Hotels Market Intelligence

Are you looking for answers on Hotels category?

Are you looking for answers on Hotels category?

  • What are the key trends in Hotels category?
  • Am I paying the right price?
  • Am I working with the right supplier?
  • What are the major challenges and risks in Hotels industry?
  • How is Hotels industry performing?

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Report Coverage

  • Preferred Sourcing Model: Hotels
  • Hotel Programs of Large Global Companies
  • Preferred Pricing Model: Hotels
  • Cost-saving Opportunities: Hotels
  • KPIs: Hotels

Market Size

Global Market Size

$550 Bn

CAGR

4.6 Percent

Table of contents

  1. Hotels Executive Summary
  2. Executive Summary
  1. Hotels Market Overview
  2. Market Size, Growth and Outlook
  3. Key Trends in the Global Hotel Industry
  4. Price Forecast - Hotels
  1. Hotels Best Practices
  2. Preferred Sourcing and Engagement Model
  3. Preferred Pricing Model
  4. Negotiation Strategies/Cost-saving Opportunities
  5. Cost-saving Methodology
  6. Contracting Elements and KPIs/SLAs
  1. Hotels Supplier Market Analysis
  2. List of Top Global Hotels

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Global Market Outlook on Hotels

The global hotel industry is witnessing a lot of mergers and acquisitions. Sharing economy properties are also competing against many hotel properties across the world.

The global hotel industry is growing at a CAGR of 4.6 percent, and the 2016 revenue was estimated to be $550 billion.

Growth Rates

  • 2010–2011 witnessed the highest growth (9.1 percent) between 2010 and 2015, driven by a 7.4 percent growth in the average daily rates
  • 2012–2013 registered the lowest growth rate (2.1 percent), mainly due to low volume (ADR remained flat Y-o-Y)

Growth Drivers 

  • The business travel segment is growing; increased role of internet and technology in making hotel bookings easier (e.g., mobile check-in/check-out)
  • Expanding business in emerging market leads to increased growth in business travel and demand for hotels

 Constraints

  • Supply shortage in emerging markets, alternatives to travel, like virtual meetings, are reducing travel and hence, the need for hotel bookings

Price Forecast: Hotels (2018)

Globally, a 3.7 percent average increase in hotel prices is expected in 2018 compared to 2.5 percent in 2017. Europe is expected to record a strong increase, while other regions are coping up with inflation. The impact of the 2017 mergers is expected to be felt during the 2018 RFP season.

Pricing Trends

North America

  • As demand has levelled off since 2016, North American hoteliers may be banking on economic growth, but supply is expected to continue growing steadily through 2018

LATAM 

  • Capacity is being added throughout the region between 2016 and 2025, which projects a 57 increase increase in supply
  • Spend reduction is also a priority

Europe

  • Hoteliers in Eastern Europe are optimistic, as 2017 statistics reflects occupancy picking up
  • No measurable impact is expected from Brexit until 2019 in the UK
  • RevPAR growth is expected for major cities in Europe

MEA

  • In the MEA, Saudi Arabia is leading in construction of rooms, followed by Saudi Arabia, Qatar and Egypt

APAC

  • Hotel prices are expected to rise with huge discrepancies
  • Strong economies are driving the demand
  • Buyers should be equipped to manage challenging negotiations with newly merged hotel groups

Regional Trends: Hotels

Suppliers are progressively moving corporate buyers away from fixed, negotiated hotel rates and toward dynamic rate pricing. There is also a global trend toward “smarter” hotels with advanced technologies.

North America

  • Market: It is a seller's market for North American hotels, with rates up around 5–6 percent in 2016
  • Growth: Demand is steady, but there is little new supply, outside mid-scale brands, like Hampton Inn and Courtyard
  • Opportunity: There is a scope for more consolidation in the industry
  • Alternatives: Serviced apartments and extended-stay properties, both of which include kitchen facilities, are gaining renewed interest as a compromise between hotels and Airbnb-style private accommodation offerings

LATAM

  • Need for developed infrastructure: In spite of current challenges, LATAM still needs more high-end properties to meet the region's underlying demand. Local chains still provide most of the supply
  • New openings: Recent new openings in countries, like Peru, Chile, Mexico and Panama, have been confined largely to mid-scale properties
  • Upgradation: Existing hotels are upgrading their facilities, offering improved business centres and Wi-Fi
  • Influx of new hotels: Major cities have experienced supply of new hotels, but due to economic uncertainties, the hotel market remains undersupplied in most cases

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