Marriott/Starwood deal certainly has moved the industry …. We’re at the stage in hotel industry Darwinian evolution that will see some brands die, and I am staggered some have not gone already.”
The effects of a June 2016 vote by the United Kingdom to move forward with Brexit, a plan to exit the European Union, still are not fully clear.
Reacting to the vote, Thomas Mielke, managing director of AETHOS Consulting Group, said it is a mistake for the U.K. to isolate itself in a globalized marketplace.
“My gut feeling, and from what I have heard from our clients, is that the industry is heavily reliant on European labor, specifically service sector and front-line staff,” Mielke said. “To have tighter controls on borders, and more management of immigration, will have consequences. And these jobs are not typically being picked up by British employees. That is of course a generalization, but it does seem they are not interested.”
Similar concerns about a shift away from globalism in the U.S. were expressed following the election of U.S. President Donald Trump in November 2016. But in the hotel industry, some expressed hope that Trump, being a hotelier himself, would be good for business.
“As the owner of numerous hotels around the world, Trump has extensive experience in the hospitality industry. At this time however, it is uncertain what the election results will mean long term for the U.S. lending landscape,” Pelvi Chavda de Vries, SVP of business development at Access Point Financial, said at the time.
Trump, Brexit and the Marriott-Starwood deal have had, and will continue to have, ripple effects on the hotel industry.
Here’s a closer look at those and other top stories from 2016.