Elite Overlord LeSabre™
America's Best-Selling Full-Size Car, 1993-2005
- 11,035
- Posts
- 17
- Years
- Age 99
- Some Quality Inn somewhere, probably
- Seen today
LOL this is my first writing posted here in God knows how long. Apparently the SWC grading system isn't well-suited for non-fiction research reports like this - not like I was expecting to win with this, more that I wanted to submit something unique and unorthodox. As a result, please enjoy this piece of writing with no plot or characterization whatsoever, lol
More Brands, Less Competition? The Current State of the U.S. Lodging Industry
As you travel today, you may be noticing more new brands than ever before. Names like Cambria, Tru, Avid, Aloft, and others weren't in existence fifteen or twenty years ago. But do you really have more choice as far as which corporation your travel dollars go toward? In a word, no. The modern hotel mega-corporations are more bloated than ever before, with more brands under their umbrella. The veneer of "competition" is exactly that, as a majority of chains are under the control of a few major players. But how did we get here? And what is the current state of the situation?
History:
Quality International (now Choice Hotels International, with Quality remaining as one of their brands) is largely credited with introducing the concept of a single company operating multiple hotel brands. In 1981, they created the Comfort Inn (economy at the time) and Quality Royale (upscale) brands to complement their existing (mid-priced) Quality Inn brand, which had existed since 1939 (1).
Hospitality Franchise Systems (the predecessor to today's Wyndham Worldwide) was another early player, buying up struggling brands that enjoyed their heyday back in the 1960's and 1970's, such as Ramada Inn, Howard Johnson, and Days Inn.
This business model of "market segmentation" proved to be successful, and naturally, other hotel companies began emulating the idea.
By The Numbers:
The number of hotel brands owned by the biggest corporate players in the industry is astounding. Here are the statistics for four of the major U.S. lodging industry players (although not every one of their brands is active in the U.S., and some are specialty brands with only a handful of locations in the biggest cities and tourist destinations.)
Marriott International: 34 brands (2)
Wyndham Hotels & Resorts: 23 brands (3)
Hilton: 22 brands (4)
Choice Hotels International: 22 brands (5)
Note that the total number of hotel properties and the number of hotel rooms that are part of a particular company are not the focus of this report. Moreover, such numbers are volatile and fluctuate frequently as individual hotels are opened, closed, go independent, join a brand, and are sold between brands/companies on any given day. In contrast, entire brands typically take an extended period of time to launch, wind down, or acquire from other companies.
Okay, the numbers are staggering, but how did they get this way? Well, it's a combination of hotel companies buying each other out, and the companies trying to create new hotel "concepts." First, let's examine some of the large, more recent corporate acquisitions and mergers.
Corporate Buyouts:
In 2016, Marriott International purchased Starwood Hotels & Resorts (6), bringing longtime competitors Marriott and Sheraton under the same ownership, along with a number of other upscale and luxury Starwood brands which formerly competed in the same market as many of Marriott's similar brands. There are a ton of overlapping hotels and brands as a result of this buyout, and Marriott has seemingly not felt the need to pare down their offerings.
In 2022, Choice Hotels International bought the North and South American operations of Radisson Hotel Group (7). While there was less overlap of brands (Choice mostly operated in the mid-priced and economy segments, while Radisson's offerings skewed toward more upscale markets,) Radisson's mid-priced Country Inn & Suites brand was a former competitor to Choice's Comfort, Quality, and Sleep brands. And Choice's upscale Cambria was in direct competition with many Radisson brands.
Wyndham Worldwide, and its predecessors Cendant Corporation and Hospitality Franchise Systems, have a long history of acquiring numerous hotel brands, including AmeriHost Inn (2000, since dissolved) (8), Microtel and Hawthorn Suites in 2008 (9), AmericInn (2017, unrelated to the similarly-named AmeriHost) (10), and La Quinta in 2018 (11), although their buyout strategy has focused on smaller companies with only one or two brands in their portfolio, rather than the large-scale buyouts done by Choice and Marriott which have included numerous brands and hotel properties. Still, Wyndham now finds itself with a number of mid-priced and economy hotel brands under its umbrella, each having to compete not only with each other, but offerings from other companies as well.
Given these buyouts, it is very likely that any future attempted large scale acquisitions would come under the scrutiny of antitrust laws.
