Hotel Giants Seek Growth in Europe with Rebrands and Acquisitions

Faced with the challenges of high European construction costs and limited new hotel development, major hotel chains are seeking alternative paths to growth. IHG and Marriott have unveiled ambitious plans to add hundreds of hotels by rebranding independents or converting existing structures into their branded portfolios. This strategy allows them to capitalise on Europe's post-pandemic travel boom.

IHG targets doubling its German presence to over 200 hotels by 2028 through a 30-year franchise deal with Novum Hospitality. Novum properties will be rebranded under IHG's Garner and Holiday Inn lines. Marriott aims to add 100+ hotels in the UK, Italy, Spain, and Turkey through rebrands and conversions by the end of 2026.

"Europe offers huge growth potential with its large number of independent properties and lower penetration of global brands," explained IHG CEO Elie Maalouf.

With European travel projected to remain robust thanks to the return of Asian and business travellers, alongside major events, hotel groups are eager to secure market share. Mark Hoplamazian, Hyatt's CEO, also emphasised the difficulties of financing new construction, making acquisitions and rebranding strategies more attractive.

The European independent hotel segment, while shrinking, still holds significant sway with 59% of the market. This suggests further consolidation potential. Smaller operators may ultimately seek the benefits of global brands as demand levels normalise.