First Rental Cars, Now Hotels Consolidate

It’s been awhile since I studied Anti-Trust in law school, but it sure looks to me like a couple consumer-oriented industries are getting awfully concentrated.

marriottAnd I’m not just talking about airlines and cable companies.

The latest example of “the urge to merge”:  Marriott Hotels gobbling up competitor Starwood for over $12 billion.

Competing with AirBnB

Is the acquisition anti-competitive?

Put it this way:  at least for consumers, I certainly doubt that it’s pro-competitive (likely casualty #1:  Starwoods’ especially cushy points program for frequent guests).

starwood2But whether or not the combination rises to the level of legally anti-competitive (and worthy of antitrust scrutiny) depends on how  — and where — you define the hospitality market.

Dawn of the “Mega-Brand”

The two key criteria:  1) geographic scope (U.S. or global market); and 2) including AirBnb or not.

I suppose criteria #3 is, “who’s doing the defining?”

So, to pick just one example from another field, Google’s size and market power are just fine with U.S. regulators, but a big issue for the European Union.

Where do things go from here?

One certainly might speculate that the inevitable next development is going to be inter-industry combinations, that link airlines, hotels, AND rental cars all under one roof (“Red Roof,” perhaps?  sorry, I couldn’t resist).

Yup, that’s right:  get ready for Marriott-Delta-Hertz . . .

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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