New Brands:
Of course, new hotel brands cropping up is nothing new. But today, we're seeing fewer hotel brands launched by independent players, and more of them created by the corporate giants who already have massive collections of brands under their wings. The intent, of course, is to appeal to a new generation of travelers who have different wants and needs regarding where they stay.
So-called "lifestyle" brands (or "hipster brands," as this author disparagingly calls them) have been cropping up recently, nearly all of them being launched by the giants of the industry. Naturally, each of these new brands competes with that company's more established, traditional brands – mostly in the mid-priced hotel segment. Examples include Hilton's Tru (competes with their Hampton Inns,) IHG's Avid (competes with their Holiday Inn Express,) Marriott's Aloft (competes with their Fairfield Inn,) and Choice's offshoot of their Clarion brand, Clarion Pointe (competes with a number of Choice brands including Quality, Comfort, and newly acquired Country Inns & Suites). How do these new brands attempt to distinguish themselves from their longstanding in-house competition? Typically by offering a more "modern," minimalist product, with brightly colored décor, smaller rooms, space saving "modular" furniture, and features like laminate flooring (instead of carpet) and walk-in showers. Some offer limited breakfast selections, under the marketing label of being "healthy." These hotels do not appeal to this particular author, but they are finding a market, as evidenced by their rapid growth. How much of a threat they pose to their more traditional counterparts remains to be seen.
Extended stay hotels are another fast-growing market. Unlike with the lifestyle brands, often a single company will have multiple extended stay brands in their portfolio. Marriott has TownePlace Suites, SpringHill Suites, and Residence Inn. Choice has MainStay Suites, Suburban Studios, Woodspring Suites, and the newly-created Everhome Suites. Hilton has Home2Suites and Homewood Suites. That is a lot of extended stay brands, and that's not even counting independent players like Extended Stay America or Intown Suites. What are the differences between, say, SpringHill and TownePlace, or Woodspring and Everhome, that might prompt someone to choose one over the other? Is it décor? The size of the breakfast? Price? Other amenities like pools and weight rooms, or the lack thereof? The big hotel executives themselves might be hard-pressed to answer that question.
Guest Loyalty Programs and the "By" Descriptor:
There is one significant advantage to one company owning so many seemingly competing brands. Travelers who are a member of a company's loyalty program (where each stay earns them points that can be redeemed for free hotel stays or other rewards, and frequent guests enjoy tier upgrades which increase their point earnings and entitle them to room upgrades, free meals, or other perks) now have more choices than ever as to where to stay, and still earn points through a single program. Take, for example, a member of the Hilton Honors program. Hilton has them covered whether they need to spend a night off the Interstate (Hampton Inn,) need to stay two weeks on a job assignment (Homewood Suites,) or want to treat themselves to luxury (Waldorf Astoria.)
And to be fair to the big corporations, most are now adding a "By" descriptor to their brands (i.e., Embassy Suites by Hilton, Quality Inn by Choice Hotels, Howard Johnson by Wyndham,) so guests know which large corporate entity they're supporting with their stay. However, this was likely done to make it easier for travelers to identify which hotels are in their reward program's "network," with the greater transparency in brand ownership being an unintended consequence. After all, with so many different brands, it's hard for industry professionals to keep track, let alone the average Craig and Christine Traveler.
The Future?
The lodging industry's history is littered with defunct hotel brands. But the industry was never as centralized as it is today, where the franchise operator not only has to worry about competition from other companies' brands, but also competition from other brands within their parent company's portfolio. Is this sustainable? Which brands will survive and which ones will eventually be relegated to a footnote in history? Time will tell. It can be easy to assume that the newer brands don't have the name recognition that traditional ones do; however, it should be noted that Howard Johnson and Ramada, both over fifty years old, are floundering, with their number of locations dwindling (whether this is the result of more modern competition or Wyndham's mismanagement of the brands is up for debate.) Conversely, Choice's Quality Inn, now over eighty years old, is still showing respectable growth. So longevity is not an absolute predictor of future survival, especially in today's corporate world where profit is king and a brand's history and legacy means comparatively little – unless the corporation can profit from it. Besides, every hotel chain was a new one at one point in time.
Conclusion:
Travelers do indeed, on the surface, have more choices than ever regarding where to spend the night. But considering so many of these brands have overlapping amenities and services, and thus compete at similar price points, the differences between some of them are minimal. Differences mostly come down to décor or "extra" amenities like breakfast or pools, that a chain may or may not offer. Plus, with so many brands being part of one of a few corporate giants, there's far less competition as far as which company your money ultimately goes to. And for the individual hotel operator, their fiercest competitor may very well end up being a fellow hotel under the same corporate umbrella.
