Marriott’s Select Service Partner Pursued Other Deals After Signing Fairfield Agreement (Select Service Growth in China, Part 2)

(Signing ceremony from Marriott press release, 9/13/16)

In a previous post, we discussed how Marriott made a deal with Chinese hotel company Dossen to expand the select service Fairfield brand in China. We explained that Marriott’s deal came nearly two years after a similar deal made by Hilton with Plateno Hotels to grow the Hampton brand, and that the Marriott deal proposed far fewer hotels than the Hilton deal.

Two other concerning features about Dossen stand out. Although it has grown in the past few years, Dossen is several times smaller than Plateno and its parent. In addition, since signing the Fairfield agreement with Marriott, Dossen has pursued other development deals in China and announced its intention to expand to Europe.

What capacity does Dossen have to simultaneously expand the Fairfield brand in China and pursue other development deals?

Dossen outstripped by Hilton’s partner Plateno

Hilton’s partner in its Hampton development plan, Plateno, far outstripped Marriott’s partner, Dossen, in terms of hotel rooms.

In 2014, the year that Hilton and Plateno signed their Hampton development deal, Hotels Mag ranked Plateno as the world’s 7th largest hotel chain, with 442,490 rooms. Dossen (then known as Eastern Crown) was ranked at 38, with 33,863 rooms.[1]

In 2015, Plateno merged into Jin Jiang International, forming China’s largest hotel company. Under the merger agreement, Plateno would continue to operate its brands independently.[2] By 2016, Jin Jiang had become the 5th largest global hotel company at 602,350 rooms.[3] That year, Eastern Crown renamed itself Dossen[4] and had moved up to 23 on the global hotel rankings list with 70,865 rooms. [5]

Dossen’s Other Development Plans: New Properties in China, and Expansion to Europe

After signing the Fairfield development deal with Marriott in February 2016, Dossen has announced other development plans.

In May 2017, Dossen signed a deal with Dusit International, a Thai hotelier, to operate 40 branded resorts and residences under the Dusit Princess label across China. Dossen aimed to sign at least 40 DusitPrincess properties throughout China within the next five years, with 27 properties expected to open before 2022.[6] On its website, Dusit listed 5 open properties in China, and another 5 under development.[7]

Dossen has also announced plans for a major expansion into Europe. CEO Hansen Zhao stated that the European expansion would be at the center of a push to make Dossen China’s fifth-largest hotel company.[8]

How will Dossen simultaneously expand the Fairfield brand in China and pursue other development deals?

 

[1] “Hotels 325,” Hotels Mag, July/August 2015.

[2] “Jin Jiang completes merger with Plateno,” Hotel News Now, 10/2/15. http://hotelnewsnow.com/articles/27985/Jin-Jiang-completes-merger-with-Plateno.

[3] “Hotels 325,” Hotels Mag, July/August 2017.

[4] Jeremy Tredinnick, “Dossen Hotel Group plans global expansion,” Business Traveler, 11/8/16. https://www.businesstraveller.com/accommodation/2016/11/08/dossen-hotel-group-plans-global-expansion/.

[5] “Hotels 325,” Hotels Mag, July/August 2017.

[6] “Dusit International forms strategic partnership with Dossen International Group in China,” Dusit International (press release), 5/23/17. http://dtc.listedcompany.com/newsroom/20170523-dtc-news1-en.pdf.

[7] See Opened hotels, Dusit International, retrieved 3/26/18. https://www.dusit.com/findahotel?status=opened; and Development hotels, Dusit Internaitonal, retrieved 3/26/18. https://www.dusit.com/findahotel?status=coming-soon.

[8] Terence Baker, “China’s Dossen embarks on midscale, European push,” Hotel News Now, 3/21/17. http://hotelnewsnow.com/Articles/126606/Chinas-Dossen-embarks-on-midscale-European-push.