‘The global hotel landscape is still dominated by western players’

Rationale: Chinese hotel giants are hot on market leader Marriott's heels

The Financieele Dagblad's weekly chart of 28 February has the headline “Chinese hotel giants are hot on market leader Marriott's heels.” And indeed, Jin Jiang and H World Group are number two and four based on the number of hotel rooms worldwide. But only counting rooms gives a distorted picture of reality.

The sober annual figures for 2024: Marriott, with its more than 1.7 million rooms, posted revenue of $25.1 billion and net profit of $2.4 billion. Jin Jiang, with a similarly impressive 1.4 million rooms, came up short of about $2 billion in revenue and $125 million in net profit. Over 10 times less revenue and almost 20 times less profit, for a similar number of rooms: not exactly “on the heels”.

For a fair comparison, journalists, analysts and industry associations should look beyond camera numbers. Without that nuance, investors, students and industry professionals will have a distorted view of the true competitive situation in the global hotel industry. In this case, Chinese chains have certainly grown strongly, with the home country's economy and through foreign acquisitions. But much of their revenue still comes from the domestic budget and mid-range segment, where room rates are generally lower than those of western chains.

In terms of profitability, too, there is no question of “digging in their heels”. Marriott, Hilton, IHG, Accor, Wyndham and Choice hardly own any hotels themselves and earn from lucrative management, franchise and credit card deals. And both Jin Jiang and H World are still struggling with loss-making European divisions.

So for now, in financial terms, the global hotel landscape is still dominated by Western players. The Chinese are impressive builders and deserve our attention. For now, they are not the biggest earners.