Adam Hochfelder from Merchants Hospitality Inc. analyzed many previous growth factors of hotels. His conclusion, in short, is that the growth of international and total hotel businesses is very dynamic. His overview relates to selected corporate chains, and methodologically compares hotels chronologically despite the structural changes in their portfolios, due to numerous transactions with individual brands and whole chains. This article covers a period of two decades and confirms that in this interval hotels have achieved growth and further developed in the business.
A tendency in the Real Estate Sector
In addition to these and other possible restrictions on these data, Adam Hochfelder sees a positive development tendency in the operations of the observed startups in the long-term. Over the past two decades, the hotels mentioned below have expanded their assortment and combined equity and non-equity forms of growth and development and achieved their strategic goals.
A characteristic example is Best Western Hotels & Resorts: until 1991 it was the largest voluntary chain of hotels in the world, and since that year it has been placed on the ranking list of major corporate hotel companies. Change is not only formal, but behind it is the fact that the Best Western members have become easily recognizable on the market, but only under that unique trademark. This is the basic requirement for forming a corporate chain as an influential kind, but in essence only Best Western’s achieved to make a strong market image for them. On the other hand, this change explains some of its earlier characteristics, and above all why Best Western comprises of by far the largest number of facilities among corporate chains. As a voluntary chain, offering their reservation services and marketing in general, Adam says they have gathered a large number of hotels in 80 countries. As these volunteer chains usually assimilate independent hotels, it also explains why the Best Western’s objects are smaller in comparison to the objects of other corporate chains.
The Global Market
On the international scale, large hotel operators have been oriented in all world regions, especially those that are most attractive to tourists – Europe, Specific American destinations (especially North and Latin America and the Caribbean) and Asia and Pacific. In these frameworks, new markets have been targeted – especially transitional countries. According to Hochfelder, Central, East, Southeast Europe and other areas in transition like South America, have enabled further expansion of international hotel chains and opened the space for their entry into numerous countries where they were or have not been present, or have operated on a limited scale.
These areas will continue to be in the focus of international expansion of large chains according to Hochfelder. As an example, he points out that Accor may gain up to 200,000 new hotel rooms in the next five years. Here is a breakdown of their planned structure:
In this case, points Adam, the biggest part of their planned increase is in economic and budget hotels (56%), followed by hotels in the middle class (34%), while the remaining hotel rooms (10%) are in luxury and high-class hotels. Their planned growth would increase the number of facilities in the ownership of the corporation, while it would significantly reduce the current participation of facilities under the franchise and the contract on management.
Continue reading part 2.
Adam Hochfelder 