It remains to be seen whether this unprecedented level of bloat, in-house competition and overlap is sustainable, and which brands will be on the chopping block if it proves not to be. But for the time being, the biggest players continue to grow bigger, with no signs of slowing down or consolidating their brands. And travelers who take advantage of guest loyalty programs have more locations where they can earn or redeem their points, so they are likely perfectly fine with it.
Sources/References:
1: "A History of Innovation." (n.d.). Choice Hotels International. https://www.choicehotels.com/about/corporate-history
2: "Home Page." (n.d.). Marriott International. https://www.marriott.com/
3: "Home Page." (n.d.). Wyndham Hotels & Resorts. https://www.wyndhamhotels.com/
4: Home Page. (n.d.). Hilton Worldwide. https://www.hilton.com/en/
5: Home Page. (n.d.). Choice Hotels International. https://www.choicehotels.com/
6: "Marriott International Completes Acquisition of Starwood Hotels & Resorts Worldwide, Creating World's Largest and Best Hotel Company While Providing Unparalleled Guest Experience." (2016, September 23). Marriott International. https://news.marriott.com/news/2016...while-providing-unparalleled-guest-experience
7: "Choice Hotels International Completes Acquisition of Radisson Hotels Americas." (2022, August 11). Choice Hotels' News. https://media.choicehotels.com/2022...letes-Acquisition-of-Radisson-Hotels-Americas
8: Bloom, Elliott. (2000, October 1). "Cendant Corporation Completes Acquisition of AmeriHost Inn(R) and AmeriHost Inn and Suites(SM) Brand Names and Franchising Rights." Hospitality Net. https://www.hospitalitynet.org/news/4006056.html
9: Clausing, Jeff. (2008, June 3). "Wyndham acquires Microtel and Hawthorn brands from Hyatt." Travel Weekly. https://www.travelweekly.com/Travel...uires-Microtel-and-Hawthorn-brands-from-Hyatt
10: Eisen, David. (2017, July 18). "Wyndham to buy AmericInn, management arm for $170 million." Hotel Management. https://www.hotelmanagement.net/transactions/wyndham-to-buy-americinn-three-rivers-hospitality
11: "Wyndham Worldwide Completes Acquisition Of La Quinta Holdings." (2018, May 31). PRNewsWire. https://www.prnewswire.com/news-rel...uisition-of-la-quinta-holdings-300657122.html
More Brands, Less Competition? The Current State of the U.S. Lodging Industry
As you travel today, you may be noticing more new brands than ever before. Names like Cambria, Tru, Avid, Aloft, and others weren't in existence fifteen or twenty years ago. But do you really have more choice as far as which corporation your travel dollars go toward? In a word, no. The modern hotel mega-corporations are more bloated than ever before, with more brands under their umbrella. The veneer of "competition" is exactly that, as a majority of chains are under the control of a few major players. But how did we get here? And what is the current state of the situation?
History:
Quality International (now Choice Hotels International, with Quality remaining as one of their brands) is largely credited with introducing the concept of a single company operating multiple hotel brands. In 1981, they created the Comfort Inn (economy at the time) and Quality Royale (upscale) brands to complement their existing (mid-priced) Quality Inn brand, which had existed since 1939 (1).
Hospitality Franchise Systems (the predecessor to today's Wyndham Worldwide) was another early player, buying up struggling brands that enjoyed their heyday back in the 1960's and 1970's, such as Ramada Inn, Howard Johnson, and Days Inn.
This business model of "market segmentation" proved to be successful, and naturally, other hotel companies began emulating the idea.
By The Numbers:
The number of hotel brands owned by the biggest corporate players in the industry is astounding. Here are the statistics for four of the major U.S. lodging industry players (although not every one of their brands is active in the U.S., and some are specialty brands with only a handful of locations in the biggest cities and tourist destinations.)
Marriott International: 34 brands (2)
Wyndham Hotels & Resorts: 23 brands (3)
Hilton: 22 brands (4)
Choice Hotels International: 22 brands (5)
Note that the total number of hotel properties and the number of hotel rooms that are part of a particular company are not the focus of this report. Moreover, such numbers are volatile and fluctuate frequently as individual hotels are opened, closed, go independent, join a brand, and are sold between brands/companies on any given day. In contrast, entire brands typically take an extended period of time to launch, wind down, or acquire from other companies.
