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Latest hotel deal puts more rooms in the hands of few hospitality companies

Latest hotel deal puts more rooms in the hands of few hospitality companies
The La Quinta Inn & Suites Dallas is part of the ongoing consolidation of the hotel industry with the latest deal being Wyndham Worldwide's plan to acquire La Quinta Holdings for $1.95 billion. (Wyndham Worldwide, La Quinta Holdings)

The news last week that New Jersey-based Wyndham Worldwide is acquiring smaller rival La Quinta Holdings for $1.95 billion is only the latest in a series of deals to consolidate the nation's hospitality industry.

But travelers shouldn't fear that more of the country's hotel rooms are in the hands of a few giant hotel companies, according to industry experts, who say the hotel industry still has plenty of competition.

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Wyndham, with 8,350 hotels, including brands such as Ramada, Days Inn, Howard Johnson and Travelodge, will add the 900 managed and franchised hotels branded as La Quinta Inn & Suites, La Quinta Inn and LQ Hotel. The deal is scheduled to close this year.

Wyndham hotels are mostly lower and mid-scale brands while La Quinta hotels are primarily mid-scale and upper mid-scale properties.

Several merger and acquisition deals have been announced in the last few years, putting nearly half the nation's 53,400 hotels under the control of six hotel giants — Marriott, Hilton Worldwide, Intercontinental, Wyndham Worldwide, Choice Hotels and Best Western Hotels & Resorts.

The biggest deals took place in 2016 when Marriott International Inc., the world's largest hotel company, took over Starwood Hotels & Resorts Worldwide Inc. in a $13-billion deal.

Industry experts say the consolidation of the hotel industry should not result in unusually high rates for guests because giant hospitality companies operate many brands, ranging from cut-rate hotels to swanky, luxury inns.

"Hotels compete on a local basis much more than airlines or car rental companies do," said Bjorn Hanson, a hospitality expert at New York University's Preston Robert Tisch Center for Hospitality and Tourism.

Plus, he noted that short-term rental platforms such as Airbnb have surged in popularity, offering an extra supply of rooms especially during special events that increase demand for rooms like a sporting championship or a holiday.

To read more about the travel and tourism industries, follow @hugomartin on Twitter.

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