Hotel companies tipped the scales in 2018
 
Hotel companies tipped the scales in 2018
26 DECEMBER 2018 8:44 AM

In a recap of Hotel News Now’s top stories of 2018, one trend that emerges is that of the big companies getting bigger.

GLOBAL REPORT—The name of the game for the hotel industry this year has been scale—and the complexities and challenges of that—as the big players got bigger.

Hotel companies grew by buying (other companies and portfolios), branding (expanding existing brands and adding new ones) and building.

For many, the benefits of scale have been quickly realized; and for a few, the growing pains have become evident.

Marriott International entered its second full year since closing on its scale-tipping acquisition of Starwood Hotels & Resorts Worldwide in September 2016 with work still to do. A key piece, the integration of its loyalty programs, though successful, proved an even taller task than officials imagined it would be.

And this month, Marriott announced that a data breach of its Starwood properties compromised the personal information of up to 500 million guests. The breach began in 2014, roughly two years before Marriott’s acquisition of Starwood was completed, though it wasn’t discovered until September 2018 and not disclosed publicly until 30 November. Marriott officials did not specify whether the breach was related to or discovered during the integration of its back-end systems with those at legacy Starwood hotels.

The back-and-forth trajectory of another acquisition kept the industry on its toes, as LaSalle Hotel Properties officials first rebuffed an offer from Pebblebrook Hotel Trust, agreeing instead to a sale of the real estate investment trust to Blackstone Group, but then ultimately broke off that deal to merge with persistent suitor Pebblebrook.

Meanwhile, this year Wyndham Worldwide grew its portfolio for its spinoff Wyndham Hotels & Resorts to more than 9,000 properties with the acquisition of La Quinta Holdings’ hotel franchise and management business, adding La Quinta Inns & Suites to the company’s now 21 brands.

The Wyndham-La Quinta deal also created a new REIT in CorePoint Lodging, made up of the 316 hotels formerly owned by the now dissolved La Quinta Holdings and headed up by former La Quinta President & CEO Keith Cline.

Paris-based chain AccorHotels kept up a buying spree in 2018, which included deals to acquire Swiss brand Mövenpick Hotels & Resorts, Chile-based Atton Hoteles’ management business, a 50% stake in independent luxury lifestyle hotel operator SBE Entertainment Group, and 21c Museum Hotels’ collection of boutique properties.

Also gaining scale via M&A this year were: Choice Hotels International with its acquisition of the brand and franchise business of WoodSpring Suites; RLH Corporation with its addition of the Knights Inn brand, which it acquired from Wyndham; InterContinental Hotels Group, which relaunched the luxury Regent brand with its buy of a 51% stake in Regent Hotels & Resorts; Hyatt Hotels Corporation with its agreement to acquire Two Roads Hospitality; Jin Jiang International Holdings’ buy of Radisson Hospitality; and more.

The hotel brand landscape also expanded considerably in 2018. Companies launching new brands included: Hilton with midscale entry Motto; Whitbread with the micro, budget Zip; Best Western with the boutique Sadie (upscale) and Aiden (upper midscale); IHG with upscale conversion brand Voco; Margaritaville Hotels & Resorts with select-service upscale Compass; Red Roof with its midscale soft brand Red Collection; Berlin-based Deutsche Hospitality, which introduced Maxx by Steigenberger; and Choice with its new midscale extension Clarion Pointe.

As these feats of scale played out, the hotel industry grappled with other persistent and emerging issues, from the frustrating combination of a shrinking labor pool and the pressures of wage growth to a sustainability-conscious effort to reduce waste from plastic.

Other top stories in 2018 included:

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