So much for taking a summer vacation. This year, the hotel industry was busy making major moves and investments, as well as launching new brands, properties, and policies.
While we’ve come to assume that summer is a bit of a slower season news-wise — a time to savor the favorable weather outside, and actually take a vacation — that’s not what the hospitality industry was up to this year.
Indeed, this summer, beginning in June and lasting through Labor Day, there was plenty of activity, whether in the form of spinoffs and acquisitions, battles between companies, data breaches, and brand launches.
Here’s a summary of the biggest hotel stories to emerge this summer, and hints of what to expect once we enter into the fall.
The CEOs of Marriott, Hilton, IHG, and Wyndham Hotel Group Are Speaking at Skift Global Forum 2017. Get Tickets Now
Marriott, Hilton, and IHG Got Tougher with Their Cancellation Policies
While it makes a lot of sense to people in the travel industry as to why Marriott, Hilton, and InterContinental Hotels Group would impose stricter cancellation policies, not everyone was pleased to hear the news — especially corporate travel agencies and firms.
But, as TripBam CEO Steve Reynolds explained to Skift, the truth is these new policies most likely won’t impact corporate travel as much as people initially thought they would.
In the future, we should expect to see more hotel brands and companies follow suit, which is something Hilton CEO Christopher Nassetta noted during a second quarter earnings call in July.
However, it’s unlikely those companies and brands will be implementing sweeping, brand-wide policies across all regions and markets. It’s much more likely the big hotel chains will pursue a strategy that Hyatt employs: letting individual hotels determine the best cancellation policies for their respective properties and markets.
Wyndham Decided to Split Itself Up
While it was generally assumed Wyndham Worldwide would eventually split itself up, we didn’t know it would happen so soon. By next year, the company we know as Wyndham Worldwide would comprise two public companies: one made up of its hotels business and the other combining its vacation rental and timeshare businesses.
Both, however, would be united, in some sense, by Wyndham’s reinvigorated Wyndham Rewards loyalty program, Wyndham Worldwide CEO Stephen P. Holmes promised.
The bigger question as Wyndham pursues its spinoff will be what happens to its sizable vacation rentals business in Europe.
Hyatt, Wyndham, and AccorHotels Deepened Their Investments in the Sharing Economy
All three of these major hotel companies made investments in alternative accommodations platforms this summer.
In July, AccorHotels completed its acquisition of Travel Keys, and announced it was combining it with its other rental brand, Squarebreak, under the umbrella of onefinestay, which it acquired in April 2016.
In August, Wyndham announced that its RCI division would purchase London-based LoveHomeSwap, one of the world’s largest home exchange programs.
Then Hyatt, as if to make up for the fact that AccorHotels swooped in and bought up onefinestay after Hyatt had invested $15 million in the company, announced that it had made yet another move toward entering the sharing economy. This time around, Hyatt decided to invest in Oasis, which AccorHotels had previously had a 30 percent equity share in prior to its July announcement regarding the consolidation of its rental brands.
Hyatt Battled Expedia
Hyatt had a very busy summer 2017. When it wasn’t working on its investment in Oasis, and integrating its earlier acquisition of Miraval Group, it was also, in some sense, playing chicken with online travel agency giant Expedia.
Hyatt fired the first shot when it issued a letter to its hotel property owners, warning them of the possibility that their hotels may not be distributed via Expedia if the two companies were unable to reach a favorable new agreement by July 31.
Hyatt also quietly signed a new and restructured distribution agreement with Expedia’s biggest rival, Booking.com, as a hedge against a potential impasse with Expedia.
However, on July 31, the deadline for Hyatt and Expedia to sign a new deal, both companies announced they had reached an agreement in principle, and that deal was formally confirmed on August 18.
The Hyatt-Expedia contract negotiations process was emblematic of the tension that exists between hotels and online travel agencies, as hotels pursue more direct bookings to avoid paying commissions to those sites.
Red Lion Battles Hard Rock
In July, Red Lion Hotels Corp. filed a lawsuit against Hard Rock International for “trade dress infringement, injury to business reputation, and unfair competition.” RLHC alleged that Hard Rock’s newest hotel brand, Reverb, is a carbon copy of its own Hotel RL brand. Launched in October 2014, Hotel RL has seven properties throughout the United States.
The suit brought to mind a similar case that rocked the hotel industry a few years ago: the lawsuit between Starwood Hotels & Resorts and Hilton Worldwide over Hilton’s then-new Denizen brand, which was inspired by Starwood’s own W Hotels.
Midscale Hotels Are Having a Moment (And So Are Soft Brands)
If a hotel company wanted to join the brand bandwagon this year, then that company would launch one of the following two brand categories: a midscale hotel brand or a soft brand collection.
Falling under the midscale brand category, we have the following examples:
- IHG’s as-yet-unnamed midscale hotel brand
- Wyndham’s $170 million acquisition of AmericInn
- Hard Rock’s Reverb brand, which may or may not be inspired by RLHC’s Hotel RL (see above)
- Trump’s new American Idea brand
- Red Lion’s redo of the Signature inn brand
This summer, Wyndham also announced the debut of its first soft brand collection for independent hotels, Trademark Collection, which will target hotels in the three- to four-star range.
Earlier this year, Hilton debuted Tapestry Collection by Hilton, another soft brand collection geared toward hotels with somewhat lower price points than more established collections, which generally skew more toward luxury and upscale hotels.
One thing is sure: We can expect to see more soft brand collections, and midscale brands, from the big hotel companies in the future.
Marriott Teamed With Alibaba
Marriott smartly formed a joint venture with China’s e-commerce giant Alibaba Group. Given that China is expected to lead the growth of the middle class worldwide, it’s insightful on Marriott’s part to be doing all it can to establish loyalty and brand recognition with the crucial Chinese travel market sooner rather than later.
Ian Schrager Wants to Reinvent the Boutique Hotel — Again
In June, Skift spoke one on one with legendary boutique hotelier Ian Schrager about his newest project, Public New York, and he described how he intends to reinvent the boutique hotel yet again. This time, he’s doing it by adding tech and business smarts to the tried-and-true formula he and other early boutique hotel pioneers perfected nearly 40 years ago.
Sabre’s Data Breach Caused a Lot of Headaches
Four Seasons Hotels and Resorts, Trump Hotels, Kimpton Hotels & Restaurants, and RLHC were the latest hotel companies to go through a major data security breach, although this time the breach took place via their third-party hotel reservations provider, Sabre. The breach impacted hotel guests who booked their rooms through third-party sites such as online travel agencies.
Everyone Is Testing Voice-Powered Rooms
One type of hotel tech that we’re keeping a close eye on is voice-activated rooms, powered by devices like Google Home and the Amazon Echo. In June, we learned that Best Western is joining its peers Marriott and Wynn Resorts by piloting the inclusion of artificial intelligence-powered smart speakers in guest rooms.
While it seems likely these devices may soon be as ubiquitous as iHome docking stations were just a few years ago, we also wonder if they’ll prove to be just as outdated in a few years — or if that technology will only continue to evolve and become more essential.
Tags: accor, expedia, hilton, hyatt, ian schrager, ihg, marriott, public hotels, wyndham
Photo credit: Hyatt Hotels made plenty of headlines this summer. Pictured here is the Andaz Napa. Hyatt