According to a report by Altus Market Research titled, “Hotel and Other Travel Accommodation Global Market Analysis 2031 by Type(Hotel, Motel; Casino; Bed, Breakfast), Mode(Online & Direct); Application(Leisure; Professional), Price(Economy, Mid-Range; Luxury) Ownership(Chained; Standalone), Property Type”, the global hotel and other travel accommodation market reached a value of nearly $645.44 billion in 2021, decreased at a compound annual growth rate (CAGR) of -6.0% since 2016. The market is expected to grow from $645.44 billion in 2021 to $1,160.79 billion in 2026 at a rate of 12.5%. The market is then expected to grow at a CAGR of 4.6% from 2026 and reach $1,453.44 billion in 2031.
Growth in the historic period resulted from a rise in disposable income, growth in mobile applications for hotel, restaurants and travel, improved earning capacity, emerging markets growth, growth in the travel and tourism industries and rising aging population and early retirement. Factors that negatively affected growth in the historic period were the coronavirus pandemic, talent crunch in emerging Asia, online travel agencies (OTAs) increasing power, low customer retention and availability of alternatives. Going forward, economic growth in developed nations, growing millennial travelers, rising participation in outdoor activities, rising spend on leisure, technological developments and a shift in travel trends will drive market growth. Factors that could hinder the growth of the hotel and other travel accommodation market in the future include security concerns, geo-political tensions and government regulations.
The hotel and other travel accommodation market is segmented by type into hotel and motel, casino hotels, bed and breakfast accommodation and all other traveler accommodation. The hotel and motel market was the largest segment of the hotel and other travel accommodation market by type, accounting for 68.9% of the total market in 2021. The hotel and motel market is expected to be the fastest-growing segment in hotel and other travel accommodation market is segmented by type, going forward at a CAGR of 13.6% during 2021-2026 period.
The hotel and other travel accommodation market is segmented by application into tourist accommodation (leisure) and official business (professional). The official business (professional) market was the largest segment of the hotel and other travel accommodation market by application, accounting for 64.1% of the total market in 2021. The official business (professional) market is expected to be the fastest-growing segment in hotel and other travel accommodation market is segmented by application, going forward at a CAGR of 12.7% during 2021-2026 period.
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The hotel and other travel accommodation market is segmented by ownership into chained and standalone. The standalone market was the largest segment of the hotel and other travel accommodation market by ownership, accounting for 68.4% of the total market in 2021. The chained market is expected to be the fastest-growing segment in hotel and other travel accommodation market is segmented by ownership, going forward at a CAGR of 14.5% during 2021-2026 period.
The hotel and other travel accommodation market is segmented by price point into economy, mid-range and luxury. The mid-range market was the largest segment of the hotel and other travel accommodation market by price point, accounting for 63.5% of the total market in 2021. The luxury hotel market is expected to be the fastest-growing segment in hotel and other travel accommodation market is segmented by price point, going forward at a CAGR of 13.1% during 2021-2026 period.
The hotel and other travel accommodation market is segmented by property type into hotels, serviced residences, apartment hotels, co-living and other property types. The hotels market was the largest segment of the hotel and other travel accommodation market by property type, accounting for 54.2% of the total market in 2021. The hotels market is expected to be the fastest-growing segment in hotel and other travel accommodation market is segmented by property type, going forward at a CAGR of 13.0% during 2021-2026 period.
The hotel and other travel accommodation market is segmented by mode of booking into online bookings, direct bookings and other mode of bookings. The direct bookings market was the largest segment of the hotel and other travel accommodation market by mode of booking, accounting for 49.7% of the total market in 2021. The online bookings segment is expected to be the fastest-growing segment in hotel and other travel accommodation market is segmented by mode of booking, going forward at a CAGR of 18.2% during 2021-2026 period.
