Industry brief: Hotels and motels
It's no tight oligopoly, but the hotel industry is tending that way. A group of about nine companies dominate the field and own the rights to several dozen brand names that serve every desire. These companies are, for the most part, franchisers. Of course, there are also plenty of local hotels and smaller chains not connected with the big chains at all. But these chains tend to capture a large portion of the business market, along with conventions, and a good piece of the high-end resort trade.
The hotel industry is often given as an example of an industry that insiders have trouble controlling, thanks to the relatively low barrier to entry. Just as any of the nine firms here listed here are constantly developing new properties, so too can a newcomer with a moderate amount of capital enter the hotel field.
But the hotel chains have found their way to differentiate their products. That is a uniformity of expectations under one brand. The cross-country driver planning motel stays roughly knows the differences between a Courtyard by Marriott, a Holiday Inn, and an EconoLodge and makes his choice accordingly. Local motels are a gamble, so often a second choice. Likewise, the business traveler knows what to expect from a Marriott or a Sofitel, be it in Orlando, Oslo, or Osaka. Within budget limitations, these will always be chosen over unknown local hotels.
The advantage the big chains over others have is mind space. It's not just marketing, it's also ubiquity. Like cereal boxes on a supermarket shelf, these brands advertise themselves simply by taking up prominent spaces. If they are so common, they must be at least OK, goes the thinking. Given the excessive possible choices, these well-known brands are far more convenient to focus on than researching the specific characteristics of one-off brands.
Top Hotel Chains
| Rank |
Chain |
Rooms (thousands) |
Properties |
| 1 |
Cendant |
540 |
6,400 |
| 2 |
Intercontinental Hotels Group |
538 |
3,500 |
| 3 |
Choice |
402 |
5,000 |
| 4 |
Marriott |
420 (est.) |
2,600 |
| 5 |
Best Western |
320 |
4,000 |
| 6 |
Accor |
312 (est.) |
4,000 |
| 7 |
Starwood |
228 |
739 |
| 9 |
Hilton |
200 (est.) |
2,000 |
| 10 |
Hyatt |
100 (est.) |
212 |
Based on company information
Brands
Cendant (US)
AmeriHost Inn, Days Inn, Howard Johnson, Knight's Inn, Ramada, Super8, TraveLodge, Wingate Inn
Owner of Avis and Budget car rentals, travel services, and so on. See profile.
Intercontinental Hotels Group (UK)
Bristol, Centra, Crowne Plaza, Holiday Inn, Hotel Indigo, Intercontinental, Parkroyal, Posthouse, Staybridge
Changed its name from Bass Hotels in 2003, after its parent sold Bass beer to Interbrew and split of its Six Continents pub and restaurant business in the UK, Company is also a major soft drink company in UK (BritVic)
Choice Hotels (US)
Clarion, Comfort, Flag, EconoLodge, MainStay Suites, Quality, Roadway, Sleep
Marriott (US)
Courtyard, ExecuStay, Fairfield Inn, Marriott, Renaissance, Residence Inn, Ritz-Carlton. Springhill Suites, TownePlace
Also operates time shares
Best Western (US)
Best Western
Accor (France)
Atria, Etap, Formule 1, Ibis, Libertel, Mercure, Motel 6, Novotel, Parthenon, Red Roof, Sofitel, Studio 6, Suitehotel
Owns casinos, also 50% of Carson WagonLit, a major worldwide travel agencies. Also owns 30% of Club Mediteranee
Starwood (US)
Four Points, Luxury Collection, Sheraton, St, Regis, W, Westin
Also tine-share management
Hilton (US)
Conrad, DoubleTree, Embassy Suites, Hampton Inn, Homewood Suites
There's also a Hilton Group (UK), which has some joint ventures with this company.
Hyatt (US)
Grand Hyatt, Hyatt Regency, Park Hyatt
