Decreased revenue brought on by the recession has reversed thanks to an economic rebound
Los Angeles, CA (PRWEB) March 22, 2012
The Boutique Hotels industry began its recovery in 2010, following a disappointing 2009 when revenue fell 12.8%, due to declines in travel spending. Over the five years to 2012, IBISWorld expects revenue to marginally decline at an average annual rate of 0.6% to $5.0 billion. In 2010 and 2011, revenue grew 7.3% and 4.9%, respectively, as the economy began to improve and travel rates increased. Industry revenue growth is expected to continue in 2012, with an estimated jump of 5.9%. In 2009, the decline of the US economy and the increase in unemployment forced people to become more selective in spending income. As a result, they were less likely to spend money on nonessential travel. According to IBISWorld industry analyst Nima Samadi, leisure and business travel rates plummeted, as households and businesses became more concerned about finances. The industry was also affected by a drop in international arrivals into the United States, which decreased 5.2% in 2009. As the economy improved over the course of 2010 and 2011, and some of the fears surrounding the economy subsided, a larger number of consumers and business customers opted to take trips and stay in boutique hotels.
Over the last couple decades, a rising number of travelers have grown tired of staying in large, cookie-cutter hotels geared toward a mass audience. They have begun migrating toward new and more intimate types of hotels, including boutique hotels. These hotels often offer unique design themes and architecture, and are geared toward a target market of well-to-do 20-55 year olds. Boutiques also often center the hotel around a brand-name chef's restaurant, as well as a trendy bar or lounge, which provides boutique hotels with sizeable revenue stream and gives them with instant brand recognition and cache.
Over the next five years, IBISWorld forecasts the Boutique Hotels industry will expand rapidly as demand for the boutique concept reaches a fever pitch. Industry employment is anticipated to grow at an average annual rate of 6.5% over the same period to 78,290 workers, and the number of establishments will increase at an average of 6.3% per year to 2,645. The industry is fragmented and has a low level of concentration, but it is increasing, with large chain hotels like Marriott International merging with independent boutique hotel operators. “Major companies in the hotel sector are also increasingly seeking to operate on a global basis and have a presence in major countries outside the United States,” said Samadi. For example, major player Starwood Hotels and Resorts Worldwide has W Hotels in Puerto Rico and Mexico, with establishments planned to open in China and Egypt over the next five years. Concentration is continuing to increase among the major global operators, although this is more on a managed property basis. For more information, visit IBISWorld’s Boutique Hotels in the US report in the US industry page.
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IBISWorld industry Report Key Topics
This industry includes intimate, luxurious, quirky and upscale hotel environments that feature unique architecture and design. They are also known as lifestyle hotels, villas and wellness hotels. The establishments in this industry may offer food and beverage services as well as having restaurants and spas and salons on premises. This industry does not include chain hotels, though it does include boutique brands owned by larger hotel groups.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.