| Original Question |
[Edited] Dear AnswerTeam, what strategies must a hotel focus on to continue sustainable growth in a post-COVID world? |
| Turnaround Time |
2.5 days |
| Delivered Content Description |
12 content slides, with overview of methodology, a summary slide, and insights on hotel companies that are achieving success in growth, and understanding what they are doing to achieve continued growth in a post-COVID travel environment. The full report includes descriptive statistics on the hotels, growth targets (where available), innovative solutions and strategic priorities. |
| Approach | Customized analysis to suit the specific objectives of the client. Top hotel brands were selected based on commercial success, with a variety if different types of value-added core offers. The report was developed using publicly available information, with additional research on company-specific data points. Annual Reports and company website data formed a basis for much of the strategic and financial analysis, where available. |
| Client | Hotel chain |
The following is an article independently developed from the content contained in the full client report, which focuses on hospitality industry sustainable growth models. This article is published with permission by the client.
The hospitality industry has shown remarkable resilience in the face of recent challenges, with many leading companies implementing innovative growth strategies. We analyzed 10 prominent hotel chains, exploring their unique approaches to attracting guests, boosting revenue, and securing long-term success.
- Marriott International (MAR):
Growth Strategy: Aggressive expansion through acquisitions (e.g., Starwood Hotels) and new business verticals (e.g., Homes & Villas, an Airbnb alternative). Focuses on diverse brands catering to various guest segments.
Growth Figures: Revenue recovered to $23.7 billion in 2023, with forecasted net rooms growth of 5.5% to 6% in 2024.
- Hilton Worldwide Holdings (HLT):
Growth Strategy: Enhances loyalty program engagement (“Hilton Honors”) and invests in technology for contactless check-in and mobile room keys.
Growth Figures: Revenue was $10.23 billion, up from $8.77 billion in 2022, an increase of 16.7%. Anticipated growth in net units in 2024 is 6%.
- Hyatt Hotels Corporation (H):
Growth Strategy: Cultivation of unique experiences through distinct brand offerings (e.g., Andaz, Park Hyatt) and emphasis on guest personalization.
Growth Figures: Revenue grew 13.6% to $6.7 billion in 2023, up from $5.9 billion in 2022, with projected room growth of 5.5% to 6%.
- IHG Hotels & Resorts (IHG):
Growth Strategy: Focuses on midscale and upscale segment growth (e.g., Holiday Inn Express, Kimpton Hotels) and expands into new markets like China and Southeast Asia.
Growth Figures: Revenue reached $4.6 billion in 2023, 17.9% above 2022’s $3.9 billion, with expected system growth of 4% in 2024.
- Accor (ACOR):
Growth Strategy: Leverages strong presence in Europe and Asia Pacific for brand expansion. Emphasizes sustainability initiatives and eco-friendly practices.
Growth Figures: Revenue for 2023 reached €5.1 billion, with predicted growth of units at 3% to 5% in 2024.
- Wyndham Hotels & Resorts (WH):
Growth Strategy: Focuses on brand franchising model and caters to budget-conscious travelers (e.g., Days Inn, Super 8). Expands loyalty program reach.
Growth Figures: Revenue fell by 6.7% to $1.4 billion in 2023, with forecasted growth of rooms at 3% to 4% in 2024.
- Choice Hotels International (CHH):
Growth Strategy: Strengthens franchise network and focuses on conversion opportunities by bringing independent hotels under their umbrella.
Growth Figures: Revenue reached $1.5 billion in 2023, a 10% increase, with anticipated EBITDA growth of 10% in 2024.
- Airbnb (ABNB):
Growth Strategy: Expands into long-term stay options and caters to remote work trends. Offers unique experiences and strengthens partnerships with local hosts.
Growth Figures: Revenue for 2023 totaled $9.97 billion, an 18% increase.
- Booking Holdings Inc. (BKNG):
Growth Strategy: Focuses on online travel agency (OTA) operations with Booking.com and other platforms. Invests in technology to improve customer experience.
Growth Figures: Revenue for 2023 reached $21.4 billion, reflecting a 25% increase from 2022.
- Expedia Group (EXPE):
Growth Strategy: Expands online travel agency reach with platforms like Expedia and Vrbo. Enhances mobile app features and user experience.
Growth Figures: Revenue totaled $12.8 billion in 2023, representing a 10% increase.
Key Takeaways
The information above represents a summary of our analysis on global hotel brands. From the in-depth study, a few key themes emerged as industry-wide strategic plays for 2024. Here is an excerpt of that analysis:
- Targeting Specific Segments: Many hotels will be catering to specific guest segments, offering a diverse range of experiences to attract traveler types such as budget-conscious, luxury-seeking, or family-oriented guests. (e.g., Marriott, IHG). Others will aim to exploit extended-stay travelers, remote workers, or eco-conscious tourists with specialized offerings. (e.g., Airbnb)
- Personalization: Technology investment will enable streamline processes (e.g., contactless check-in, mobile room keys) and personalize guest experiences (e.g., loyalty programs, customized recommendations). (e.g., Hilton, Accor) At the same time, technology can be leveraged to create a unique experiences and offer amenities and activities that can set the hotel brand apart from competitors. (e.g., Hyatt)
- Sustainability: Implementing eco-friendly initiatives will continue to be a priority among global hotel brands, with the aim of reducing environmental impact through sustainable practices, energy efficiency, and responsible waste management. (e.g., Accor)
- Data-Driven Decision Making: AI-enabled management decision support will continue to play a larger role in developing a hotel brand’s strategic direction. AI applications will focus on mining data to identify guest preferences, optimize pricing strategies, and make informed decisions about operations and marketing.
Hotels implementing these winning strategies will position themselves for success in 2024 and beyond, ensuring long-term growth in an increasingly competitive market.