Source: TOPHOTELPROJECTS

It has been a big year in the hospitality industry, and one of the things on everyone's lips were some huge mergers that happened that have significantly affected the landscape of the hotel world. Marriott's purchase of Starwood Hotels and Resorts cost them a pretty $13.3 billion, while AccorHotels acquisition of a slew of luxury brands, including Raffles,Fairmont and Swissotel saw them putting down $2.7 billion. Money well spent, some would say, as these two hotel giants have expanded their portfolio to become even bigger hitters in the hotel game, if that was even possible. Considering the size of both of these hotel goliaths, the addition of these new brands under their umbrellas make them formidable presences in the world of hospitality, carrying particular sway in the luxury sector. With the acquisition of Starwood, Marriott now operates eight luxury brands across 60 countries, while Accor has gone one step further by buying a number of online platforms which operate alternative luxury accommodations, including OneFineStay and Squarebreak.

But is growing into a giant luxury hotel conglomeration all it's cracked up to be? It is certainly not without its challenges, and many in the hotel industry are being forced to reevaluate their position in the hospitality world because of the seismic shifts that these two mergers, among others, have produced. One of the things that has emerged as an insight following these recent developments that is hotels are successful when they are either big or small, but occupying the middle-ground can be dangerous territory. Marc Dardenne, interim CEO of Jumeirah, said, "Either you're small and nimble and you've differentiated yourself, or you're very big. We're happy to be in the position that we are because it creates value with our owners. In a large organization, it's difficult because you're so big. If you're in the middle and undifferentiated, you could get swallowed up."

Another benefit of the consolidation is that there is now more of a focus on the luxury market, which creates opportunities for other brands to expand into that sector. A spokesperson for the Four Seasons said, "The consolidation taking place in the industry is an opportunity for us. We're single focused on luxury hotels. We see this as an opportunity to continue to excel in that niche. We've done it for well over 50 years. Our brand awareness is greater than the size of our portfolio of 107 hotels."

One of the challenges, however, facing these huge organisations that continue to grow ever bigger, is differentiation. If you have so many brands under the one umbrella, how do you set one apart from the other, and how do Marriott and Accor continue to have a competitive edge if they are operating so fully within the same market? Rick Harvey Lam, senior vice president of global marketing for luxury brands at AccorHotels, says, "Our vision of the group is one of differentiation, and basically being not so much the biggest hospitality partner but being the ideal travel partner, so although our core business remains the hospitality business, we are also diversifying in what I would call 'digital platform in distribution,' but also into what we would call the 'shared economy' and being a bigger part of the local communities."

Related projects

Let's take a look at a few other projects currently underway:

Sheraton Ha Long Bay Hotel

Overlooking the World Heritage-listed Halong Bay, Vietnam and its 120 kilometers of beautiful coastline …[READ MORE]

25hours Hotel Köln

The Gerling-Quartier in the Friesenviertel of Cologne will be converted into a 25hours hotel …[READ MORE]

Jumeirah Emirates Tower Business Park

The Emirates Towers Business Park project will contain new hotels, including a Jumeirah Group property …[READ MORE]

More information on recent hotel mergers can be found on TOPHOTELPROJECTS, the specialized service provider of cutting-edge information of the hospitality industry.

Jule Grass
Marketing Manager
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TOPHOTELPROJECTS