Consolidating Gains

As hotel industry mergers and acquisitions continue, is the result for travel programs a boon, bust – or both?
Consolidation has been all the buzz in the hotel industry for the last few years. While the headliner was the acquisition of Starwood by Marriott, there have been other mega-deals – like Accor buying Fairmont Raffles Hotels International (FRHI), IHG acquiring Kimpton, Wyndham buying La Quinta and others.

But those are just the high-profile transactions. For instance, to cover all the bases with travelers seeking different kinds of accommodations, Accor also bought 21c, a group of “museum-style” hotels; and Hyatt acquired Two Roads Hospitality, a boutique collection.

Normally, consolidation would mean more leverage for the ever-bigger hotel companies and a tougher negotiating position for travel managers – and indeed that has happened. But discussions with players and analysts shows that the picture is more muddied, and there are positives for travel programs in the M & A trend.

For one thing, even with its mammoth global size Marriott controls a relatively small percentage of hotel rooms worldwide, particularly outside of North America. Also, the ever-growing presence of third parties – for example, OTA’s like Expedia and Booking Holdings – further complicates matters. And in the end, the corporate/hotel relationship tends to be an individual one.

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