DESCRIPTION
Hotels Market Global Size:
ELINT Market Research’s latest hotels procurement market research report projects a global market size of $550 billion in 2022 and is anticipated to increase at 18-22% CAGR until 2023.
Market Definition:
The hotel market involves providing temporary accommodation and meal services to consumers and travelers. These hotels can be of different types like 5-star, luxury, resorts, guest houses, etc.; thus, travelers can pick any hotel as per their particular requirements and budget. Further, individuals can either make direct bookings of rooms via call or in-person visit and also use online platforms to reserve rooms.
Major Hotels Market Drivers:
- Expanding Global Travel Agencies –
One of the major growth drivers for the hotel market is increasing tours and travel companies worldwide. These organizations vastly help people, who are seeking proper planning from conveyance to accommodation for their trips.
- Growing Online Hotel Booking Platform –
Currently, making a hotel booking has become a piece of cake for individuals, with the help of multiple online hotel booking platforms. Hence, as these digital solutions are rising, the hotel market is also expanding.
- Emergence of Tourism-Friendly Standards –
Governments are generating new tourism-friendly guidelines to facilitate tourism and consumer experience. Hence, the hotel market is experiencing massive development, and businesses are focusing on adhering to such regulations.
Hotels Market Challenges:
- Impacts Due to Economic and Weather Conditions –
The hotel sector is very vulnerable to being affected by economic, weather, and health crises. Thus, any kind of transition in global geopolitical affairs, uncertainties, natural tragedies, etc., affects the hotel business greatly. An evident example of this factor is the COVID-19 pandemic, which significantly disrupted travel companies’ practices.
- Cybersecurity Hazards –
Technology brought both advancements and challenges for hotel market players, since increasing online hotel booking solutions, which store customers’ sensitive information. Hence, the risk of digital attacks increases.
- High Hotel Prices –
Hotel owners face difficulty sustaining service quality, adhering to safety standards, and meeting guest anticipations. Hence they usually witness themselves in rising their operational expenditures to balance profitability with providing quality services.
Hotels Market Opportunities:
- Increasing International Business Activities –
The hotel market encounters a tremendous opportunity due to increasing business alliances and collaborations on international levels. Therefore, hotel owners need to arrange accommodation facilities for individuals, who are attending corporate events, meetings, conferences, and presentations.
- Emergence of Modern Facilities –
Several hotels are offering technology-driven and customized benefits to consumers like digital check-ins, entry without keys, spa and fitness facilities, and more. Therefore, hotel owners can employ AI and data analytics to fulfill guest preferences.
Hotels Market Segmentation:
- Different Hotel Types –
One of the key segmenting factors for the hotel market is different types of hotels including premium, intermediate, budget or guest houses, and more. Each of these hotels provides amenities as per the different requirements of travelers.
- Distinct Management Structures of Hotels –
Various owners employ diverse management structures for operating their hotels. They can either independently handle or hire third-party management firms to manage their hotels.
Pricing Models in the Hotels Market:
The pricing models help hotel owners decide on costs for their services. The fixed price model helps in developing fixed costs for rooms and meal services. Also, this approach provides expenditure-related transparency and predictability to both hotel lessors and visitors. Further, another cost method is dynamic pricing, which allows adapting expenses depending on diverse aspects like the needs of a client, first-time visits and revisits of clients, and booking practices.
Moreover, the dual pricing method assists in setting different prices for distinct customers. In this context, loyal and repeat customers receive discounted rates compared to regular clients. Additionally, the chain-based pricing model helps hotel owners set standardized expenses for their various hotels; this way they can ensure consistency in rates.
Maturity of Supplier and Buyer Regions in the Hotels Market:
In the global hotel market, some of the major regions include North America, the European Union, and the Asia-Pacific. These nations are leading since they comprise a high level of maturity from both supplier and buyer perspectives. However, Asia-Pacific’s buyer maturity is characterized as medium, due to lack of expertise and efficiency.
Price Analysis in the Hotels Market:
The global hotels market encountered an increase in prices in different regions, in the year 2023 in comparison to the previous year 2022. In this list, the first one is North America, which carried approximately a 10-12% increase in hotel prices. Europe, the Middle East, and African nations experienced 13-15% growth in hotel expenses. Moreover, APAC regions encountered an average 5-7% price expansion.
Sourcing Mix in the Hotels Market:
A sourcing mix implies a mixture of hotel chains and independent hotels, that offers adaptability to hotel owners in catering to different traveler choices and demands. Thus, customers can choose accommodation either from well-established hotel chains or independent hotels depending on their unique requirements.
Booking Channels in the Hotels Market:
When consumers directly reserve rooms via the hotel’s official website, phone, and in-person visits, then it comes under the direct booking channel. Thus, with this approach, hotels can build direct connections with customers without paying and depending on any third-party mediators. Contrarily, when guests reserve rooms using third-party platforms like online sites, agencies, agents, etc., then it comes under indirect booking channels. Hence, in this method, hotels are obliged to pay commission fees to these intermediaries.
Contract Model in the Hotels Market:
Participants operating in the global hotel market can make contracts with various stakeholders like goods and service suppliers, or franchisees. This contract stays for a 2 to 6-year duration; thus, stakeholders get enough time to build trust and foster their relations.
Leading Suppliers in the Hotels Market:
Multiple popular industry players are operating in the vast landscape of the hotel market including The Langham Chicago, The Peninsula Chicago, Four Seasons Hotel
Washington DC, Four Seasons at Ten Trinity Square London, Sofitel London Heathrow, Hotel Pullman Liverpool, The Ritz-Carlton Berlin, InterContinental Berlin, Grand Hyatt Berlin, G6 Hospitality LLC, Four Seasons, Peninsula Hotels, The Langham, Whitbread Group, Jurys Inn, Britannia Hotels, Ramada Plaza Hotel, Royal Century Hotel, Okura Nikko Hotels, Waldorf Astoria, Jumeirah Al Naseem, Radisson Blu, Posadas Group, Gaviota Hotels, Atlantic Hotels.
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