Booming Hotel business

The World’s leading hotels and biggest hotel companies are enjoying rapid expansion, fuelled by record demand, as they are at the crest of an industry boom which has lasted far longer than many had predicted.

Several groups including  Hilton, Accor, InterContinental and Wyndham are launching new brands and making acquisitions to grow their portfolios.

At the International Hotel and Investment Forum in Berlin this month, Chris Nassetta, CEO of Hilton, said: “ We are at higher occupancy levels as an industry, and a company, than we’ve ever been at in our history, as the pie is getting bigger”.

In London Airbnb, takes 4  per cent of total accommodation revenue, dismissing dire predictions of home-sharing eating into hotel revenues. Revenue per available room (revpar) the industry’s sales metric rose 3.2 per cent in the US last year. Both Africa and Europe displayed highest growth in revpar.

Marriott International, which became the world’s largest hotel company after acquiring Starwood Hotels and Resorts in a $14.6bn deal in 2016 and has more than 6, 500 properties and 1.3m rooms is not, however, fully convinced.

Arne Sorenson, CEO Marriott International said his company, which operates the W Hotels, Sheraton and Ritz-Carlton, has no plans to launch new brands although it will open new hotels.

When the previous upturn bubble burst in 2008 when leading hoteliers were advised to adopt an “asset light” model concentrating on hotel management and franchises rather than ownership.

In January, Wyndham acquired La Quinta, a US group operating 900 hotels, in a deal worth $1.95bn and last week regulators approved Accor’s $1.2bn offer to takeover the Mantra Group, an Australian business with more than 100 properties.

 

Both the Hilton  which  has 5, 200 properties and the French group Accor, Europe’s largest  hotelier which operates 600, 000 room from 4,300 properties is  launching new brands like Tru  a mid-market brand where smaller rooms cost $80 with a bigger lobby offering entertainment, craft beer, pool tables etc and  similar brand in Jo and Joe hotels respectively.