Horwath HTL Croatia have written the next in our series of industry reports: Consolidation within the hotel industry: Global vs. local perspective.
Croatia is becoming more and more aligned with major international tourism trends. Like most other countries in the region, Croatia is experiencing and benefitting from, increased tourism growth and demand. Another significant trend that is making its way into the market is an appetite for mergers and acquisitions within the hotel industry.
The process of consolidation has intensified over the last couple of years, when major industry players ‘woke up’ after several decades of almost complete market inaction. This has additional significance as many other industries are struggling to grow or even maintain current levels post financial crisis. Tourism-related business performance however continues to experience constant growth, thus creating an attractive segment for investors.
The fact is that the Croatia hotel industry is still highly consolidated: 3 of the leading ownership groups control almost half of the total hotel, resort and camping sites capacities in the country.
Globally, the trend is similar: mid November this year Marriott International announced its acquisition of Starwood Hotels & Resorts through a 12,2 billion US$ cash and share transaction, one of the largest of its kind ever seen in the industry. The transaction includes the whole brand and real estate portfolio, as well as management and franchise agreements. So why is this happening, what effect will it have on the market and what lessons can be learned for a developing country like Croatia?