Articles

We hope you find something of interest

Room for Rent: A Review of Global Hotel Industry Drivers & Trends

As the middle class grows in emerging markets, with greater disposable income, travelling for leisure is becoming a natural aspiration for many. To meet this demand, expanding hotel chains in emerging markets are not only targeting western clients, but also aiming at enhanced brand awareness and loyalty among the local population who are expected to drive future growth.

At same time, Boomers and Millennials have become key segments for the hotel industry in the 21st Century. As a result, hoteliers have started offering customized experiences to their guests based on those guest's demographics. 

Another frontier in the hotel industry is technology. Rapid innovation in the technology sector is already influencing the hotel industry in a big way. The consolidation of online travel agencies (OTA), and massive growth in mobile usage, are driving hoteliers to formulate new strategies for distribution and inventory management. 

Branding and segmentation are not new factors, however, the hotel industry outside of the US market remains fragmented and often lacks effective branding. This points to consolidation opportunities in this industry. One of the new trends is the emergence of multi branded hotels which increases operating efficiencies through sharing of personnel and overhead costs. Moreover, hotel groups are moving from an ownership model to an asset-light model and growing rapidly. Consequently, room supply of each of the top three hotel groups in the world (IHG, Hilton and Marriott) has reached to more than 700,000 rooms.

Source: MKG Group

At the same time a number of factors have made the development of hotels more complex and challenging. These factors include: high employee turnover rates, political environment, natural disasters, and the emergence of online vacation rental platforms (OVRP). 


For a more detailed analysis of the hotel sector, please see our related research report here

Reference: 

MKG Group. (2015, March 26). Global Hotel Ranking 2015: A Second Chinese Operator Climbs Into the Top 10. Retrieved from Hotel Online: https://www.hotel-online.com/press_releases/release/global-hotel-ranking-2015-a-second-chineseoperator-climbs-into-the-top-10