The merger and acquisition (M&A) trend seen in the the sector over the last year continues to pick up pace, as players fight for control of their markets. Many have acquired or merged to seek scale and better resist shocks to the economy. A merger or acquisition is sometimes the fastest route to growth and to diversify holdings and expand their international footprint. Scale helps when dealing with big online travel agents, and costs can be trimmed. Many companies have joined the trend to tap into a rise in outbound travel, with private equity and real estate funds tapping Asia’s tourism growth particularly. For hoteliers M&A comes following a drop in lodging stocks in 2015.
However, signs of slowing revenue growth for the sector are getting more evident. After weeks of challenges in which Marriott International (NASDAQ: MAR) almost lost out on its pursuit to purchase Starwood Hotels & Resorts (NYSE: HOT) — to Chinese insurer Anbang and its investor group — both hotel companies hosted their shareholder meetings on April 8, 2016, to endorse their newly approved upon merger pact. Maryland-based Marriott will possibly pay approximately US$13.3 billion, or US$77.94 per Starwood share, and the pack will make the world’s largest hotel chain.
Still to come, will be a US$2.1 billion deal for Hong Kong-backed Bluesky Hotels for Canadian hotel REIT InnVest, and the acquisition of Carlson — the owner of Radisson and other hotel brands that are part of Carlson Rezidor Hotel Group — by HNA Tourism Group — a division of aviation and shipping conglomerate HNA Group
Hotels are not the only ones contending for a bigger slice of the pie. In 2015, TripAdvisor (NASDAQ: TRIP) added four small online businesses to its list, while Expedia (NASDAQ: EXPE) absorbed 12 booking services in the last few years. Enterprise Holdings purchased several smaller ridesharing companies and started its own. Even cruise lines joins in the bandwagon, and now, nearly all major cruise line in the world is owned by Royal Caribbean Cruises (NYSE: RCL), Carnival (NYSE: CCL) or Norwegian Cruise Line (NASDAQ:NCLH). #MergentInc #industryreports #hospitalityandtourism
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