Q4 2021 Covid development update: Marriott and Hilton slumps hit pipeline [Infographic]

by | 08 Nov 2021 | Portfolio

A selection of recently completed projects from the top six hotel groups

The final part of our exclusive series compares and contrasts the top six hotel groups’ commitment to investing in new hospitality schemes since the start of the crisis.

It’s clear that Covid19 has had a seismic impact on the hospitality sector, creating unprecedented challenges for Marriott International, Hilton Worldwide, Accor, IHG, Hyatt Hotels Corporation and Radisson Hotel Group. Here, we look at how the development slate of the top six hotel groups has fared in the context of the global health emergency.

Together, these industry giants wield enormous influence, with nearly 30,000 hotels and a footprint spanning the vast majority of the world’s countries. This put them well and truly in the firing line when the rapid spread of coronavirus in early 2020 prompted government after government to impose strict lockdowns, curfews and travel bans.

The top six hotel groups’ pipeline holds firm

At the beginning of the pandemic, we asked our dedicated research team to track what happened to the top six hotel groups’ ambitious expansion plans, and we’re sharing these stats now for the very first time:

Quarter Date Hotel projects in progress
Q2 2020 04/03/2020 or 05/13/2020* 3,186
Q3 2020 07/02/2020 3,150
Q4 2020 10/02/2020 3,176
Q1 2021 01/06/2021 3,246
Q2 2021 04/13/2021 3,244
Q3 2021 07/02/2021 3,126
Q4 2021 10/04/2021 3,059

*Note: Owing to unforeseen challenges at the outset of the pandemic, the first batch of data was collected on 04/30/2020 for Marriott International and Hilton Worldwide, and 05/13/2020 for Accor, IHG, Hyatt Hotels Corporation and Radisson Hotel Group

What we can see from the above is that the top six hotel groups collectively had 3,186 active hotel projects as of late April / early May 2020 – a time when Covid19 was running riot across key hospitality markets in Europe and North America – but that the total had dipped to 3,059 by 4 October 2021. This works out as a 4% drop over the course of 18 months, which isn’t something to be celebrated by any means, though equally we should probably point out that this is a far smaller decline than many in the industry feared early on. All things considered, the hotel development pipeline has remained pretty resilient in the face of coronavirus really.

However, if we take a closer look at the figures, we can perhaps see a more troubling pattern emerge. After an understandable wobble in the first half of 2020, the total number of live projects actually grew steadily in the second half of the year, peaking at 3,246 as of 6 January 2021. But since then, it’s sunk back down again, plunging to a new low of 3,059 in the most recent figures available.

Nobody can know for sure what’s behind this downward trend, although given the immense financial resources that these multinationals can draw on and the increasingly favourable economic climate, we would’ve expected activity levels to rise rather than fall this year.

Marriott and Hilton are reining in expansion

To get a better understanding of what’s going on, it may be helpful to examine how each of the top six hotel groups is performing side by side:

Immediately, we can see that Marriott and Hilton have cut the size of their pipelines the most, with the former having 12% fewer active projects as of 4 October 2021 compared to 18 months ago, and the latter recording 11% fewer over the same timeframe. This contrasts markedly with the rosier picture over at Accor, which has 8% more, and IHG, with 6% more. The other two members fall somewhere in between these extremes – Hyatt has 4% more while Radisson has 3% fewer.

Another interesting point is that these groups appear to have adopted very different approaches towards investment. Marriott and Hilton have been steadily whittling down their development slates over the last 18 months (although the former’s definitely been more ruthless from Q2 2021 onwards), while totals initially rose at Accor and Radisson (peaking at the start of Q2 2021 for both), but have since fallen back. The figures climbed higher and higher at IHG before plateauing at the beginning of Q2 2021, meanwhile, and they’ve remained fairly steady throughout over at Hyatt.

Top six hotel groups torn between expansion and consolidation

So what are the key takeaways from all this? Viewed as a whole, the top six hotel groups’ pipeline has remained remarkably steady amid the uncertainties caused by Covid19, although there are worrying indications that total project numbers peaked at the start of 2021, and have since tailed off.

Interestingly, we’ve also uncovered evidence that the top six hotel groups are responding very differently to the unique set of challenges posed by coronavirus. Marriott and Hilton have appeared pretty cagey when it comes to adding new schemes over the last 18 months, while Accor and Radisson have been significantly more ambitious, with Hyatt and Radisson left to occupy the middle ground. And somewhat surprisingly, it seems that all of them have adopted a relatively wary approach so far this year.

Of course, hopes are rising that key international markets are now finally getting to grips with coronavirus as vaccine programmes and effective treatments get rolled out around the world. So it’ll be fascinating to see if and when the top six hotel groups decide to ramp up investment once more – or if the caution shown by Marriott and Hilton thus far is a sign of things to come.

Click here to read our exclusive Q4 2021 Covid development update series in full: Marriott International | Hilton Worldwide | Accor | IHG | Hyatt Hotels Corporation | Radisson Hotel Group | Marriott and Hilton slumps hit pipeline

Many TOPHOTELNEWS articles draw on exclusive information from the TOPHOTELPROJECTS construction database. This subscription-based product includes details of thousands of hotel projects around the world, along with the key decision-makers behind them. Please note, our data may differ from records held by other organisations. Generally, the database focuses on four- and five-star schemes of significant scale; tracks projects in either the vision, pre-planning, planning, under-construction, pre-opening or newly opened phase; and covers newbuilds, extensions, refurbishments and conversions.

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