Worldwide hotel supply, is big still as beautiful?

During the last 6 years, the top 5 has not changed much. Except for the sharp jump made by OYO, the worldwide leading operating company ranking is very stable.

The top 3 players, Marriott International, Jin Jiang and Hilton Worldwide each surpass 1 million rooms.

For the two American leaders, more than half of their growth comes from outside their domestic market. Nevertheless, for Marriott, nearly 950,000 rooms are on North American soil. The number one developed its supply by 11%in 2021 on the very dynamic, historical European market. On the other hand, for the Chinese player Jin Jiang, almost 100% of the supply development is made on the Chinese market.

The top 3 players have taken a move towards a more diversified approach regarding their products. Marriott,for instance, has developed its extended stay supply from 20 to 25% over the last 5 years.

In the post-pandemic world, resorts seem to be very appealing to the key operators. The latest acquisition of AM Resorts by the American Hyatt Hotel Corporation, has led to the repositioning of its exposure in the leisure market. From Mexico to the Caribbean area, Spain, or Greece, moving from 5% of their portfolio to 16% of their portfolio with resort supply.

For listed companies, in the last decade, value creation was mostly achieved by supply development. Having a closer look at the type of contracts (franchise vs. management) reveals that franchise seems to be the key driver for supply growth. However, it has become more and more critical to bring a strong added value to investors in the era of asset right. By doing so, brands remain relevant for these players which have been developing their skills and knowledge of the industry for decades.

Off the podium, 2021 marked a good progression for the Chinese group Hua Zhu which opened close to 100,000 rooms. However, creating value does not necessarily only rely on room development but also on keeping the customer within one’s ecosystem and building strong brand awareness. A strategy that became the French number one’s, Accor, top priority by maximizing touch points with its clients across the All ecosystem. A transformation that also relies on the diversification of hospitality. An ecosystem that goes beyond the traditional boundaries of hotel business.