Thai hotel management companies will face tougher competition next year after the recent mergers of big international hotel chains.
AccorHotels' acquisitions of Canada's luxury Fairmont, the Raffles and Swissotel brands earlier this month was the latest in a wave of mergers in the hotel sector.
Last month, Marriott International bought Starwood Hotels and Resorts Worldwide to create the world's largest hotel company, with 1.1 million rooms in 5,500 hotels spanning 100 countries.
Erawan Group president Kamonwan Wipulakorn said competition among hotel chains would grow more intense and commission fees eventually fall.
"The mergers of big international hotel chains will lead to lower costs of marketing and IT networks," she said.
Ms Kamonwan said Erawan's main criteria when selecting a hotel chain were strong branding in the segment, marketing strategy and profitability, which was why the group selected Ibis to manage its economy hotels.
However, Ms Kamonwan said small and medium-sized hotel management companies would face tougher competition and must work harder to survive in the new environment.
"More mergers and acquisitions (M&A) in the hotel business will happen in the future. The number of players in the global market will be reduced," said Chanin Donavanik, chief executive of Dusit International, another hotel management chain in Thailand.
He said Chinese investors were looking to take over big global hotel management companies after they failed to buy Starwood.
"I think one of the main reasons for the M&A activity is to boost stock prices," Mr Chanin said.
"Apart from business growth, listed companies need to think about creating higher returns for shareholders."
He said the hotel business would be tougher. Higher competition will continue, but tourist behaviour is changing.
The management system after the M&A will be complicated.
Clients may be confused, as brand positioning will overlap.
Youth and new-generation customers aged 20-40 prefer to make reservations online and stay at new hotels that have strong recommendations.
Mr Chanin is confident there is still room to grow for regional and local hotel management companies. Marketing strategies, products and IT systems must be designed to meet target customers.
"I strongly believe in the service and management capability of Thai-owned hotel management chains," he said.
"The merger of giant chains won't significantly affect the competitiveness of Thai players. We can always compete with them."
Dusit targets securing management contracts for 15-20 hotels a year. It now operates 40 hotels worldwide.