The hotel industry is a global business, and investors from around the world have capital earmarked for investment into international companies or renowned portfolios of hotels.

Within the past decade, Chinese companies were among the biggest players seeking to invest in global hotel brands and real estate in the largest U.S. urban markets. In December 2016, Hotel News Now published an in-depth timeline of Chinese outbound capital in the hotel industry, which appeared to be moving quickly.

But since then, the direction of Chinese capital and hotel ownership has reversed.

Russia's invasion of Ukraine and global geopolitical tensions have only made cross-border investments more uncertain. CNBC reported Friday that Chinese companies could be delisted on U.S. stock exchanges due to lack of financial transparency.

"The U.S. Securities and Exchange Commission recently named five U.S.-listed American depositary receipts of Chinese companies which they said failed to adhere to the Holding Foreign Companies Accountable Act. ADRs represent shares of non-U.S. firms and are traded on U.S. exchanges," according to the CNBC report. "The China ADRs flagged by the SEC are the first to be identified as falling short of HFCAA standards. The act permits the SEC to ban companies from trading and even be delisted from U.S. exchanges if regulators stateside are unable to review company audits for three consecutive years."

In recent years, Chinese companies that were active in acquiring Western hotels have reduced their investments. Some have disappeared or shrunk — most notably insurance firm Anbang Insurance Group and travel operator HNA Group — as the Chinese government railed back on what it saw as excessive spending in non-core markets. Some of the Chinese firms buying these assets and hotel firms have been acquired by other Chinese companies — such as when Jin Jiang International Holdings acquired Radisson Hotels Group from HNA in 2018 — potentially at the insistence of the Chinese government.

That is not to say Chinese capital isn't still present in the West. For example, Jin Jiang owns 13% of France-based Accor, and Huazhu Hotels Group owns Germany-based Deutsche Hospitality.

It is believed that Chinese firms allocate capital in international hotel firms only with the approval of the Chinese state government, and when Chinese officials regard that outflow as outside the “core” strategy of a Chinese company, they can be forced to sell off their investments.

Here is a look at how an ownership sweep across the Western lodgings sector slowed down to a steadier level and how some companies fell out of favor.

It was in 2018 when things turned for Chinese companies in the West. Very quickly, firms that were titans in the West soon became minnows or were even expunged from the industry.

Two of those titans were Anbang Insurance Group and HNA Group, which garnered some of the biggest headlines in the global hotel industry in recent years. Anbang Insurance Group almost bought Starwood Hotels & Resorts Worldwide out from under Marriott International in 2016, a few years after buying the Waldorf Astoria New York for $2 billion.

The first domino to fall was when the Chinese government seized the assets and operations of Anbang Insurance Group in February 2018. In what was termed a “Chinese regulatory crackdown,” the state-controlled China Insurance Regulatory Commission took control of all the group’s assets, including the Waldorf Astoria New York. The Chinese government also planned to prosecute Anbang's chairman Wu Xiaohui, who had been arrested in June 2017.

In September 2021, Goldman Sachs and Bank of America announced they would finance a nine-hotel portfolio of U.S. luxury hotels — a portfolio that used to be part of the real estate investment trust Strategic Hotels & Resorts — that were formerly owned by Anbang, CoStar News' Mark Heschmeyer reported. The Chinese government valued the hotels at $2.82 billion.

Another Chinese investment titan, HNA Group, diversified itself by deploying capital in three hotel companies outside China. HNA acquired Carlson Hotels in 2016, and for a time owned 20% of NH Hotels and 25% of Hilton, respectively. HNA also held, and subsequently divested, 25% stakes in the two companies that spun out of Hilton in that time frame — timeshare company Hilton Grand Vacations and the REIT Park Hotels & Resorts.

In July 2018, HNA’s co-founder and chairman Wang Jian died in Bonnieux, France, falling off a wall that he had climbed on top of for a photo opportunity and hitting rocks below. According to Reuters, French newspapers later dismissed reports that foul play was suspected in the death.

A month later, HNA sold Radisson Holdings to peer Chinese firm Shanghai Jin Jiang International Hotels Group. The Jin Jiang deal was for 100% of Radisson Holdings and 51.5% of the outstanding shares of Radisson Hospitality AB for a total of about 3 billion Swedish crowns ($332 million). The new owners also acquired an 18.5% stake in Radisson Hospitality.

