Skift Take
Perhaps being bigger isn't always better, at least when it comes to luxury hotels. When you're bigger, the challenges can be, too.
Ask hoteliers what the biggest story of the travel industry has been in the past year, and many are apt to say one word: consolidation.
They're referring, of course, to the wave of mergers and acquisitions that we saw take place in 2016 and play out in 2017. Two were especially notable: AccorHotels' $2.7 billion purchase of the Fairmont, Swissotel, and Raffles brands, among other acquisitions in the luxury alternative accommodations space (Onefinestay, Travel Keys, and Squarebreak), and Marriott's $13.3 billion acquisition of Starwood Hotels & Resorts, which finally closed in September 2016.
With its numerous recent acquisitions, AccorHotels has built a formidable luxury business. Its luxury hotel brands now include Fairmont, Raffles, Swissotel, Sofitel, Sofitel Legend, So/Sofitel, M Gallery by Sofitel, Pullman, and Grand Mercure. AccorHotels also has partnerships with Banyan Tree and Orient Express, and it also owns luxury alternative accommodations platform Onefinestay, which now includes Squarebreak and Travel Keys.
Marriott's acquisition of Starwood resulted in a total of eight luxury brands in 60 countries worldwide: JW Marriott, The Ritz-Carlton, Ritz-Carlton Reserve, Bulgari, Edition, W Hotels, The Luxury Collection, and The St. Regis.
A little more than a year later, the effects of these transactions are still reverberating throughout the hospitality industry. And for the luxury hospitality space in particular, the consolidation has resulted in two competing giants — AccorHotels and Marriott — but also room for opportunity.
"The mergers that took place this year, between Marriott and Starwood and AccorHotels and Fairmont-Raffles-Swissotel — we've never seen that level of consolidation before and it is reshaping our industry," said Christian H. Clerc, president of worldwide hotel operations for Four Seasons Hotels and Resorts.
Skift spoke to a number of hotel executives at the International Luxury Travel Market in Cannes in early December for their thoughts on how consolidation is impacting their business, and here's what they had to say.
Be Big Or Small, But Don't Get Stuck in the Middle
Many hoteliers Skift spoke to expressed the idea that this is the time for smaller hotel companies to shine, now that the large brands are getting bigger.
"Either you're small and nimble and you've differentiated yourself, or you're very big," said Marc Dardenne, interim CEO of Jumeriah. "We're happy to be in the position that we
