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What are some hidden facts about the hotel industry that may surprise you?

For instance, do you think that the biggest hotel chains own a lot of hotels? The logical answer would be ‘yes’, but it’s not the right answer.

Today’s hotel sector has evolved into a web of complex structures that are little understood by the general public.

Do the biggest hotel chains own a lot of hotels?

The logical answer would be ‘yes’, but it’s not the right answer.

The fact is that the major hotel chains, starting with the biggest, which is Marriott, and including others, such as Hilton, IHG (InterContinental Hotel Group), Choice or Wyndham, own very few hotels. Increasingly, the big hotel groups are just marketing and distribution platforms.  

Hilton

Hilton had a total of 5,284 rooms at the end of 2017

However, looking further on the link, it can be seen that 656 of the hotels are management contracts and a further 4,555 properties are franchises, which means that at least 5,211 (656 + 4555) out of Hilton’s 5,284 hotels are owned by someone else. 

Choice

The case of Choice, the world’s seventh largest hotel chain by branded rooms, is even more extreme. Not only does the group own practically no hotels, it also hardly even manages any. Indeed out of the chain’s 6,815 branded properties listed at yearend 2017, 6,627 were franchises, meaning that the hotels are owned and operated by third parties.

Which is the most expensive hotel market in the world?

I’ll bet you think you know the answer to this one - maybe it’s London, New York, Paris or perhaps Vegas or Hong Kong.

Nope, actually it’s Geneva! Which is one of the most luxury top-heavy hotel markets in the world, where the average daily rate per room is almost US$308 (€263).

To boot, the world’s most expensive suite, selling at US$61,000 (€52,135) - US$84,000 (€71,800) per night is also to be found in the City of Calvin at the Hotel President Wilson

Which is the biggest incoming travel market in the world?

You’ve probably heard that it’s France. But that’s only if you look at the number of foreign travellers entering the country, which doesn’t say anything how much these tourists actually spend in France.

It may be that some of these tourists are travelling in a caravan loaded with canned goods that they purchased at home before leaving and, consequently, all they buy in France is a little petrol as they wend their way down to Spain, their ultimate destination.

Therefore to answer the question in an economically meaningful way, we must look at expenditure. When evaluated by this criterion, it’s the US that’s by far the world’s biggest inbound travel market with US$210.7 billion of incoming receipts, which dwarfs the French figure of US$60.7 billion, according to the UNWTO (United Nations World Tourism Organisation). 

Are all the biggest hotel chains American owned?

Seems plausible doesn’t it? So many of the well-known hotel brands, like InterContinental, Holiday Inn or Radisson, trace their origins to the US.  However, none of these brands currently belong to an American company.

The luxury InterContinental flag and Holiday Inn belong to IHG (InterContinental Hotel Group) which is based in Buckinghamshire, England and Radisson was just purchased by Jin Jiang, China’s largest hotel group, from the sprawling Chinese conglomerate, HNA.

Only half of top-ten hotel groups are American

In fact, out of the top-10 hotel group’s worldwide ranked by rooms, only five are currently American owned.

Go back and look at the text above and you’ll see that third-ranked IHG is UK-based, sixth-ranked AccorHotels is Paris-based; meanwhile fifth-ranked Shanghai Jin Jiang International Hotel Group Co and ninth-ranked China Lodging Group are both based in Shanghai and eighth-ranked BTG Homeinns Hotels (Group) Co. has its head offices in Beijing. Besides, abovementioned Radisson, Jin Jiang also owns Continental Europe’s second largest hotel chain, Louvre Hotel Group, which it acquired in 2015.

The Chinese hotel companies have been expanding at a breakneck pace in line with the surging growth of the country’s economy and have extended their reach into foreign markets which are receiving growing numbers of Chinese tourists.

Photo credit: Choice Hotels