Okay, the numbers are staggering, but how did they get this way? Well, it's a combination of hotel companies buying each other out, and the companies trying to create new hotel "concepts." First, let's examine some of the large, more recent corporate acquisitions and mergers.
Corporate Buyouts:
In 2016, Marriott International purchased Starwood Hotels & Resorts (6), bringing longtime competitors Marriott and Sheraton under the same ownership, along with a number of other upscale and luxury Starwood brands which formerly competed in the same market as many of Marriott's similar brands. There are a ton of overlapping hotels and brands as a result of this buyout, and Marriott has seemingly not felt the need to pare down their offerings.
In 2022, Choice Hotels International bought the North and South American operations of Radisson Hotel Group (7). While there was less overlap of brands (Choice mostly operated in the mid-priced and economy segments, while Radisson's offerings skewed toward more upscale markets,) Radisson's mid-priced Country Inn & Suites brand was a former competitor to Choice's Comfort, Quality, and Sleep brands. And Choice's upscale Cambria was in direct competition with many Radisson brands.
Wyndham Worldwide, and its predecessors Cendant Corporation and Hospitality Franchise Systems, have a long history of acquiring numerous hotel brands, including AmeriHost Inn (2000, since dissolved) (8), Microtel and Hawthorn Suites in 2008 (9), AmericInn (2017, unrelated to the similarly-named AmeriHost) (10), and La Quinta in 2018 (11), although their buyout strategy has focused on smaller companies with only one or two brands in their portfolio, rather than the large-scale buyouts done by Choice and Marriott which have included numerous brands and hotel properties. Still, Wyndham now finds itself with a number of mid-priced and economy hotel brands under its umbrella, each having to compete not only with each other, but offerings from other companies as well.
Given these buyouts, it is very likely that any future attempted large scale acquisitions would come under the scrutiny of antitrust laws.
New Brands:
Of course, new hotel brands cropping up is nothing new. But today, we're seeing fewer hotel brands launched by independent players, and more of them created by the corporate giants who already have massive collections of brands under their wings. The intent, of course, is to appeal to a new generation of travelers who have different wants and needs regarding where they stay.
So-called "lifestyle" brands (or "hipster brands," as this author disparagingly calls them) have been cropping up recently, nearly all of them being launched by the giants of the industry. Naturally, each of these new brands competes with that company's more established, traditional brands – mostly in the mid-priced hotel segment. Examples include Hilton's Tru (competes with their Hampton Inns,) IHG's Avid (competes with their Holiday Inn Express,) Marriott's Aloft (competes with their Fairfield Inn,) and Choice's offshoot of their Clarion brand, Clarion Pointe (competes with a number of Choice brands including Quality, Comfort, and newly acquired Country Inns & Suites). How do these new brands attempt to distinguish themselves from their longstanding in-house competition? Typically by offering a more "modern," minimalist product, with brightly colored décor, smaller rooms, space saving "modular" furniture, and features like laminate flooring (instead of carpet) and walk-in showers. Some offer limited breakfast selections, under the marketing label of being "healthy." These hotels do not appeal to this particular author, but they are finding a market, as evidenced by their rapid growth. How much of a threat they pose to their more traditional counterparts remains to be seen.
Extended stay hotels are another fast-growing market. Unlike with the lifestyle brands, often a single company will have multiple extended stay brands in their portfolio. Marriott has TownePlace Suites, SpringHill Suites, and Residence Inn. Choice has MainStay Suites, Suburban Studios, Woodspring Suites, and the newly-created Everhome Suites. Hilton has Home2Suites and Homewood Suites. That is a lot of extended stay brands, and that's not even counting independent players like Extended Stay America or Intown Suites. What are the differences between, say, SpringHill and TownePlace, or Woodspring and Everhome, that might prompt someone to choose one over the other? Is it décor? The size of the breakfast? Price? Other amenities like pools and weight rooms, or the lack thereof? The big hotel executives themselves might be hard-pressed to answer that question.
Guest Loyalty Programs and the "By" Descriptor:
There is one significant advantage to one company owning so many seemingly competing brands. Travelers who are a member of a company's loyalty program (where each stay earns them points that can be redeemed for free hotel stays or other rewards, and frequent guests enjoy tier upgrades which increase their point earnings and entitle them to room upgrades, free meals, or other perks) now have more choices than ever as to where to stay, and still earn points through a single program. Take, for example, a member of the Hilton Honors program. Hilton has them covered whether they need to spend a night off the Interstate (Hampton Inn,) need to stay two weeks on a job assignment (Homewood Suites,) or want to treat themselves to luxury (Waldorf Astoria.)
