Like London buses, where you can wait for ever for one to come along and then two turn up almost at once, the hospitality world seems poised to go through a new phase of merger mania. Following hard on the heels of Marriott International’s $12.2bn deal for Starwood Hotels (see news, November 2015), France’s Accorhotels has just captured the Fairmont, Raffles and Swissotel hotel brands for $2.9bn, including three iconic properties - the Savoy in London, the New York Plaza and Singapore’s Raffles (see news, December 2015). But the two deals are unlikely to be the last among global hoteliers planning to grow via mergers or acquisitions: Hilton, IHG, Hyatt and Four Seasons among others are already being tipped to be in the frame for future consolidation. Driving the deals is the changing status of global hoteliers. The past decade has seen them increasingly become asset-lite, leaving the ownership of actual brick-and-mortar properties to financial investors. This means the major chains now earn most of their money from franchising or managing the hotels on behalf of their owners – all backed by sophisticated computer booking systems, loyalty schemes and significant investment in the brands themselves. And boosting the number of brands – either organically or by acquisition - is key to driving growth and revenues. The top ten global hotel chains (as defined by French consultants MKG Hospitality) have some 116 brands between them – and the numbers are growing all the time as new market niches from budget to boutique are identified. Yet for all their slick marketing to promote their worldwide reach, the big hoteliers do not actually dominate the global market. In fact, analysts at Morgan Stanley have calculated that the top ten chains only account for about a third of the estimated 17.5m traditional hotel rooms available worldwide. And none of the ten has a market share of 5% or more; even a combined Marriott/Starwood would only represent 7% of the global market. But consolidation is becoming more than simply a means of growth for the major chains: it is also essential if hoteliers are to compete with the expanding power of Online Travel Agents (OTAs), especially the dominant players Expedia and Priceline/Booking.com, and other newcomers to selling rooms, such as Google and TripAdvisor. Not forgetting, of course, the potential impact on traditional hotels of disruptors such as Airbnb. The huge reach of the OTAs, helped by their massive marketing spend, leaves hotels vulnerable to higher levels of commissions - typically between 20%-25% according to a recent report from consultants HVS – than through other distribution channels. Not surprisingly, hoteliers are very keen to drive more bookings through their own websites rather than OTAs. And this is potentially good news for business travellers. While consolidation among the airlines led to a diminution of the benefits from frequent flyer schemes, hotel groups see them as one of its major weapons in persuading travellers to book directly with their hotels. Marriott CEO Arne Sorenson went out of his way to make this clear in his presentations when announcing the Starwood merger, insisting the best aspects of both the Starwood Preferred Guest (SPG) and Marriott Rewards programmes would be maintained. “Devaluing points or member benefits is not the way to preserve these programmes,” he said. David Churchill Read Buying Business Travel's interview with Arne Sorensen from earlier this year. "Could you have too many brands?" "It’s doubtful. In theory it’s possible and we debate it internally and we’ve been asked about externally, but there’s no sign with our customers that we have too many brands."