Lodging Industry Trends

Acquisitions, Consolidation

Hotel chains' marketing efficiencies drive acquisitions, and increasingly, so do REITs. The number of unaffiliated, independent hotels decreased more than 30 percent over a recent 10-year period. REIT managers acquire companies to take them private or, conversely, to take them public; the trend goes in cycles. In times of tight capital markets or slower hotel profit growth, consolidation usually slows but doesn't stop.

More Corporate Services

Building on relationships with corporate travelers, hotels are providing a wider array of business services. Among the most popular are technical support for meetings, catered functions, food service, business communications, printing and copying, rewards programs, and extended-stay facilities for corporate employees. Many hotels market customized meeting packages to draw business groups and conventions. Meeting planners' demand for T1 lines, wireless Internet, and high-speed Internet access is becoming the norm.

Extended-Stay Hotels

Occupancy rates in the growing segment of US extended-stay hotels, popular for customers staying at least five nights, are consistently outperforming other hotel segments. Almost 30 extended-stay chains and several non-chain, extended-stay hotels now exist in North America. The number of extended-stay rooms is increasing rapidly, which may be due to lower guest turnover and operating costs. Most of these hotels offer lower prices than traditional hotels, efficiency kitchens, and limited maid service, although upscale facilities are available in some markets.

Green Initiatives

The hotel industry is developing green initiatives in response to consumers' growing environmental concerns. Many hotel companies have an environmental specialist, and the American Hotel & Lodging Association has a certification program that includes inspections. Current green efforts affect the frequency of laundry operations, types of lighting, and packaging of bathroom supplies. Conservation efforts, such as washing linens only on customer request, reduce hotels’ environmental impact and operating expenses.

Designer Hotels

Designer hotels have become trendy, as companies look for ways to be innovative and compete with upscale, independent boutique hotels. Many companies, even some with the more traditional luxury brands, are successfully launching designer hotels. For example, Starwood is aggressively marketing its designer hotels under the St. Regis, The Luxury Collection, and W brands. Hotels within the same designer brand often are uniquely styled and different from one another.