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Hotel Chain Strategy - March 2016

“Brand proliferation is likely to continue as the big chains attempt to compete in each nook and cranny of the hotel market through offering a specifically tailored product. Consolidation will go forward in the current low interest rate environment as chains continue to feel the need to ‘bulk up’ as overall growth in the hotel market slows. Otherwise OTAs [online travel agents] are likely to experience a decline in their influence as hotel chain mobile app usage boosts direct bookings.”
– Jessica Kelly, Senior Tourism Analyst

This report looks at the following areas:

  • What are the expansion strategies used by the major chains?
  • What are the branding strategies of the major chains?
  • What strategies are the major chains using to attract more direct bookings?
  • What strategies are the major chains using to meet the challenge of sharing-economy accommodation-rental platforms such as Airbnb and HomeAway?
  • What strategies do gaming groups (for example Wynn Resorts, Sands, etc) use for their hotels?
  • What are the hotel strategies used by the large tour operators (eg TUI, Thomas Cook, etc.)
  • What are key strategic considerations for hotel-owning entities such as REITS, property fund management companies and private equity funds?

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Table of contents

  1. Introduction

      • Key findings
      • Data Sources

        • Abbreviations

          • Issues in the Market

              • Consolidation of the hotel sector
                • OTAs and their growing dominance of distribution
                  • Competition from accommodation-rental platforms
                    • Security concerns
                    • Global Summary

                        • Economic outlook
                          • Nominal vs. PPP
                            • Figure 1: World Economic Outlook projections, year-on-year % change (unless otherwise noted), January 2016
                          • Oil and commodity impact
                            • Outlook for commodity prices
                              • Figure 2: Forecast for commodity prices, 24/11/15
                            • Interest rate outlook
                              • Figure 3: Forecast for 3-month Libor rates & 10-year government bond rates by currency zone, 24/11/15
                            • Outlook for exchange rates
                              • Figure 4: Exchange rate forecasts, 24/11/15
                            • HNWIs worldwide
                              • There are about 14.6 million HNWIs worldwide
                                • Figure 5: Growth in HNWI population by region, 2009-14
                                • Figure 6: Growth in HNWI wealth by region, (US$ trillion), 2009-14 & 2014- 17
                              • HNWI segmentation
                                • Figure 7: HNWI population segmented by wealth category, 2014
                              • HNWI by country
                                • Figure 8: HNWI population by country*, 2014
                              • The middle class has been gutted
                                • Polarisation of the hospitality offer
                                  • Figure 9: Middle class losing ground in the US, 1971 & 2015
                                • Hotel capacity
                                  • Figure 10: Hotel capacity* by region worldwide, 2015
                                • Global development pipeline
                                  • Asia Pacific
                                    • Caribbean/Mexico
                                      • Central/South America
                                        • Europe
                                          • The Middle East and Africa
                                            • US
                                                • Figure 11: Top 10 US hotel markets by rooms under construction, 30 November 2015
                                              • Top ten chains
                                                • 1.4 million rooms in the pipeline
                                                  • Figure 12: The 10 largest hotel companies* by room count, 2016
                                                • Leading hotel groups in the US
                                                  • Figure 13: Leading hotel groups in the US ranked by number of rooms, June 2015
                                                • Leading hotel groups in Europe
                                                  • Figure 14: Top 5 hotel groups in Europe at 1 January 2014 & 2015
                                                • Hotel performance
                                                  • Figure 15: Hotel performance by region, YTD November 2014 & 2015
                                                • Trend in hotel rates
                                                  • Figure 16: Hotel rates in the UK & Ireland, Q3 2014-Q3 2015
                                                  • Figure 17: Hotel rates in Europe, Q3 2014-Q3 2015
                                                  • Figure 18: Hotel rates in Asia Pacific, the Americas & the Middle East , Q3 2014-Q3 2015
                                                • Brand satisfaction results
                                                  • Keeping up to date
                                                    • Luxury brands
                                                      • Figure 19: Luxury brand overall ranking & score (out of 6), 2015
                                                    • Four Seasons
                                                      • Ritz-Carlton
                                                        • Luxury score improved
                                                          • Pipeline and performance
                                                            • Figure 20: North American luxury Brand Satisfaction Ranking*, (score out of 6), 2015
                                                          • Upper-upscale brands
                                                            • Figure 21: Upper-upscale brand overall ranking & score (out of 6), 2015
                                                          • Westin tops upper-upscale segment
                                                            • Hyatt Regency runner up
                                                              • Figure 22: North American upper-upscale Brand Satisfaction Ranking, (score out of 6), 2015
                                                            • Select service surpassing full service in the upscale segment
                                                              • Figure 23: Upscale brand overall ranking & score (out of 6), 2015
                                                            • Hyatt Place leads upscale
                                                              • Aloft and Four Points moving up
                                                                • Radisson trying to catch up
                                                                  • Performance
                                                                    • Figure 24: North American upscale Brand Satisfaction Ranking, (score out of 6), 2015
                                                                  • Best Western Plus wins upper-midscale
                                                                    • Figure 25: Upper-Midscale brand overall ranking & score (out of 6), 2015
                                                                  • Best Western Plus
                                                                    • SpringHill Suites
                                                                      • Hampton by Hilton
                                                                        • Performance and pipeline
                                                                          • Figure 26: North American upper-midscale Brand Satisfaction Ranking, (score out of 6), 2015
                                                                        • Midscale segment
                                                                          • Figure 27: Midscale brand overall ranking & score (out of 6), 2015
                                                                        • Wingate by Wyndham
                                                                          • La Quinta
                                                                            • Best Western
                                                                              • Performance
                                                                                • Figure 28: North American midscale Brand Satisfaction Ranking, (score out of 6), 2015
                                                                              • Upscale extended-stay
                                                                                • Figure 29: Upscale extended-stay brand overall ranking & score (out of 6), 2015
                                                                              • Homewood
                                                                                • Residence Inn
                                                                                  • Staybridge Suites
                                                                                    • Figure 30: North American upscale extended-stay Brand Satisfaction Ranking, (score out of 6), 2015
                                                                                  • Pipeline and performance
                                                                                    • Midscale extended-stay
                                                                                      • Figure 31: Midscale extended-stay brand overall ranking & score (out of 6), 2015
                                                                                    • Candlewood Suites
                                                                                      • TownePlace Suites
                                                                                        • Pipeline and performance
                                                                                          • Figure 32: North American midscale extended-stay Brand Satisfaction Ranking, (score out of 6), 2015
                                                                                      • Consolidation of the Hotel Sector

