• Growth of the supply of hotel chains is significant in Europe and in North America

• Europe�s supply grows by 4.4% (48,000 rooms) versus 3.3% in North America (88,000 rooms)

• Budget categories continue to gain in presence

• The budget segments grow by more than 67,000 rooms versus 22,000 in the upmarket category

• Growth through franchising growing stronger

• The hotel supply managed through franchising grows by 3.3% (89,000 rooms) versus 2.3% (46,000 rooms) in other management sectors

1.  Events marked by a few spectacular changes

The hotel supply of corporate operated chains represents one in three rooms in the global supply of the hotel industry worldwide. The different hotel groups count 38,282 hotels with nearly 4.9 million rooms on January 1^st, 2002, meaning a 3% increase on the previous year. For 2002, the group Cendant remains the group with the most extensive supply. Ranking second, Six Continents confirms its will to develop, particularly thanks to the development of the Holiday Inn supply and the growth Holiday Inn�s brand "Express". Marriott has taken the place of Accor on the third rung of operators across all methods of management with growth of its supply at 11.6%. The group gains nearly 45,000 rooms this year. Accor, on the other hand, extends its supply by more than 26,000 rooms (+6.8%), giving it proportionally the number 3 performance in terms of supply among the top 10 groups worldwide. The Hilton Group sees its supply grow by 43.4% and gains 4 rungs in the ranking of worldwide groups bringing it up to 10^th place.

The most significant changes in 2001 happened in Europe, where the primary event of the year was the dismantling of the hotel division of Forte / Compass (Le Méridien is bought by Nomura, Heritage by MacDonalds Hotels, Posthouse by Six Continents). The British group is keeping only Travelodge for its hotel division. The events of 2001 are also marked by the "tribulations" of Golden Tulip and Tulip Inn acquired by NH Hoteles and later resold. The buyout of the chain Scandic by the group Hilton International also made its mark, allowing the British group to position itself as a leader on the Scandinavian market. Of the ten strongest developments in terms of rooms, three are the result of buyouts of entire brands (NH Hoteles, Hilton International, Six Continents). The growth of other groups is the result of internal brand growth. Thus, Marriott has developed its brand Ramada International through policies of franchises with local brands (Treff, Jarvis, Restel), and penetrates the European market in a significant manner.

It is interesting to observe that the top groups in North America are almost all of American origin, while the top groups established in Europe are of European origin. Only the way in which they are managed is different. In fact, following the example of Choice or Cendant, the American brands have increased their franchise development, while the Europeans such as Accor or Six Continents have long leaned toward development through subsidiaries.

2. The Anglo-Saxon are gaining in international presence

American and British brands continue to hold the top positions in this survey. The leaders of the worldwide hotel industry are Best Western and Holiday Inn with 312,207 and 297,710 rooms respectively, for a difference of more than 100,000 rooms with respect to the brand ranking third in our classification, Days Inn. At a time of global concentration, the smaller groups are aiming more and more at independence and franchise agreements with the major international groups. In general, the American brands form the densest networks. Eight out of ten of the top chains are of United States origin. More generally, 80 of the 200 brands surveyed in this ranking belong to American groups. The different brands of the group Choice provide one of the most meaningful examples. Through the integration of the Posthouse properties in the United Kingdom, Six Continents continues to develop Holiday Inn. The British giant also affirms its interest in the mid-market segment with its efforts to extend the supply offered by Holiday Inn "Express" where the number of rooms saw 8.4% growth throughout the year. Only the thirteenth position shows a non-Anglo-Saxon brand (Motel 6, held by the group Accor). French group Accor distinguishes itself nonetheless, by placing four brands among the top 20 chains worldwide (Motel 6, Mercure, Ibis and Novotel), a feat which no other group can lay claim to: Cendant falls into third place, while Six Continents and Choice place two brands each. In terms of European brands, Ibis and Novotel grow by more than 5,000 rooms. Sol Melia takes advantage of the integration of Tryp Hoteles to rationalise its supply with brands selected in a more homogeneous manner. The group from Majorca posts 10.6% growth, thanks to the brand Melia, in particular, which pursues the growth of its supply through hotel services that lean more towards "business" clientele.

3.  Under the current growth conditions, the budget categories are the most dynamic

While the year 2000 saw a strong evolution in the up-market brand segment, in 2001 it is the budget segments that have experienced the most significant growth. The turnaround of growth observed in the United States and events of 11 September both impacted the growth of supply. Projects whose profitability is very closely tied to the constancy of international demand were put on hold or postponed. It is thus not surprising to observe that the supply in the hard budget and budget categories grew by 5.8% and 5.1% respectively, while growth attains only 1.4% on the upmarket segment and barely 1.2% in the luxury segment. The ranking of the top hotel chains shows the budget brands and the mid-market brands to their best advantage because four of the top five networks are positioned on the hard-budget, budget or mid-market segments. There is a noticeable disparity of the budget supply from one continent to the next. There are opportunities for development particularly in Asia where the budget hotel supply is not widespread. Yet these categories are the most profitable and suffered the least from the economic slump observed in 2001, particularly in Europe where the revenue per available room grew by around 4% on the budget segments.

4.  The crisis does not challenge the globalisation of chain hotels

During this slow period of economic growth during which there was also a conquest for market shares also a conquest for market shares on a global scale, hotel groups favoured more flexible forms of integration. This year, the most significant changes result as much from organic growth as from mergers and acquisitions. Operators are showing greater reserve in their investment policy, but the major brands continue to nibble at the market shares. European operators were the most active this year in terms of buyouts, while American groups proved to be more moderate in terms of mergers and acquisitions. Internal growth strategies mostly involved expanding franchise networks, while management contracts were also favoured.

5.  The development potential for the hotel chain industry remains quite vast, particularly in Europe and in Asia

Despite a difficult context, the global hotel supply of chains grew by 3%, while the zone of Europe gains 4.4%, and North America registers a 3.3% growth rate. But the North American continent alone accounts for 60% of rooms counted at end 2001, with nearly 3,000,000 rooms in chains. It is true that the creation of multiple franchise networks has allowed the hotel chain industry to develop significantly in the United States and Canada. Europe, on the other hand, accounts for nearly a quarter of rooms. This leads to the conclusion that the other geographic zones are still well behind. During periods of slow economic growth, the brands of the large international groups study the opportunities at hand carefully, be it through buying competing brands or through organic development. The sector�s trend towards concentration begun at the beginning of the 1990s continues, even during slower business periods. During the second semester 2002, when the global economy should find itself on the rise again, the big operators should also see their portfolio filling up again and more extensive changes are to be expected.

Methodology

MKG Consulting possesses the official Database for corporate operated chains. It is the number one worldwide database outside the USA, with the best representation across all hotel segments. MKG Consulting�s Database gathers the results (Occupancy rates, Average daily rates, RevPAR) each month from 8,000 properties for 800,000 rooms.

Once again, MKG Consulting has published its exclusive survey of hotel chains worldwide, with supply statistics, business results and the ranking of groups and chains in terms of number of rooms. The results presented in this study come from the processing of official figures provided by the chains themselves, complemented by statistics from the MKG Consulting worldwide database. The complete results of this study are published in the May / June issue of the magazine HTR Eurotrends & Marketing.

This study concerns 169 hotel groups with over 2,000 rooms worldwide. These 169 groups include 294 brands of corporate operated chains. All groups taken into consideration have over 2,000 rooms. Thus, excluded from the analysis are national groups with a supply of less than 2,000 rooms.

All data has been provided to us directly by the groups or come from other communication sources of the groups, which are wholly responsible for this data.