Expect Hotels to Mimic the Airline Merger Playbook After the Last Recession
Photo Credit: Hotel companies may want to take a page from the airline playbook and survive the coronavirus recovery by consolidating, experts say. Public Domain Pictures / Petr Kratochvil
Skift Take
Smaller hotel chains likely face two choices coming out of the coronavirus crisis: shutter completely or consolidate into a bigger brand.
It’s a matter of when, not if, hotel companies begin a wave of mergers and acquisitions to beef up market share and survive coronavirus, according to industry experts.
Given the coronavirus economic downturn depleting revenue, business leaders across all industries today are focusing more on sheer survival than mergers and acquisitions. Global M&A activity was down nearly 36 percent in the first quarter of 2020, according to financial platform Dealogic. But on the rebound, analysts expect hotel companies to combine like airlines did after the last recession to survive.
“When you have an emergency like this and there’s really no other alternative than to combine, the antitrust people in the government are a little more lenient,” Boston-based Miller Tabak Chief Market Strategist Matt Maley said. “After pent-up travel demand gets spent, what happens then? Do people travel less or stay in hotels less? If that’s the case, hotel owners won’t have any choice but to con
