The New Universe of Hotel Industry Stakeholders
Spin back a few decades and the hotel world was a more readily described space.
The major players, particularly for full service properties, were the developer/owners (typically private), the branded operators, and commercial lenders.
As with the larger world, there are no longer many simple descriptors. Operators now embrace a wide range of large global companies (many publicly owned) with large brand families along with public and private regional and niche brands, third party operators, franchisors, distribution groups, marketing associations and the like.
Owners now include specialist hotel and mixed use developers, construction groups, private equity funds, REITs and others along with traditional operator/owners, high net worth, sovereign wealth and institutional owners.
Commercial lenders to the segment are now complemented by CMBS and a variety of other capital markets originators, as well as specialist preferred equity, mezzanine and high yield groups.
Consolidation will continue apace as even the largest brands battle to meet the distribution challenges of the online distribution giants and drive down the costs of brand affiliation for owners, much less the base cost of the lodging product itself via the sharing economy disruptors.
As with fast moving consumer goods generally, newer generations look at their hotel purchasing decision differently. They are brand conscious, but not as brand loyal, and more interested to experience new concepts. Technology drives their analysis and booking decisions in ways the industry is still trying to fully understand. And they prefer to interact with integrated online travel solution providers.
It is far easier to start and establish a brand, with a whole new flock of private equity and funded startups focused on cutting edge concepts that can be quickly introduced to savvy customers and quickly grown with the right mix of branding, distribution and operational partnerships. Conventional brands are responding with more attention to IT and consumer marketing backgrounds in their hiring.
Conventional bricks and mortar investors continue to stick to their knitting. However, the right new brand concept can now find early stage financial support from franchisees, specialist funds, private entrepreneurs and others to invest in their facilities. There is still profit potential in ownership but now there is the brave new world of investing in brands, distribution, service and other platforms on their own.