12 global ranking of hotel groups: the leaders break away
12 global ranking of hotel groups: the leaders break away
Apr 26, 07 | 2:06 am
In a sneak preview of the Worldwide Hotel Activity Report, MKG Consulting presents the official 2007 ranking* of groups and hotel brands worldwide. The 10 leading groups cumulated growth in supply by around 100,000 rooms. Among them, the first 6 posted growth by more than 10,000 rooms each.
InterContinental Hotels Group (IHG) remains the hotel industry leader worldwide, with more than 3,700 hotels and 550,000 rooms worldwide. The group is increasing its lead on its immediate competitor, the Wyndham group (ex-Cendant).
Although it displays a certain amount of vitality, the ranking of brands shows no major changes. Express by Holiday Inn, the 7th ranking brand worldwide, climbed 2 positions thanks to 7.5% growth in its supply. Quality posted 6% growth in its supply and is thus positioned 11th in the ranking. Two brands in the Accor group, Motel 6 and Mercure, are making slow progress in the ranking. The brand Crowne Plaza posts growth in its supply by 15.6% and thus climbs a rung to 19th position.
The outlook for growth is still considerable. The race to Asia is on. China and India are the priority targets, and the actors are trying to take their positions as quickly as possible.
Movements of capital intensified greatly in the sector in 2006, and in 2007 this will not let up. Hotel groups are pursuing their sales programs, investment funds are increasingly at hand, and the rumors of new large-scale acquisitions are persistent.
The leading groups break away
The year 2006 was marked by strong growth of inventory for most hotel operators, according to the Worldwide Hotel Activity Report by MKG Consulting. The 10 leading groups show growth in their cumulated supply by 100,000 rooms, up by 2.5%. This growth is continuous with respect to the previous years: 6.8% in 2005 (which may be explained by the buyout of Hilton International by Hilton Corp.) and 1.2% in 2004. Among them, the first 6 in the ranking show growth in their supply by more than 10,000 rooms each, widening the gap with the competing groups whose growth in supply is decidedly lower, and even slacking off. At the core of a ranking dominated by American groups, the British InterContinental Hotels Group (IHG) and the French Accor remain the only representatives of European hotels, with supplies growing sharply.
For the fourth consecutive year, InterContinental Hotels Group holds its position as the hotel industry leader Worldwide. With growth in its supply by over 18,000 rooms, the group has lengthened its distance from its close competitors. It has a supply that is 13,000 rooms larger than its direct competitor, the group Wyndham Worldwide (the hotel pole that resulted from the Cendant Corporation's division into four companies).
This year the group Hilton Corp. slips into 4th position ahead of Accor thanks to growth by 25,000 rooms, 30% of which may be attributed to the dynamic Hilton brand. The ranking presented above does not take into account neither the sale of Scandic Hotels by Hilton Corp. in March 2007 (22,808 rooms on January 1, 2007), nor the sale of Red Roof Inns by Accor in April 2007 (35,238 rooms).
Brands that remain as dynamic as ever
Best Western remains the number one brand worldwide despite the near stability of its inventory.
The brands of the group IHG show variable changes: growth by 10,000 rooms for Express by Holiday Inn and Crowne Plaza, versus a decrease by 7,500 rooms for Holiday Inn. The latter nonetheless continues to hold 2nd position, well ahead of Marriott.
The Hilton brand, still in 5th position in the worldwide ranking of brands, also distinguished itself in 2006 with growth of its inventory by 4.5%, for nearly 7,500 additional rooms.
Among the other major evolutions, Quality posts 6% growth of its supply, positioning it 11th in the ranking. Two brands of the Accor group, Motel 6 and Mercure, are gradually moving up in the ranking, gaining 2 and 1 positions respectively.
Considerable growth perspectives
The growth of the major hotel groups worldwide will continue in the years to come since most of them have 80,000 to 150,000 rooms in the pipelines*, with implantations spread out over the next 3 to 4 years. Major changes are thus still to be expected, and the acquired positions may be challenged.
The race to Asia is on, with China and India as the key targets. These countries have many so-called "secondary" metropolises, although this term is not very appropriate for such vast markets. Flagship brands lead the way towards development for groups, which multiply their financial and real estate partnerships (such as Deutsche Asset Management and HQ Asia Pacific for Hilton Corp. in China, or EMAAR Properties and InterGlobe for Accor in India), and they plan to take full advantage of the additional renown acquired to take advantage of the growth of these supply markets. Currently the international hotel groups that are the best positioned in Asia are Accor, IHG and Starwood Hotels & Resorts.
Intensification of movements in the hotel sector
The year 2006 was already filled with events, marked by acquisitions in series and an intensification of programs to sell real estate properties. The year 2007 is off to a fine start, beginning with the acquisitions of Scandic Hotels by EQT for 833 million euros, of Extended Stay Hotels by Lightstone for 8 billion dollars and ANA Hotels by Morgan Stanley Real Estate for 2.4 billion dollars. Morgan Stanley also finalized the acquisition of CNL Hotels & Resorts for 6.6 billion dollars.
The persistent rumor of a new widescale operation has the entire sector holding its breath. The group IHG could be the object of a takeover worth over 11 billion dollars in the months to come. The potential buyers mentioned include Starwood Capital and Blackstone, two investment firms that are quite familiar to the sector.
Furthermore, the announcement of the resignation of the CEO of Starwood Hotels & Resorts, Steve Heyer, at the beginning of April, leaves the hotel group's future in suspense. A merger with A partnership with Starwood Capital is not out of the question. Despite a very intense property sales policy, the hotel group still has real estate properties that are of interest to Barry Sternlicht.
Created in 1985 by Georges Panayotis, MKG Consulting is the European leader in consulting for the hotel, tourism and restaurant sector and has the largest hotel database in the world outside the United States, with good representation of all hotel segments. The monthly observatory of MKG Consulting's Database is based on a sample of 10,000 corporate chain hotels, accounting for 1,000,000 rooms.
Since September 2004, MKG Consulting's Database offers a program that makes it possible to monitor activity indicators hotel by hotel on a daily basis. This program includes 1,500 hotels and 125,000 rooms in France making it the largest daily statistics observatory in Europe.
For more information,
Please contact Georges Panayotis on + 33 (0)1 56 56 87 90
or the Database at MKG Consulting on + 33 (0)1 56 56 87 87