And to be fair to the big corporations, most are now adding a "By" descriptor to their brands (i.e., Embassy Suites by Hilton, Quality Inn by Choice Hotels, Howard Johnson by Wyndham,) so guests know which large corporate entity they're supporting with their stay. However, this was likely done to make it easier for travelers to identify which hotels are in their reward program's "network," with the greater transparency in brand ownership being an unintended consequence. After all, with so many different brands, it's hard for industry professionals to keep track, let alone the average Craig and Christine Traveler.
The Future?
The lodging industry's history is littered with defunct hotel brands. But the industry was never as centralized as it is today, where the franchise operator not only has to worry about competition from other companies' brands, but also competition from other brands within their parent company's portfolio. Is this sustainable? Which brands will survive and which ones will eventually be relegated to a footnote in history? Time will tell. It can be easy to assume that the newer brands don't have the name recognition that traditional ones do; however, it should be noted that Howard Johnson and Ramada, both over fifty years old, are floundering, with their number of locations dwindling (whether this is the result of more modern competition or Wyndham's mismanagement of the brands is up for debate.) Conversely, Choice's Quality Inn, now over eighty years old, is still showing respectable growth. So longevity is not an absolute predictor of future survival, especially in today's corporate world where profit is king and a brand's history and legacy means comparatively little – unless the corporation can profit from it. Besides, every hotel chain was a new one at one point in time.
Conclusion:
Travelers do indeed, on the surface, have more choices than ever regarding where to spend the night. But considering so many of these brands have overlapping amenities and services, and thus compete at similar price points, the differences between some of them are minimal. Differences mostly come down to décor or "extra" amenities like breakfast or pools, that a chain may or may not offer. Plus, with so many brands being part of one of a few corporate giants, there's far less competition as far as which company your money ultimately goes to. And for the individual hotel operator, their fiercest competitor may very well end up being a fellow hotel under the same corporate umbrella.
It remains to be seen whether this unprecedented level of bloat, in-house competition and overlap is sustainable, and which brands will be on the chopping block if it proves not to be. But for the time being, the biggest players continue to grow bigger, with no signs of slowing down or consolidating their brands. And travelers who take advantage of guest loyalty programs have more locations where they can earn or redeem their points, so they are likely perfectly fine with it.
Sources/References:
1: "A History of Innovation." (n.d.). Choice Hotels International. https://www.choicehotels.com/about/corporate-history
2: "Home Page." (n.d.). Marriott International. https://www.marriott.com/
3: "Home Page." (n.d.). Wyndham Hotels & Resorts. https://www.wyndhamhotels.com/
4: Home Page. (n.d.). Hilton Worldwide. https://www.hilton.com/en/
5: Home Page. (n.d.). Choice Hotels International. https://www.choicehotels.com/
6: "Marriott International Completes Acquisition of Starwood Hotels & Resorts Worldwide, Creating World's Largest and Best Hotel Company While Providing Unparalleled Guest Experience." (2016, September 23). Marriott International. https://news.marriott.com/news/2016...while-providing-unparalleled-guest-experience
7: "Choice Hotels International Completes Acquisition of Radisson Hotels Americas." (2022, August 11). Choice Hotels' News. https://media.choicehotels.com/2022...letes-Acquisition-of-Radisson-Hotels-Americas
8: Bloom, Elliott. (2000, October 1). "Cendant Corporation Completes Acquisition of AmeriHost Inn(R) and AmeriHost Inn and Suites(SM) Brand Names and Franchising Rights." Hospitality Net. https://www.hospitalitynet.org/news/4006056.html
9: Clausing, Jeff. (2008, June 3). "Wyndham acquires Microtel and Hawthorn brands from Hyatt." Travel Weekly. https://www.travelweekly.com/Travel...uires-Microtel-and-Hawthorn-brands-from-Hyatt
10: Eisen, David. (2017, July 18). "Wyndham to buy AmericInn, management arm for $170 million." Hotel Management. https://www.hotelmanagement.net/transactions/wyndham-to-buy-americinn-three-rivers-hospitality
11: "Wyndham Worldwide Completes Acquisition Of La Quinta Holdings." (2018, May 31). PRNewsWire. https://www.prnewswire.com/news-rel...uisition-of-la-quinta-holdings-300657122.html
