Hotel, Cruise Industries in Fewer and Fewer Hands

When you’re trying to choose a hotel or a cruise line, the travel industry may seem as broad and bewildering as the planet itself, with scores of hotel chains and more than 100 cruise ships adrift worldwide. But the business end of the travel industry is probably a lot narrower than most travelers realize.

Just as corporate consolidations in the 1990s shrank the banking and insurance industries to a handful of major players, a select group of very big players in the travel trade seems to be gathering up most of the pieces on the game board.

But we don’t always see the results because those leading companies frequently keep their new subsidiaries running under their old brand names, offering different levels of service to different demographic groups.

There is, unfortunately, no special discount for travelers who know that run-of-the-mill Ramada bedrooms and glitzy Ritz-Carlton suites show up in the same annual report. (Marriott has a controlling interest in both chains.) But these overlaps do sometimes show up in frequent-guest discount programs. And knowing something about these relationships can help a consumer understand broader market forces--for instance, why a Sheraton and a Westin in the same neighborhood are unlikely to get into a price war. (They, too, are siblings, whose parent company is Starwood Hotels.)

The most dramatic example of this small-world phenomenon is probably in the cruise industry, where Carnival reigns supreme.

Carnival Corp., the parent company of Carnival Cruise Lines, has been on a buying spree for about a decade now. It has owned Holland America and Windstar cruise lines since 1989. Carnival also owns substantial portions of Cunard Line, Seabourne Cruise Line and Costa Cruises. Thus, whether you’re hardily partying off Ensenada on the good ship Elation (a Carnival vessel) or sipping a genteel martini in the staid dining room of the Queen Elizabeth 2 (a Cunard ship), your dollars are ultimately headed in the same destination. (And they won’t be lonely. Carnival Corp. grossed about $3 billion last year.)

The hotel industry, too, is full of quiet, happy parents. The American Hotel & Motel Assn., which just finished crunching nationwide numbers from 1998, reports that last year was the most profitable year ever for the U.S. lodging industry--$20.9 billion in pretax profits.

After a flurry of consolidation over the past five years, the largest player in the hotel game is Starwood. Last year, Starwood Hotels and Resorts Worldwide bought Sheraton and Westin hotels. Starwood, often described as the world’s largest lodging company, is also behind Caesars Palace; Four Points hotels (a mid-level chain); the St. Regis hotels in New York, Washington, D.C., Aspen and Philadelphia; and the chic new W hotels (open in New York, San Francisco and Seattle, with Los Angeles to follow in November and 12 other cities expected by 2001).

Marriott, of course, is a familiar name. But that company not only includes Marriott hotels, it owns Renaissance, Courtyard, Fairfield Inn, TownePlace Suites, Residence Inn, SpringHill Suites, Ramada International (which operates outside the U.S.) and about half of Ritz-Carlton.

England-based Bass Hotels & Resorts--a subsidiary of the company that brews Bass Ale--owns Holiday Inn, Crowne Plaza and Inter-Continental hotels. Forte Hotels, another familiar name for visitors to England, owns Le Meridien Hotels and Resorts, a French-flavored chain (once owned by Air France) that has more than 100 locations worldwide.

Accor hotels, based in France, owns the upscale Sofitel, the downscale Motel 6 and a handful of European brands such as Ibis and Formule 1, as well. (Beyond the world of hotels, Accor also owns Europcar auto rentals and Carlson Wagonlit Travel, one of the largest travel agencies in the U.S.)

And on Sept. 7, Beverly Hills-based Hilton Hotels Corp. announced plans to acquire Promus hotels, which includes the Doubletree, Embassy Suites, Hampton Inn, Homewood Suites and Red Lion brands--some 1,400 properties in all, in a deal that will be worth $4 billion if approved by shareholders and federal regulators.

“There really are in this country three major players . . . and that’s Marriott, Starwood and ourselves,” says Marc Grossman, senior vice president of corporate affairs at Hilton Hotels Corp. “It’s all about shelf space. When you go into a supermarket, the idea is that you’re not just seeing Coca-Cola, you’re seeing Diet Coke and Sprite and all these different products”--all part of the Coca-Cola empire, but aimed at slightly different customers.

Of course, there are exceptions to every rule, and some familiar travel industry names aren’t as universal as they seem. For instance, most consumers think Hilton is a single global company, which is not even close.

As noted above, all non-casino Hilton hotels in the U.S. are managed or franchised by Hilton Hotels Corp. in Beverly Hills (which also owns the Palmer House in Chicago and the Waldorf-Astoria in New York and manages 12 Conrad hotels overseas). But in 1967, Hilton sold the overseas portion of its empire to TWA. These days, however, use of the Hilton name outside the U.S. belongs to Hilton Group Plc., based in London.

To further complicate matters, the domestic Hilton last year spun off its gaming properties to form a separate entity called Park Place Entertainment.

Thanks to marketing agreements among the three companies, however, the hotels’ frequent-guest programs overlap, and callers to (800) HILTONS can make reservations at any Hilton in the world--except, oddly, the Atlantic City Hilton, which maintains its own toll-free number.

*

Christopher Reynolds welcomes comments and suggestions, but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053, or send e-mail to chris.reynolds@latimes.com.