The global hotels market size was valued at USD 192.50 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 16.7% from 2021 to 2028. This can be attributed to the developments in the tourism sector across the world. Various government initiatives to boost the economy and enhance the tourism sector are anticipated to drive market growth. For instance, the government of India introduced a scheme to boost tourism by providing one hundred thousand free visas until March 31st, 2022. The Japanese government is actively focusing on incorporating digital transformation into its tourism sector using innovative products, services, and business models.
The market is also expected to be driven by the increasing GDP, rising consumer spending on travel, affordable air tickets, and the growing number of business travelers across the world. On the other hand, the industry is restrained by the competition from other categories, such as vacation rentals, which include Airbnb and Vrbo. As Gen Z consumers are getting older and entering the working-age group, they are likely to influence the travel trends. Like millennials, Gen Z consumers want to experience uniqueness during vacations and so enthusiastically prefer to stay at short-term vacation rentals.
According to the United Nation’s World Tourism Organization, as a result of the COVID-19 pandemic, international tourist arrivals fell by 60% to 80% from 2019 to 2020, negatively impacting the hotel industry. The global pandemic led to a halt in the aviation industry, which led to the massive cancellation of hotel bookings across the world, particularly in the Asia Pacific region. However, as the spread of the infection is coming under control with daily infection rates declining, the tourism and aviation industries are coming back to operation with proper precautions, which will drive the overall market. The global market is likely to recover and witness strong growth over the next few years.
On the basis of type, the global market was dominated by the upscale segment, which accounted for a revenue share of more than 38.5% in 2020. The upscale type segment offers fine services and amenities for customers. Over the past few years, millennials have been shifting and influencing the demand in the global industry, who prefer the top-notch services, ambiance, and stay experience, thus driving the industry growth. The midscale type segment is expected to witness the fastest growth rateof more than 17% over the forecast period.
As globalization and digitalization continue, consumers from the middle class are becoming more techno-savvy and interested in traveling, which is boosting the demand for midscale rooms. Midscale rooms offer limited amenities while being economical compared to upscale rooms. Players in the global market are strengthening their midscale portfolio to increase their revenue per available room by attracting target customers. For instance, Choice Hotels International, Inc. is focused on expanding its midscale segment in 2020 and also in the future.
The Central Reservation System (CRS)/voice distribution channel segment dominated the market in 2020 and accounted for the maximum revenue share of more than 37%. The central reservation system is mainly used by the chain hotels to enable high levels of booking and reservation efficiency, thus, acting as a global distribution center. The advantages of opting for CRS include, enhanced flexibility & efficiency, better customer relationship, elimination of the chances of double booking, secure & safer payments, etc. The increasing use of online channels is, however, affecting the growth of the CRS/voice segment.
The Online Travel Agency (OTA) segment of the distribution channel is estimated to register the fastest growth rate during the forecast period. Online travel agency includes web-based marketplaces, such as MakeMyTrip.com, Booking.com, Expedia.com, which are used by consumers to book hotel rooms. The increased use of smartphones and penetration of the internet is shifting the trend in the industry, leading to the evolution of OTA in the hotel industry. Moreover, benefits, such as convenience, bookings at discounted prices, and easy accessibility, are projected to influence consumers in using OTA more frequently.
North America dominated the market in 2020 accounting for a share of more than 35.5% of the global revenue. The high share of the North America market is mainly attributed to the presence of the maximum number of hotels in the U.S. At a global level, the U.S. has the most developed hotel & hospitality industry. A number of key players have an extensive network across different states in the U.S., which results in higher revenue share occupancy in the global hotels market. In addition, higher consumer spending on travel and leisure in the North America region will further support the market growth.
On the other hand, Asia Pacific is anticipated to witness the fastest growth rate during the forecast period. Over the last few years, the hotel industry is making a shift from North America and Europe towards Asia Pacific, as a result of increased investments in the tourism sector by the governments of countries in the region. Various initiatives from the local governments have led to rapid developments in the tourism sector attracting more tourists from across the globe to South Asian and East Asian countries. This is likely to drive the market growth in the Asia Pacific region over the forecast years.
The market is characterized by the presence of global players and several small-scale local players. The top players are focusing on expanding to the new regions to maintain their market share and increase business in the domain. Companies are also keen on merger and acquisition activities that help them expand their businesses. For instance, on January 18th, 2018, Wyndham Hotels & Resorts, Inc. acquired La Quinta’s hotel franchise and management businesses. InterContinental Hotels Group plc. expanded into the luxury hotel segment by acquiring Six Senses Hotels Resorts Spas, as announced on February 13th, 2019. Some prominent players in the global hotels market are:
Report Attribute |
Details |
Market size value in 2021 |
USD 201.16 billion |
Revenue forecast in 2028 |
USD 591.39 billion |
Growth rate |
CAGR of 16.7% from 2021 to 2028 |
Base year for estimation |
2020 |
Historical data |
2017 - 2019 |
Forecast period |
2021 - 2028 |
Quantitative units |
Revenue in USD million/billion and CAGR from 2021 to 2028 |
Report coverage |
Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
Segments covered |
Type, distribution channel, and region |
Regional scope |
North America; Europe; Asia Pacific; Central & South America; Middle East & Africa |
Country scope |
U.S.; Canada; U.K.; Germany; France; China; India; Japan; Brazil; Argentina; Saudi Arabia; South Africa |
Key companies profiled |
Marriot International Inc.; Accor S.A.; InterContinental Hotels Group plc.; Hilton Worldwide Holdings Inc.; Wyndham Hotels & Resorts, Inc.’ Park Hotels & Resorts Inc.; Choice Hotels International, Inc.; Shanghai Jin Jiang Capital Co. Ltd.; NH Hotel Group S.A. |
Customization scope |
Free report customization (equivalent up to 8 analysts’ working days) with purchase. Addition or alteration to country, regional & segment scope. |
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For the purpose of this study, Million Insights has segmented the global hotels market report on the basis of type, distribution channel, and region:
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