                                                                                          • Valuation of takeover targets
                                                                                            • Figure 33: Value of takeover targets in prior hotel transactions, 2005-14
                                                                                          • Marriott’s bid to take over Starwood
                                                                                            • Creating the world’s biggest hotel group
                                                                                              • Starwood was for sale
                                                                                                • Figure 34: Starwood Hotels & Resorts share price, 2015
                                                                                              • Vistana sale distribution
                                                                                                • Valuing the deal
                                                                                                  • Figure 35: Estimated TEV/EBITDA multiples for a selection of publicly traded hotel companies, 2015
                                                                                                • Starwood valuation
                                                                                                  • Figure 36: Base case & conservative case forecasts for Starwood operating results, (US$m), 2015-20*
                                                                                                • Marriott valuation
                                                                                                  • Figure 37: Base case & conservative case forecasts for Marriott operating results, (US$m), 2015-20*
                                                                                                • The implied exchange ratio calculated
                                                                                                  • Figure 38: Estimated exchange ratios calculated, 2015
                                                                                                • Too many brands?
                                                                                                  • Figure 39: Combined brand portfolio of Marriott & Starwood by chain scale, 30 September 2015
                                                                                                • Geographical reach and overlap
                                                                                                  • How will the merger impact hotel owners?
                                                                                                    • Anbang crashes the party
                                                                                                      • Marriott sweetens its offer
                                                                                                        • But Anbang may come back with an even higher offer…
                                                                                                          • AccorHotels to buy FRHI
                                                                                                            • Portfolio details
                                                                                                              • FRHI performance
                                                                                                                • Motivation for sale of FRHI
                                                                                                                  • FRHI’s properties
                                                                                                                    • Strategic advantage for AccorHotels
                                                                                                                      • Marriott vs. AccorHotels
                                                                                                                        • Hotel M&A part of cyclical trend
                                                                                                                          • OTA/industry pressure
                                                                                                                            • Blackstone picks up Strategic Hotels & Resorts
                                                                                                                              • Figure 40: Strategic Hotels & Resorts' share price, 2006-15
                                                                                                                            • Strategic’s portfolio
                                                                                                                              • Business strategy
                                                                                                                                • Internal growth strategy
                                                                                                                                  • External growth strategy
                                                                                                                                    • Asset disposal strategy
                                                                                                                                      • Balance sheet management strategy
                                                                                                                                        • Capital allocation strategy
                                                                                                                                          • Ownership of hotels
                                                                                                                                            • Hotel management agreements
                                                                                                                                              • Consolidation in China
                                                                                                                                                • Jin Jiang buys Plateno
                                                                                                                                                  • Jin Jiang profile
                                                                                                                                                    • Plateno profile
                                                                                                                                                      • Strategic outlook
                                                                                                                                                        • BTG buys Homeinns
                                                                                                                                                          • Homeinns profile
                                                                                                                                                            • Profits under pressure
                                                                                                                                                              • Terms of the transaction
                                                                                                                                                                • BTG profile
                                                                                                                                                                  • M&A in Oceania
                                                                                                                                                                    • Asian investors keen on Australian hotels
                                                                                                                                                                      • Recent transactions
                                                                                                                                                                        • Lots of deals in the month of May
                                                                                                                                                                          • Second half of 2015 transactions
                                                                                                                                                                            • More to come in 2016
                                                                                                                                                                              • Boutique merger in US
                                                                                                                                                                                • A complementary fusion
                                                                                                                                                                                  • Management structure
                                                                                                                                                                                    • Targeted synergies
                                                                                                                                                                                    • OTAs and their Growing Dominance of Distribution

