It’s been almost two years since the plans were announced, but Magnuson Hotels (a network of more than 1,000 independent hotels in North America) France’s Louvre Hotels Group (one of Europe’s largest operators) and China’s Jin Jiang Hotels (which owns Louvre) have finalized their partnership agreement for a global distribution platform.
The new alliance will have 8,000 hotels and approximately 800,000 guestrooms available at one website, putting the network just behind Marriott’s 1 million rooms, company CEO Thomas Magnuson said.
“One of the biggest things in the industry is the race to scale,” Magnuson told HOTEL MANAGEMENT. “One of the questions that we seek to answer is how does the independently owned hotel operator fare in that race to scale? How does an independently owned hotel operator fare against 1 million corporate-owned rooms like Marriott [now has]?”
Magnuson (the company) formed this alliance with Louvre to do two things, Magnuson (the CEO) said. “We want to offer travelers more options, and also help participating hotel owners build their own scale.” The alliance, he said, is not unlike an airline code-share partnership. “Together, as partners, we can leverage each other’s brand power, our customer base, technology and other resources to bring more for our respective hotel owners in the scale race, and also to offer more to consumers,” he said, and noted that hotels affiliated with Magnuson and Louvre Hotels will now have access to Jin Jiang Hotels’ 100 million-member-strong rewards club.
A Tech-Focused Alliance
The idea originated when Louvre was acquired by Jin Jiang. “All three parties met, and we all share a common philosophy about respecting and caring for the hotel owners,” Magnuson said. “We all thought it would be good to work on.” Over the last 18 months, the companies have collaborated on a “massive” technology platform that Magnuson described as “deceptively simple,” with many moving parts to make the final result easy for the consumer to use. “The technology platform that we have in place is very strong, very robust and well-equipped to service this level of inventory as well as the number of bookings we anticipate,” he said.
The new site was built from a “mobile-first” strategy, which Magnuson expects will help attract users from China. “In China, everything is mobile-driven,” he said. “Most people don’t own a laptop. They run their world on their mobile devices.”
And with the new site live for a day, Magnuson said that the conversion rate on visits increased 68 percent. “We attribute a lot of that to the strength of the technology platform,” he said. “The early numbers indicate that our strategy to build everything in a mobile-first platform is pointing in the right direction.”
Full Speed Ahead
Looking ahead, Magnuson expects the organizational structure (“This is a form of virtual consolidation—it’s not an equity consolidation,” he said), speed-to-market and expansion can move at a faster pace. The new technology platform that unites the companies will also allow for speedy growth.
“We already know it’s attractive to owners,” he said of the partnership. “We had a lot of growth with Magnuson hotels over the last few years as owners have known that this is part of our plans. Domestically and internationally, it’s a very attractive platform for hotel owners to affiliate with. We definitely see the fact that it opens up access for U.S. hotels to international markets to be a draw and a factor in increasing conversions to the Magnuson platform.”