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.
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.