                                                                                                                                                                                        • Channel trend
                                                                                                                                                                                          • Figure 41: Booking channel breakdown for individual reservations at hotels in the top 50 international markets, Q3 2014 & 2015
                                                                                                                                                                                        • GDSs
                                                                                                                                                                                          • Amadeus
                                                                                                                                                                                            • Sabre
                                                                                                                                                                                              • Travelport
                                                                                                                                                                                                • OTAs
                                                                                                                                                                                                • Competition from Accommodation-Rental Platforms

                                                                                                                                                                                                    • Airbnb impacting New York hotel market
                                                                                                                                                                                                      • BHA lashes out at Airbnb
                                                                                                                                                                                                        • Strategies to confront the ‘sharing economy’
                                                                                                                                                                                                          • Choice to expand its holiday-rental platform
                                                                                                                                                                                                            • Be Mate offers hotel services for rental apartments
                                                                                                                                                                                                              • Selection criteria
                                                                                                                                                                                                                • AccorHotels buys into holiday rentals market
                                                                                                                                                                                                                  • Squarebreak
                                                                                                                                                                                                                    • Oasis Collections
                                                                                                                                                                                                                    • Security Concerns

                                                                                                                                                                                                                        • Terrorism on the rise
                                                                                                                                                                                                                          • Figure 42: Terrorist incidents at hotels by country, 2015-16
                                                                                                                                                                                                                        • Paris attacks
                                                                                                                                                                                                                          • Figure 43: Hotel performance in Paris, Q1, April 2014 & 2015
                                                                                                                                                                                                                        • November attacks compound the problem
                                                                                                                                                                                                                          • Attacks in Tunisia
                                                                                                                                                                                                                            • Beach-resort hotel attacked
                                                                                                                                                                                                                              • Aftermath of the attack
                                                                                                                                                                                                                                • Tourists attacked in Egypt
                                                                                                                                                                                                                                  • Government steps up security
                                                                                                                                                                                                                                    • Cyber-attacks a growing danger
                                                                                                                                                                                                                                      • Hospitality sector vulnerable to attack
                                                                                                                                                                                                                                        • Hilton investigating hacking at its hotels
                                                                                                                                                                                                                                          • White Lodging data breach investigated
                                                                                                                                                                                                                                            • Hacked data at risk
                                                                                                                                                                                                                                              • Customers advised to initiate a fraud alert
                                                                                                                                                                                                                                                • 250 Hyatt hotels in data breach
                                                                                                                                                                                                                                                  • Apps present a risk
                                                                                                                                                                                                                                                    • What is the risk?
                                                                                                                                                                                                                                                      • The crux of the problem
                                                                                                                                                                                                                                                        • Addressing security concerns
                                                                                                                                                                                                                                                          • Case example of a data breach
                                                                                                                                                                                                                                                            • Using technology to upgrade hotel security
                                                                                                                                                                                                                                                              • Tech-friendly hotel safes
                                                                                                                                                                                                                                                                • Eliminating lock hardware
                                                                                                                                                                                                                                                                  • Kaba, a security specialist
                                                                                                                                                                                                                                                                    • VingCard Elsafe minimises lock hardware
                                                                                                                                                                                                                                                                      • Fairfield Inns & Suites property in Brooklyn
                                                                                                                                                                                                                                                                        • CISA eSIGNO, a contactless locking system
                                                                                                                                                                                                                                                                          • Handheld access
                                                                                                                                                                                                                                                                            • Starwood’s keyless system
                                                                                                                                                                                                                                                                              • Other hotel companies going keyless
                                                                                                                                                                                                                                                                                • Apps reinforce direct booking
                                                                                                                                                                                                                                                                                  • Apps provide data about guest preferences
                                                                                                                                                                                                                                                                                    • Keyless to be generalised by 2020
                                                                                                                                                                                                                                                                                      • But there are risks…
                                                                                                                                                                                                                                                                                      • Expansion Strategies of Major Multi-Brand Chains

