HOTELS
Size matters
Hotel consolidation is currently very much in the news, raising the question: big may be better– but for who?
By ROB GILL
US$12.4 billion planned acquisition of Starwood, while Accorhotels has snapped up the Fairmont Raffles group of properties and Chinese firm HNA has purchased Carlson Hotels. But what does this mean for travel buyers and their negotiations with hotel chains? Will fewer global players streamline the process and make it easier to drive bookings to preferred partners – or will bigger hotel chains be able to push up their rates in key markets because of reduced competition? It’s a subject that has been increasingly on buyers’ minds since the Marriott-Starwood tie-up was first announced in November 2015. Greeley Koch, executive director
C
BUYINGBUSINESSTRAVEL.COM ONSOLIDATION WITHIN THE
GLOBAL HOTEL INDUSTRY has been gathering pace over the last 12 months, with the headline deal being Marriott’s whopping
of the Association of Corporate Travel Executives (ACTE) says that members have been constantly asking him about the potential impact of hotel consolidation in recent months. The Marriott-Starwood merger has also led Carlson Wagonlit Travel’s Solutions Group to issue a white paper on the potential impact – the travel management company (TMC) says it “may be a game changer” when it comes to corporate hotel negotiations, and buyers should start thinking about how they approach the request for proposal (RFP) process in the coming years. “Many questions remain unanswered
about how the Marriott-Starwood merger will change both entities,” says CWT in its report. “As the size of the deal is sure to change the supplier landscape overall, negotiations may become more challenging in some cases, while new opportunities may be created for others. Buyers would be wise
to simply expect the unexpected and review their programme in-depth now to ensure they know their options.” But, assuming it does go ahead, not everybody thinks it will have such a dramatic change. One UK-based buyer says: “Having fewer big hotel companies will hopefully mean fewer painful RFPs. The hotel sector is very competitive anyway so hopefully it will not push up prices. There may be some destinations – particularly in North America – where they have a competitive advantage, which could be a potential issue.”
IMPACT ON BUYING PROCESS The changes are unlikely to have a major effect on the current 2017 RFP season – particularly as the Marriott-Starwood deal was delayed over the summer as Chinese competition authorities took their time assessing the merger. (As BBT went to press, Marriott and Starwood had agreed to an
BBT September/October 2016 75
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