How the Hotel Majors Stack Up
With Marriott International’s huge acquisition of Starwood Hotels & Resorts Worldwide now six months old, planners are reasonably wondering 1) how the ranking of the world’s largest hotel companies stacks up and 2) and, probably more importantly, how this “new world order” will impact their job when it comes to choosing luxury and upper upscale brands to hold meetings—and what, if anything, has changed vis-à-vis their negotiating leverage.
As expected, no sooner had Marriott swallowed Starwood, it became the world’s largest hotel company. According to the widely-respected Smith Travel Research data aggregator, Marriott currently has 5,929 hotels, accounting for 1,158,107 guest rooms. Planners responsible for international meetings will be interested to know that Marriott now operates in 122 countries with projects in the pipeline that will add another 28 countries. (How many countries are there in the world anyway?)
Among Marriott’s luxury and upper upscale brands are Ritz-Carlton, JW Marriott, Edition, Bulgari, Renaissance and Autograph Collection. Thanks to Starwood, that list now includes St. Regis, Luxury Collection, W Hotels and Westin. Across all price points, Marriott boasts 30 brands, which according to its latest updates, it intends to retain.
Hilton Worldwide ranks second—at least in terms of guest rooms (790,659). In third position, however, InterContinental Hotels Group has fewer guest rooms (727,820) but more hotels (5,034, compared to Hilton’s 4,856). Hyatt, another large hotel company popular with luxury planners, placed ninth.
For planners, working with the majors certainly has its advantages as well as potential drawbacks. Consider:
- Bringing more volume to a single supplier gives you more leverage in negotiations.
- Similarly, working with a supplier with truly global presence simplifies things as well.
- The bigger a national or global account you become, you get more favored status in other ways (last-minute changes for example)
- Relationships are key in this business, so as in any acquisition or merger, your favorite regional sales manager may no longer be part of the team going forward, which will mean building new relationships from scratch.
- Smaller players are hardly going to be sitting on their duffs. To the contrary, they may be willing to undercut the big guys in order to capture or retain your business.
- With bigness comes the risk of sameness in terms of guest service and amenities, a drawback not likely with single brand luxury players (Four Seasons and Mandarin-Oriental, to name two).
Food for thought.