                                                                                                                                                                                                                                                                                          • Asset-light
                                                                                                                                                                                                                                                                                            • Low risk
                                                                                                                                                                                                                                                                                              • Figure 44: Revenue categories at Marriott International, 2012-14
                                                                                                                                                                                                                                                                                            • Super asset-light
                                                                                                                                                                                                                                                                                              • Figure 45: Franchised hotels’ top 10, ranked by number of franchised hotels, 2015
                                                                                                                                                                                                                                                                                            • The weak link in the chain
                                                                                                                                                                                                                                                                                              • Hilton to spin out property and timeshare
                                                                                                                                                                                                                                                                                                • AccorHotels the exception
                                                                                                                                                                                                                                                                                                  • Very low proportion of franchised hotels
                                                                                                                                                                                                                                                                                                    • AccorHotels’ dual strategy
                                                                                                                                                                                                                                                                                                      • Two core missions
                                                                                                                                                                                                                                                                                                          • Figure 46: AccorHotels’ portfolio by brand & asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                        • Operating structures
                                                                                                                                                                                                                                                                                                          • Development strategy
                                                                                                                                                                                                                                                                                                            • HotelServices
                                                                                                                                                                                                                                                                                                                • Figure 47: AccorHotels' portfolio by geographical location & asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                              • HotelInvest
                                                                                                                                                                                                                                                                                                                • Expansion via partners
                                                                                                                                                                                                                                                                                                                  • Vision Hospitality Group
                                                                                                                                                                                                                                                                                                                    • Figure 48: Vision Hospitality Group’s hotel portfolio, 2016
                                                                                                                                                                                                                                                                                                                  • An active pipeline
                                                                                                                                                                                                                                                                                                                    • Figure 49: Vision Hospitality’s development pipeline, 2016
                                                                                                                                                                                                                                                                                                                  • Host Hotels & Resorts
                                                                                                                                                                                                                                                                                                                      • Figure 50: Host Hotels & Resorts’ hotel portfolio, February 2015
                                                                                                                                                                                                                                                                                                                    • Foreign JVs
                                                                                                                                                                                                                                                                                                                      • Figure 51: Euro JV Funds I & II, 20 February 2015
                                                                                                                                                                                                                                                                                                                    • Other US real-estate investments
                                                                                                                                                                                                                                                                                                                      • Host’s strategy
                                                                                                                                                                                                                                                                                                                        • Katara Hospitality
                                                                                                                                                                                                                                                                                                                          • Figure 52: Katara Hospitality’s portfolio of owned hotels, 2016
                                                                                                                                                                                                                                                                                                                        • Dalian Wanda Group
                                                                                                                                                                                                                                                                                                                          • Hotel portfolio
                                                                                                                                                                                                                                                                                                                            • Figure 53: Wanda Hotels and Resorts’ foreign-branded hotel portfolio, 2016
                                                                                                                                                                                                                                                                                                                            • Figure 54: Wanda Hotels and Resorts’ active pipeline of hotels under construction, 2016
                                                                                                                                                                                                                                                                                                                        • Branding Strategies of Major Chains