The month before the sale to Jin Jiang, Eric De Neef, Radisson’s executive vice president and group chief commercial officer, said in an interview that Radisson had “the key money for our 2022 plans. We do not necessarily need HNA, but we do need owners. Will HNA stay? This is the question that might be asked in the market.”

HNA owned the European hotel chain for little more than two years.

In February 2020, the government of the Chinese province of Hainan took over control of HNA. Financial website S&P Global said a government working group had done so “to take control of HNA’s board and help the company devise a plan to overcome its liquidity problems."

HNA Group is now majority-owned by Chinese-government entity Hainan Traffic Administration Holding. In January 2021, HNA Group was reported to be in sale mode after some of its creditors filed a court petition requesting the Chinese firm be wound up and reorganized. In April, Financial Worldwide reported HNA was placed into administration in April, stating it had spent approximately $49 billion on assets, many in the travel and tourism sector between 2015 and 2017. HNA's assets included Hainan Airlines, which in the first nine months of 2020 was said to have lost 15.6 billion yuan ($2.43 billion), largely because of the COVID-19 pandemic.

By September 2021, HNA chairman Chen Feng and CEO Tan Xiangdong were“detained for suspected crimes” and “placed under compulsory measures,” nine months after the company was placed into administration. Chinese authorities announced a reorganization plan to split HNA into four new business units and “wipe out the company’s existing shareholders, including the now former management team.”

As far as HNA's future, Hainan Traffic Administration Holding officials said that “should the firm be able to successfully emerge from bankruptcy, it would operate as four independent units focused on aviation, airport operations, finance and commerce.”

Other Chinese companies that invested internationally in hotel companies have faced challenges. In 2018, CoStar News reported on the state of Chinese hospitality investment despite concerns of increased Chinese debt and a lack of transparency and accountability.

The article focused on Fosun, which owned companies such as Thomas Cook, the world’s oldest hotel company. In July 2019, Fosun injected 750 million pounds sterling ($941.3 million) to shore up the package-vacation firm.

Less than three months later, Thomas Cook was no more, declaring bankruptcy and stranding approximately 15,000 holidaymakers, mostly travelers from the United Kingdom. The New York Times reported Thomas Cook had debt of 1.7 billion pounds sterling.

Another Chinese company, Wanda Hotel Development, sold 90% of the 101-story Wanda Vista Tower in Chicago in July 2020, CoStar News reported. The property subsequently changed its name to the St. Regis Chicago in part because owners of residences also in the building feared the Wanda part of the name would dampen resale value.

"Proceeds of the sale will pay off $244.8 million in debt Wanda owes on the project, according to a statement from the company. Wanda had about $2.9 billion in total debt at the end of March,” although not all of that debt was debt in the hotel industry, CoStar News reported.

Some Chinese companies have invested in Western hotel companies and thrived. Among them is Jin Jiang, which owns French hotel company Louvre Hotels Group, acquired Radisson from HNA and owns a stake in Accor.

Jin Jiang's support allowed Louvre to purchase a 74% majority stake of India’s Sarovar Hotels in January 2017 for a reported $50 million. While the majority stake in Sarovar is in Louvre’s name, Louvre has been owned fully by Chinese firm Shanghai Jin Jiang International Hotels Group since late 2014.

In December, Jin Jiang increased its stake in Accor to 13%, making Jin Jiang the French hotel firm’s largest third-party owner. Another Chinese company, Huazhu Hotels Group, currently owns 4.7% of Accor.

Speaking of Huazhu, the company agreed to buy German hotel company Deutsche Hospitality, formerly Steigenberger Hotels & Resorts, for 700 million euros ($764 million) in November 2019. The deal closed in January 2020.

Today, Huazhu owns more than 5,000 hotels in 400 cities.

An area in which the Chinese government has severely cracked down on is China’s gaming segment, which is confined to Macau, the former Portuguese colony.

Gaming is illegal in other portions of China, and the Chinese government has accused several executives from Macau hotel-casino firms of using their businesses to launder money and bankroll high rollers' spending at gaming tables.

Several high-profile arrests have been made.

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