Rumours that two of the world’s biggest hotel companies are planning to “room together” have been exciting investors and industry experts. Globally, the UK-based Intercontinental runs over 4,500 hotels, while US-based Marriott operates 3,700 properties. Analysts at the investment banking group Numis tell the newspaper the Daily Telegraph that, like airlines, “hotel industry consolidation is inevitable at some stage”. A transatlantic bond between IHG and Marriott is “just one of the potential tie-ups”, they said. Such a merger would “create a dominant player in the global hotel market”, with more than 9% of the world’s room supply.
“The strategic rationale for a merger between InterContinental and Marriott is compelling. First of all the strategic growth plans for the two businesses are remarkably similar. Both, for example, have had a long-standing focus on reducing hotel ownership and pursuing management and franchise contracts.
“Secondly, both companies are pursing global growth opportunities by establishing a strong presence in key gateway cities, continuing to develop in large established markets and looking to expand in emerging markets, notably China.”
[pictured: Holiday Inn Resort Phuket, Thailand; courtesy IHG]