The global hotel Industry size is $550B, and the U.S. hotel industry is $218B and has been growing at about 6% a year, since 2009 (pre-Covid). This post gives a brief overview of how the industry works and the key players.
Hotels touch many inter-related and supporting businesses, from finance and real estate, to marketing, to room décor and furnishings, and food and beverages. But it is a complex industry with many aspects; this article explains its structure, who the leading companies are in each part of the industry, and how to access and sell to them.
Hotel Industry Structure
There are 3 main aspects of hotels; brands, owners, operators.
The brands are the hotel names we all know; Marriott, Hilton, Hyatt, Comfort Inn, Holiday Inn etc
These brand companies usually don’t operate their own hotels, but franchise their brand to hotel owners. Brands set the standards of the hotel and control the consistency and quality of the guest experience. They also offer booking platforms, and offer frequent traveler points programs and the like, to encourage brand loyalty. Here is a list of the top 10 hotel brands by size.
- Marriott International – $22B
Surpassing all other hospitality chains, longstanding hospitality giant, Marriott International operates in over 125 countries, franchising more than 6,500 properties. The largest hospitality provider in the world they own 30 award-winning brands. In 2016 they acquired Starwood Hotels for $13B, the largest-ever acquisition of a hotel chain.
- Hilton Worldwide – $9.1B
Founded in the early 20th century, Hilton is one of the most famous hotel and resort companies in the world. They franchise 14 brands, situated in six continents.
- Best Western – $6B
Privately held Best Western operates over 2,000 hotels in North America alone, and 4,200 hotels and motels globally under the Best Western, Best Western Plus and Best Western Premier brands.
- Hyatt Hotels Corporation – $4.7B
Hyatt franchises 750 properties in 54 countries under brands like Hyatt Place, Grand Hyatt and Hyatt Centric.
- AccorHotels – $2.2B
The largest hotel chain based outside of the US; the French company Accor Hotels owns 25 hotel brands worldwide. In 2016, the business merged with FRHI Hotels & Resorts, leading to the FRHI Global Reservation Centre in Canada being rebranded as Accor Hotels Global Reservations Centre. Brands range from valuable comfort brands such as Ibis, to high-end luxury brands such as Novotel and Raffles Hotels and Resorts.
- InterContinental Hotels Group (IHG) – $1.8B
U.K. based company with 5,400 hotels worldwide, 15 brands, in 100 countries, with more than 100mn members enrolled in its rewards club.
- Wyndham Hotels & Resorts – $5.1B
Situated in 66 countries worldwide with 8,000 hotels in its portfolio, Wyndham Hotels & Resorts has established 15 hotel brands. Brands range from economy brands like Travelodge to more upscale brands such as Wyndham Garden.
- Choice Hotels – $1B
One of the largest franchisors, with over 7,000 hotels, Choice franchises names such as Clarion, Econo Lodge, Comfort Inn and Comfort Suites under its umbrella, Choice Hotels caters to both corporate and leisure demand.
- Extended Stay America – $1.3B
Extended Stay America has close to 630 properties spanning the US and Canada. The chain is targeted to longer-term stay customers on a budget
- G6 Hospitality LLC – $636M
G6 Hospitality is a subsidiary of French hotel chain, Accor SA, the company has launched its longstanding economy brand, Motel 6, in 49 states, and five Canadian provinces.
Owners are often real estate investment groups or real estate investment trusts (REITS) that pool investor money to buy hotel real estate assets; namely the land and buildings. These owners then usually franchise a hotel brand, sometimes known as flags, to operate the hotel under.
Below are some of the more prominent and larger real estate investment trusts, that are publicly traded, that are focused on hotel/lodging properties.
- Host Hotels and resorts
- Apple Hospitality
- Xenia Hotels and Resorts
- Hospitality Properties Trust
- Chesapeake Lodging Trust
- Summit Hotel Properties
- Pebblebrook Hotel Trust Upscale Hotel
- Park Hotels & Resorts
- Sunstone Hotel Investors
- Hersha Hospitality Trust
The last leg of this 3-legged stool, are the operators, which could be the same organization as the owners, but are often hotel management companies. Owners of hotel real estate, hire hotel management companies, that often operate a number of hotels, under several different hotel brand names, perhaps grouped in a region. They are good at maximizing the profits from running hotels, and have expertise in managing these types of people-intensive businesses. This will include operating the restaurants, and other food and beverage aspects involved in a hotel.
As increasing amounts of capital have flowed into the hotel industry, that capital seeks to optimize it’s return on owning the hotel. So, management companies exist to optimize profits, through operational expertise, group buying power for various services and products that they need. Management companies offer better buying power for various operating systems.
This is a list of the top 10 U.S. hotel management companies, including the number of properties they manage, and their financial size:
- Aimbridge Hospitality, 834 properties, $5B in revenues
- Interstate Hotels, 482 properties, $4.1B in revenues
- Crescent Hotels, 103 properties, $1.6B in revenues
- Pyramid Hotel Group, 99 properties, $1.4B in revenue
- White Lodging Services Corporation, 94 properties, $1.3B in revenue
- Atrium Hospitality, 81 properties, $1B in revenue
- HHM, 115 properties, $1B in revenue
- Remington, 86 properties $930M in revenue
- Sage Hospitality, 57 properties, $930M in revenue
- Island Hospitality Management, 170 properties, $850M in revenue
Hotel Industry Media
These are the main hotel industry publications:
- Hotelier Magazine – this is produced by the AAHOA
- Lodging magazine – produced by the American Hotel & Lodging Association
- Hotel Business magazine
- Hotels magazine
- Hotel Management
Most of these annual events are in the U.S., although some are international:
- Hotel Experience (HX)
- Boutique Design (BD) This event has a New York show and a separate West Coast show, every year.
- AAHOA Annual Conference
- AHLA Conference
- IMEX America
- The Lodging Conference
- The Hospitality Industry Technology Exposition and Conference (HITEC)
- Hunter Hotel Investment Conference
- The Americas Lodging and Investment Summit (ALIS)
- The Hospitality Sales & Marketing Association International (HSMAI)
- Direct Booking Summit Americas
- The Annual Hotel Conference
- Top Hotel World Tour
- Future Guest Experiences
- Hotel Data Conference
- The Boutique and Lifestyle Hotel Summit
Hopefully, this has helped you understand how the hotel industry is structured, what types of businesses support the hotel and lodging industry. And that you now have some ideas on how and where to meet decision-makers through the various organizations, associations and events we’ve described here. And don’t forget, we help businesses understand and connect to these markets, so please contact us to set up a discovery call if you’d like to learn more.