Asia Pacific was the largest region in the hotel and other travel accommodation market, accounting for 35.8% of the global market in 2021. It was followed by North America, Western Europe and the other regions. Going forward, the fastest growing regions in the hotel and other travel accommodation market will be Africa and South America, where growth will be at CAGRs of 20.1% and 16.0% respectively from 2021-2026.
Global economic activity is suffering a major setback due to the coronavirus outbreak and the measures being taken to control it. Due to various country-wide lockdowns, this pandemic has had a negative impact on several markets including the hotel and other travel accommodation sectors. Many hotel and other travel accommodation players had to close their business, due to less customers, travel restrictions, and lockdowns, thus negatively affecting the market growth. For instance, in early May 2020, in USA the occupancy was less than 15% for luxury hotels and around 40% for economy. Also, The American Hotel & Lodging Association conducted a survey to understand the financial condition of hotels and staffing levels of more than 1,200 members from November 2020. From this survey it was observed that 71% of hotels won’t make it to another 6 months without further federal assistance due to current and projected travel demand and 77% will be forced to lay off more workers. Also, without further government assistance (i.e. second PPP loan, expansion of Main Street Lending Program), nearly half (47%) of respondents indicated they would be forced to close hotels and more than one-third of hotels will be facing bankruptcy or be forced to sell by the end of 2020 .
The global hotel and other travel accommodation market is highly fragmented, with a large number of players operating in the market. The top ten competitors in the market made up to 6.36% of the total market in 2021. Major players in the market include Marriott International, MGM Resorts International, Ctrip.Com International Ltd, Intercontinental, Downer EDI Limited, Hilton Worldwide Holdings, Accor Hotels, Shanghai Jin Jiang International Hotels (Group) Company Limited, The Ascott Limited, Rewe Group and other players.
The top growth potential in the hotel and other travel accommodation market by type will arise in the hotel and motels market, which will gain $394.8 billion of global annual sales by 2026. The top growth potential in the hotel and other travel accommodation market by mode of booking will arise in online bookings market, which will gain $226.6 billion of global annual sales by 2026. The top growth potential in the hotel and other travel accommodation market by application will arise in official business (professional) market, which will gain $339.3 billion of global annual sales by 2026. The top growth potential in the hotel and other travel accommodation market by price point will arise in economy market, which will gain $107.2 billion of global annual sales by 2026. The top growth potential in the hotel and other travel accommodation market by ownership will arise in standalone market, which will gain $317.5 billion of global annual sales by 2026. The top growth potential in the hotel and other travel accommodation market by property type will arise in hotels market, which will gain $293.7 billion of global annual sales by 2026. The hotel and other travel accommodation market size will gain the most in the USA at $98.5 billion.
Market-trend-based strategies for the hotel and other travel accommodation market include focus on acquiring companies to enhance product offerings and increase revenues, focus on bringing more innovative hotel design, introduce automation in their processes to enhance customer experience and improve efficiency, investing in 3D printing technology for personalized options, and cheaper and more efficient designs, adopt smart room keys to improve customers’ convenience and overall experience, consider adopting the use of artificial intelligence for better analysis and insights to improve customer experiences, focus on offering attractive packages to solo travelers to maximize profits, companies should focus on customer acquisition by launching direct booking platforms, and focus on improving their rank on search engines to attract customers.
Player-adopted strategies in the hotel and other travel accommodation industry include focus on diversifying the company’s brand through strategic agreements, expanding customer base through strategic acquisitions, strengthening business worldwide through strategic alliances, strengthening geographic position through extended strategic partnerships and expanding business through strategic investments.
To take advantage of the opportunities, Altus Market Research recommends the hotel and other travel accommodation companies to focus on innovative hotel designs, increase automation in hotels, use 3D printing, adopt smart room keys, use artificial intelligence, expand in emerging markets, continue to focus on most popular tourist destinations, offer competitive pricing, focus more on direct-to-consumer (DTC) advertising, increase focus on social media marketing and increase focus on solo travelers.