Get a Room: Finding Opportunities in the $18B Boutique Hotel Industry

It’s been nearly 5 years since Marriott Hotels & Resorts shook up the travel world by announcing its intention to acquire Starwood, its high-end hotel competitor.

When the deal closed in the fall of 2016 for $13.6B, Marriott had created the world’s largest branded hotel chain, accounting for 1 in 7 hotel rooms in North America.

While the recent spread of coronavirus has put a chill on the hotel and travel industry, the long-term macro trends that motivated Marriott CEO Arne Sorenson to complete the Starwood acquisition remains.

“The story is that hundreds of millions of new people a year with resources to travel [are entering the market],” he said in 2017. “By 2030, the number of international trips is expected to reach 1.8 billion, [a 50% increase from 2017].”

The two main groups driving this travel trend?

  • wealthier citizens from emerging markets (especially China)
  • and the growing affluence of the experience-seeking millennial demographic

Today, the total revenue for US hotels and motels is estimated at $200B