What Are the Consequences of Hotels and DMC Consolidation?

By Cindy Lo, DMCP, October 19, 2018

Consolidation is a reality in all realms of business. It happens in the hotel industry, advertising agencies and event companies. No one industry avoids consolidation, but that does not mean it is a bad thing. Consolidation can be positive for a company. It can win bigger business or bring in more revenue. Maintaining a boutique business is not a bad thing, either. It can allow for more internal decision-making, or consistency across departments.

With these positives and negatives in mind, there is no necessary right or wrong side. Consolidation increases both revenue and opportunity. But if the big companies lose their starry-eyed newness—the culture boutique companies usually carry—are they better off?

Take for example PRA, which acquired Briggs, a DMC leader in New York City, in 2017 and Destination Nashville in February. PRA CEO Tony Lorenz chose a proactive approach over organic growth. While the firm has been a destination management company since 1981 and services more than 100 destinations, acquiring Destination Nashville served as an important component to PRA’s expansion strategy. “Acquisitions aren’t necessarily a better avenue than organic growth, but they can make sense in highly fragmented markets,” says Lorenz. “These acquisitions are also more time-efficient, which can, and should, lead to a better outcome for all parties.”

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