The big are getting bigger. That sums up what’s been happening in Asia and looks all but certain to continue. Whether in the OTA space or in the hotels’ space, buying sprees, mergers and acquisitions are all the rage.
Meanwhile, hoteliers may be wondering what their play is in all this, and how can they maintain control of their own inventory and pricing. The answer, above and beyond all the noise, remains the same: Hotels will thrive if they know exactly who their customers are and what the ideal experience is for those guests. That is something the hotels can definitely still control and will always be able to.
But of course, keeping abreast of what the big conglomerates are doing – especially those that are in our immediate space – is important. So who’s been hogging the headlines?
In efforts to create an open tech stack for hospitality that transforms how the industry connects across systems and industries, Shiji Group has begun acquiring assets to add to its tech stack. It recently bought StayNTouch, a cloud-based hotel management tool.
“Our vision is that the future of hotel technology needs to be open and accessible to every hotel group or tech provider,” said Shiji Group’s COO Kevin King (translated).
In the OTA space, the fight to be the super app of the moment is fiercely contested. Tongcheng-elong, itself a merged entity from 2017 and backed by Ctrip, Tencent and Dalian Wanda Group, is planning an IPO in November and media reports put its worth at a possible US$5.5 billion. Meituan Dianping, its app used by more than 300 million people, on its recent debut on the Hong Kong Stock Exchange upped its value 5% on its first day, giving it a market valuation of about US$50 billion. The numbers are mind-numbing. These big guns now have the funds to back their talk and more acquisitions will surely be afoot.
Further south, Booking Holdings purchased Sydney-based HotelsCombined recently to bolster its metasearch unit’s footprint in Asia Pacific. HotelsCombined is now part of the Kayak unit.
Hotels are teaming up, too
Hotels are also seeing their fair share of action. In 2017, Accor bought Australian chain Mantra; Thailand’s Minor International, already with more than a quarter share of Spain’s NH Hotel Group, has announced its target shareholding in NH Hotel Group to be around 51% to 55%.
So, what is important for hoteliers to remember as competitors, vendors and distributors achieve greater economies of scale all around them?
First, consolidation without integration doesn’t help anybody.
Marriott is the world’s largest collection of brands after the Starwood merger, but it still suffered a setback in August when the rollout of the companies’ combined loyalty program went poorly. Those questions around reconciling points balances and status will get ironed out, but the episode shows how difficult integrations among hospitality companies really is.
This is where consolidation in the hotel technology space helps unbranded properties and smaller companies. Clear winners will start to emerge in this shakeout for systems that optimise everything from property and revenue management to staff communication and operations. No one property has to build its own solution to handle it all.
The more these vendors integrate with each other — and if they don’t, that should be a deal-breaker for their hotel clients — the better able any property will be to build a tech stack with “best of breed” components.
The biggest lodging companies and OTAs are getting bigger, but they’re no match for a property with the right technology and a focused strategy for using its customer data to craft the ideal pricing structure, guest experience and marketing program.
About the Author
Patrick Bosworth is Co-Founder and CEO of Duetto, hospitality’s Revenue Strategy Platform, based in San Francisco.
Featured photo credit: iStock
