Smith Travel Research and Deloitte have announced an intention to merge their hotel benchmarking operations in a move that will bring consolidation to a crowded market outside of the US.
STR already has a sizeable minority stake in the Bench, a rival to Deloitte’s operation, and if the STR succeeds in consummating the Deloitte deal then it seems likely to fully takeover The Bench as well.
The STR deal with The Bench was struck a year ago and left Jonathan Worsley, one of the founders of Berlin’s International Hotel Investment Forum, as the majority owner with a large minority held by STR.
At the time, this was a coup for The Bench as STR had been lured despite an existing cooperation with Deloitte’s HotelBenchmark. This STR and Deloitte partnership had seen the two combine to provide customers with global figures: STR in North America and Deloitte in the rest of the world.
When The Bench swooped, it was thought most likely that the existing partnership with Deloitte and STR would fall apart. It now seems, however, that STR has negotiated to take out Deloitte’s benchmarking operations.
The Bench had struck a deal with PKF, a consultancy rival to Deloitte, at the start of 2006 to supply PKF with data rather than the consultancy continuing its own benchmarking which, with a 30-year plus history, had been the longest standing in the UK. The Bench has also been working with the hotel consultancy wing of KPMG.
Now it seems that only TRI Hospitality will have its own standalone benchmarking service, HotStats. The TRI offer differs from rivals in its depth and that, in particular, it drills down to operating profit level at the chain hotels in the survey.
The challenge provided by The Bench appears to have been the catalyst for the consultants to review their position in the market. The low-cost model which sees survey participants key in the data directly made life hard for rivals who were similarly focused on providing basic revpar data but within the mindset of a higher-cost accountancy firm model.
In any case, the benefits of having an in-house benchmarking service to consultancies seeking bigger ticket advisory fees looked increasingly less important if there was an independent and low-cost provider of data available.
The details of the STR and Deloitte tie-up have yet to emerge but it is understood that STR will take effective control of the operation. The attraction of folding in The Bench is that a heavy-weight sales team will be added to the data-crunching capabilities of HotelBenchmark.
While the latest moves gives STR a dominant position in the UK, in continental Europe there remains strong rivals. Most notably MKG Consulting in France which is pushing out across Europe but there are other still largely national players such as Hotelcontrol.com which is based in Vienna and covers mostly German speaking countries.