                                                                                                                                                                                                                                                                                                                            • Lifestyle segment heats up
                                                                                                                                                                                                                                                                                                                              • Moxy launched in Europe
                                                                                                                                                                                                                                                                                                                                • IHG’s Kimpton acquisition – so far so good…
                                                                                                                                                                                                                                                                                                                                  • Why Kimpton was sold
                                                                                                                                                                                                                                                                                                                                    • Preserving the brand ethos
                                                                                                                                                                                                                                                                                                                                      • Owners still happy
                                                                                                                                                                                                                                                                                                                                        • Overseas expansion
                                                                                                                                                                                                                                                                                                                                          • Moxy and Tru to go head to head
                                                                                                                                                                                                                                                                                                                                            • Smaller is better
                                                                                                                                                                                                                                                                                                                                              • An impressive pipeline to start
                                                                                                                                                                                                                                                                                                                                                • Big ambitions for Tru
                                                                                                                                                                                                                                                                                                                                                  • Midscale market overview
                                                                                                                                                                                                                                                                                                                                                    • Soft brands allow for faster expansion
                                                                                                                                                                                                                                                                                                                                                      • An attractive proposition for independent hotels
                                                                                                                                                                                                                                                                                                                                                        • Enhances loyalty schemes
                                                                                                                                                                                                                                                                                                                                                          • Design Hotels joins the Starwood network
                                                                                                                                                                                                                                                                                                                                                            • Hyatt launches ‘The Unbound Collection’
                                                                                                                                                                                                                                                                                                                                                              • Four properties in the active pipeline
                                                                                                                                                                                                                                                                                                                                                                • Branding criteria
                                                                                                                                                                                                                                                                                                                                                                  • Social media important
                                                                                                                                                                                                                                                                                                                                                                    • Hyatt to move Into river cruising?
                                                                                                                                                                                                                                                                                                                                                                    • Strategies to Grow Direct Booking

                                                                                                                                                                                                                                                                                                                                                                        • Harnessing loyalty schemes
                                                                                                                                                                                                                                                                                                                                                                          • Digital Key only available to HHonors members
                                                                                                                                                                                                                                                                                                                                                                          • Luxury Hotel Strategy

                                                                                                                                                                                                                                                                                                                                                                              • Personalised experiences, employees are key
                                                                                                                                                                                                                                                                                                                                                                                • Empowerment and a decentralised structure
                                                                                                                                                                                                                                                                                                                                                                                  • Location is all important…
                                                                                                                                                                                                                                                                                                                                                                                    • Profitability a key concern
                                                                                                                                                                                                                                                                                                                                                                                      • Being a star hotelier is not enough, however…
                                                                                                                                                                                                                                                                                                                                                                                        • A real-estate expert at the helm
                                                                                                                                                                                                                                                                                                                                                                                          • Finding sites and investors is a challenge
                                                                                                                                                                                                                                                                                                                                                                                          • Gaming Hotel Strategy

                                                                                                                                                                                                                                                                                                                                                                                              • Hotel price a residual value
                                                                                                                                                                                                                                                                                                                                                                                                • Figure 55: Breakdown of revenue by source, Wynn Resorts, 2013-14
                                                                                                                                                                                                                                                                                                                                                                                              • Revenue management is key
                                                                                                                                                                                                                                                                                                                                                                                                • Comparison with conventional hotels
                                                                                                                                                                                                                                                                                                                                                                                                  • Casino hotel guest segmentation
                                                                                                                                                                                                                                                                                                                                                                                                    • Sands’ Paiza Club
                                                                                                                                                                                                                                                                                                                                                                                                      • Room rates are residual
                                                                                                                                                                                                                                                                                                                                                                                                        • Maximising profits not revenues
                                                                                                                                                                                                                                                                                                                                                                                                        • Tour Operator Hotel Strategy

