How is digital disrupting the hotel industry?
- There's Marriott, and then there's everybody else. Marriott is dominating across the board in terms of magnitude and momentum. They could run away from the pack if others don't respond aggressively.
- Focus on structural changes allowed digital to slip through the cracks: A lot of effort this year has been placed on structure – the Marriott merger, splitting hotels from timeshares, spinning off some hotel ownership. This should allow the hotel groups to function more efficiently in the future, but it has also distracted them from digital investment.
- Where there are leaders, there are laggards: We predict Hilton will struggle for real growth after the spin-off dust settles; Hyatt with its fundamental weakness in digital and Extended Stay for lack of scale will lag the category in terms of growth.
- OTAs, Airbnb and Google are outpacing the hotel group in digital which does not bode well for the market share of traditional hotel groups, particularly those not named Marriott.
- Don't forget about the smaller chains. The smaller chains Extended Stay and Choice Hotels have strong Digital Trajectories; reiterating the impact successful digital transformation could have play in their long term prospects. Among the smaller chains, Choice Hotels with its 2.5x Digital Share relative to Revenue Share points to future growth out-performance.