Skift Take
The competition is brutal when it comes to making new brand deals in a downturn. Smaller companies have to be nimble and appeal in franchise negotiations with lower-cost terms to win out against the global giants.
A tight lending market in the U.S. may deter ground-up hotel construction projects, but that isn’t stopping hotel executives from a game of musical chairs with various hotel brands.
Conversions, a deal where a hotel company gets the owner of an existing hotel to switch brand affiliation, are a major source of growth in a downturn. Publicly traded hotel companies need to show growth to shareholders, so conversions typically pick up the slack when new-build construction is harder to come by.
This often means smaller players become the prey.
“We’re under assault from our competitors, as everyone is,” Radisson Hotels Americas CEO Jim Alderman said in an interview with Skift this week at the 2021 Americas Lodging Investment Summit. “This is a very, very, very competitive business. It’s a very insular business. Almost everyone at one company selling franchises has worked for one of the other companies selling franchises, so you know everyone's clients.”
Marriott, Hilton, Hyatt, IHG, Choice Hotels, and Wyndham are
