Hotel Chains Growth 1995-2005
|Paris, 26 October 2005
1995-2005: Results on ten years of growth for the hotel chains worldwide
Source : MKG Consulting Database – October 2005
The first positions in the ranking did not experience any great upset in the last ten years: of the top ten groups in the ranking of 1995, eight are still among the Top 10 in 2005. Nonetheless, growth is strong: in ten years, the supply, expressed in number of rooms at these groups, saw average growth by nearly 85%, nearly doubling their supply worldwide! Strong growth in supply is mandatory for holding a position among the sector’s world leaders.
Mergers-acquisitions have been the preferred means for achieving growth for the big international groups. Among the major deals may be observed the 1998 buyout of Promus, which ranked seventh at the time, by Hilton Corporation, and the disappearance of the British group Forte / Granada – fourteenth in 2001 – whose brands were separated and acquired by several groups. We may also observe the absorption of the groups Westin, Renaissance and Doubletree by Starwood, Marriott and Hilton Corp respectively.
capacity between 1995 and 2005
The group that grew its supply the most in the last ten years is Marriott International. Between 1995 and 2005, the American group grew its supply by 285,000 rooms – meaning a multiplication in its number of rooms by 2.5. This is thanks to steady organic growth of its brands, the buyout of brands such as Ritz-Carlton or Renaissance and the creation of new brands (Spring Hill Suites, TownePlace Suites).
The Hilton Corporation grew by more than 260,000 rooms, mostly thanks to the acquisitions of the groups Promus and Doubletree. The American group thereby multiplied its global supply by 3.8 during this decade.
Accor, although it is relatively stable in the ranking, grew by more than 200,000 rooms. The French group relied heavily on the organic growth of its economy brands. It also finalised its implantation on the American market by acquiring the brand Red Roof, a few years after it bought out Motel 6.
The most dynamic sector: American economy hotels
In ten years, the ranking of hotel chains has not evolved much. Of the
top twenty in 1995, fifteen reappear in the Top 20 at the beginning of
2005. The order varies from year to year, but the six chains in the lead
have remained the same for ten years: Best Western, Holiday Inn, Comfort
Inns & Suites, Marriott Hotels & Resorts, Days Inn, Sheraton Hotels
& Resorts (in the order of the most recent ranking).
capacity between 1995 and 2005
Created in 1991, Express by Holiday Inn (also known as Holiday Inn Express) has the wind in its sails. The chain has grown by over 100,000 rooms in ten years and climbed 29 rungs in the ranking to find itself among the Top 10. Alone it represents 60% of the growth of InterContinental Hotels Group in the last ten years.
Hampton Inns, second in the ranking of strongest growth in room supply, has not stopped growing since 1995. From 1995 to 2000, under the aegis of the group Promus, the chain already posted annual growth by at least 10%. The trend continued within the Hilton Corporation, which brought it up to seventh place in the ranking of chains.
The chains Marriott, Courtyard and Fairfield Inn perfectly reflect their group, Marriott International. Their organic growth was spectacular and explains a good share of the group’s dynamism. The group Accor confirms its strong development by placing three European chains belonging to different categories– Ibis, Mercure and Sofitel – among those with the best progress.
The ten chains that experienced the strongest growth in capacity all belong to a hotel within the top ten groups worldwide. For the most part they developed organically. Half of these chains are leaders on the economy segment and have a preference for franchise management. Except for Mercure and Ibis, they are located mostly in North America. Moreover, the upmarket segment is not well represented among those with the best growth.
MKG Database- Largest database in the world, outside the USA, with a good representation of all the hotel segments. MKG Consulting database contains a sample of more than 40,000 hotels representing more than 2,2 million rooms. The MKG Consulting database monitors the activity of 9000 hotels, representing 1.1 million rooms.
|Also See:||The 2004 Ranking of Hotel Groups; Including the Ten Hotel Groups with the Greatest Increase in Number of Rooms / MKG Consulting / June 2004|
|The 10 largest Hotel Groups and the 10 Largest Hotel Brands in the European Union; The MKG 2005 Ranking Shows the Incontestable Predominance of Accor / February 2005|