Exclusive extracts from this 111-page-long report:
- What is the business?
Leading hotel groups operate very different business models:
The ownership model means the hotel group owns the real estate assets and manages the daily operations of the hotels. They assume all the benefits and costs;
The franchise business model means the franchisor provides certain services to franchisees, including support for marketing, procurement and IT activities in particular. The franchisor typically receives upfront revenues and fees based on a hotel's performance; […]
- What are the main markets?
With about €1,500bn in expenditure in 2016, the Asia Pacific region has become the world's largest market for tourism. India and China, in particular, have seen their respective domestic markets soar as the local middle class has rapidly expanded. The Americas, Europe and the Asia Pacific together account for over 90% of global spending. [...]
- Who are the key players?
Marriott, the world's largest hotel group by revenue and room count, controls less than 8% of global capacity, with 46% of global capacity operated by independent hoteliers (not affiliated to a franchisor or owned by a chain). Concentration is higher on a regional basis but generally remains low. Many leading hotel groups have been particularly busy with merger and acquisition activities over the past few years. [...]
- How intense is competition?
Competition in the industry is multifaceted. Depending on their business models, hotel groups compete for guests, real estate owners compete for management contracts, and hotel franchisees compete for the provision of franchise services. Hotel groups typically compete on room price, franchise and management fees, hotel location, hotel concepts, services, reputation, brands and availability across distribution channels (travel agencies, online platforms, specialists in corporate travel management, etc.). Competition is reinforced by low industry concentration in most markets and the many possibilities of market segmentation. Intense competition results in price pressure and substantial investment and innovation efforts. [...]