Major US hotel chains mapping battle plans for Europe
Major hotel chains that already dominate the US market are looking at a new battleground for future expansion: Europe.
Four Seasons Hotels Inc., Starwood Hotels & Resorts Worldwide Inc. and Marriott International Inc. are stepping up expansion efforts in Europe, where about 34 percent of hotels fly chain flags, Otus & Co. estimates. In the US, they already control about 70 percent of the market, according to Smith Travel Research Inc.
“The chains can build market share in Europe by appealing to visitors from the US, China and India who are likely to seek out internationally recognized brands when traveling,” Rod Taylor, chairman and co-founder of hotel consultants Taylor Global Advisors Ltd., told Bloomberg.
Within the next five to 10 years, the branded chains may increase their market share in the region by 5 percentage points, according to Patrick Scholes, a New York-based analyst at Friedman Billings Ramsey & Co.
Hotel owners have struggled to attract customers in the past two years as the recession deterred vacationers and forced companies to cut travel budgets. “A lodging industry recovery is occurring more quickly in Europe than in the US,” Bloomberg reported.
Hyatt Hotels Corp., the chain controlled by Chicago’s Pritzker family, expects to have a higher percentage of rooms abroad than in the US within a decade, according to Chief Executive Officer Mark Hoplamazian.
Four Seasons, based in Toronto, has 14 hotels in Europe and another seven slated to open in the next three to five years.
Blackstone Group LP’s Hilton Worldwide operates about 184 hotels across Europe. It had 18 openings in the past year, which included takeovers of independent hotels and franchise agreements. That compares with 12 in both 2008 and 2007.
Starwood had 159 European hotels at the end of 2009 and 20 in the pipeline.
Bethesda, Maryland-based Marriott said it expects to double its 40,000 rooms in Europe by 2015 with such brands as the Ritz-Carlton and Bulgari Hotels & Resorts.
“Europe overall may be still dominated by small independents, but in some markets chain operators are already having a much stronger presence,” said Jonathan Goldstein, deputy CEO at Heron International Ltd., a London-based real estate development company.
By David Wilkening
David
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