Given all the geopolitical and economic upheaval of the past year or so, hoteliers should feel reassured by the current state of business – despite the emergence of disruptors and even more brands that threaten to further commoditize the business by confusing consumers. Perhaps the extended cycle and the industry’s apparently never-ending resilience is more of a testament to the still-emerging allure of global travel and tourism, but any way you want to slice it, the future appears quite bright.
Not that performance data is screaming “victory” as much today as it has been the past few years, but the U.S. is stable, Europe is, somewhat surprisingly, outperforming thus far into 2017, and Asia seems to be absorbing growth quite nicely as it continues to export a lot of hospitality-related capital. Absent black swans, the outlook remains bullish for what is becoming an increasingly hardy industry.
M&A activity has slowed since the Marriott-Starwood merger, but with Chinese upstart HNA Hospitality acquiring Carlson Rezidor to match its 25% stake in Hilton, 30% share of NH Hotels and 15% of RLHC, it reminds us that new tigers can and will make headlines and are worth watching. Despite greater internal scrutiny being paid to lending practices, many more of the new darlings from China are emerging as aggressive acquirers, which brings me to this month’s Special Report – HOTELS 46th annual ranking of the hotel industry’s giants.
While the newly constituted Marriott International becomes the first hotel company to push beyond 1 million rooms, what remains particularly exciting to watch is the emergence of China-based giants, some of whom had already existed but which we had not discovered until now. Enter the likes of Qingdao Sunmei Group, Dossen International and Country Garden Phoenix International. Groups like this – some with more international aspirations – continue to climb our 300 ranking and add increasing global color to the list.
Groups such as SBE Entertainment, with its acquisition of Morgans, makes its 325 entry this year. Mergers like that of Commune and Destination Hotels gives us more to ponder, leaving us to imagine what’s next and whether consolidation further opens the door for staunch?independents and their “smaller is?better” message.
Will Chinese players continue to seek serious portfolios, or is a pullback in order? Will we see something anywhere near as big as the Marriott-Starwood deal – maybe a big deal from Hyatt? Will Marriott sell off a brand like Sheraton? The possibilities are endless and speak to the health of the industry, and we can’t wait to write the next set of exciting, often unexpected, headlines.