                                                                                                                                                                                                                                                                                                                                                                                                            • Vertical integration at TUI
                                                                                                                                                                                                                                                                                                                                                                                                              • Portfolio of brands
                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 56: Asset management structure, FY 2013-14 & FY 2014-15
                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 57: Geographical dispersion of TUI’s owned hotels (% of beds by region), FY 2013-14 & FY 2014-15
                                                                                                                                                                                                                                                                                                                                                                                                              • RIU Hotels & Resorts
                                                                                                                                                                                                                                                                                                                                                                                                                • Robinson
                                                                                                                                                                                                                                                                                                                                                                                                                  • Grupotel Hotels & Resorts
                                                                                                                                                                                                                                                                                                                                                                                                                    • Atlantica Hotels & Resorts
                                                                                                                                                                                                                                                                                                                                                                                                                      • Iberotel Hotels & Resorts
                                                                                                                                                                                                                                                                                                                                                                                                                        • Jaz Hotels & Resorts
                                                                                                                                                                                                                                                                                                                                                                                                                          • Sol Y Mar
                                                                                                                                                                                                                                                                                                                                                                                                                            • MAGIC LIFE
                                                                                                                                                                                                                                                                                                                                                                                                                              • Nordotel
                                                                                                                                                                                                                                                                                                                                                                                                                                • Dorfhotel
                                                                                                                                                                                                                                                                                                                                                                                                                                  • Gran Resort Hotels
                                                                                                                                                                                                                                                                                                                                                                                                                                    • Smartbands for enhanced guest experience
                                                                                                                                                                                                                                                                                                                                                                                                                                      • Functionality
                                                                                                                                                                                                                                                                                                                                                                                                                                        • Testing and implementation
                                                                                                                                                                                                                                                                                                                                                                                                                                          • Advantage for TUI
                                                                                                                                                                                                                                                                                                                                                                                                                                          • Strategies to Enhance On-Property Guest Experience

                                                                                                                                                                                                                                                                                                                                                                                                                                              • Harnessing technology in hotels
                                                                                                                                                                                                                                                                                                                                                                                                                                                • Mobility
                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Alice, a hotel mobile tech startup
                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Automating processes
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Mobile service delivery
                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Automating back-of-house
                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Breaking down language barriers
                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Putting guests in the driver’s seat
                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Customers driving automation of hotel services
                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Top 50 Brands

                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Figure 58: Top 25 hotel brands ranked by room count, 2015
                                                                                                                                                                                                                                                                                                                                                                                                                                                                • 7 Days Inn
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Best Western
                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Holiday Inn Express
                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Holiday Inn
                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Homeinns
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 59: Percentage of room nights booked by booking channel, 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Hilton Hotels & Resorts
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 60: Hilton brand portfolio by region/country & by asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Hampton by Hilton
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 61: Hilton brand portfolio by region/country & by asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Marriott Hotels
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 62: Marriott hotels by location & asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 63: Marriott-branded portfolio* by geographical location, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Super 8
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 64: Super 8 rooms by region , 2015
                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Sheraton
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Courtyard
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Figure 65: Courtyard hotels by location & asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Figure 66: Courtyard-branded portfolio by geographical location, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Days Inn
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Figure 67: Days Inn rooms by region, 2015
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Quality
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • US operations
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Figure 68: Quality’s US portfolio 2010-14
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Figure 69: Quality Hotels outside the US by country location, 2015
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Comfort Inn
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • US operations
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 70: Comfort Inn US portfolio 2010-14
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Foreign operations
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 71: Comfort Inn Hotels outside the US by country location, 2015
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Ibis hotels
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • GreenTree Inn
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Jin Jiang Inn
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Ramada
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 72: Ramada rooms by region , 2015
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Crowne Plaza
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 73: Crowne Plaza’s hotel portfolio & development pipeline by major region, 30 September 2015
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Motel 6
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • DoubleTree by Hilton
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Figure 74: DoubleTree by Hilton brand portfolio by region/country & by asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Mercure
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • La Quinta Inns & Suites
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 75: La Quinta’s hotel portfolio by location & operating structure, year-end 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Hotel design
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 76: La Quinta hotels by operating structure at year-end 2010-14
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Performance
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 77: La Quinta hotels performance by operating structure at year-end 2010-14
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Hilton Garden Inn
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 78: Hilton Garden Inn brand portfolio by region/country & by asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Residence Inns
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 79: Residence Inn hotels by location & asset management structure, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 80: Courtyard-branded portfolio by geographical location, 31 December 2014
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • The next 25 ranked brands
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Figure 81: 26th-50th ranked hotel brands by room count, 2015
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • What Next?

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Further brand segmentation
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Franchising and white-label managers on the rise
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Local market domination
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Brand development trends
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Too much emphasis on Millennials?
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Time for a brand targeting older cohorts?
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Consolidation to continue
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Carlson Rezidor up for grabs?
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Regional chains to be acquired
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Extended Stay America
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 82: Extended Stay America’s share price from the IPO to 2 February 2016
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • La Quinta
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 83: La Quinta’s share price from the IPO to 2 February 2016
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • OTA impact to decline
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Hilton’s ‘Stop Click Around’ campaign

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Companies Covered

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Hotel Chain Strategy - March 2016

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                £1,495.00 (Excl.Tax)