Melbourne, Australia (PRWEB) September 21, 2012
Motels operate in a very competitive tourist accommodation market, with a variety of accommodation styles and qualities available at a range of price points to suit particular needs. When economic conditions are weak, price-based competition tends to accelerate, usually as a response to tourists seeking greater value. Over the past decade, competition has risen both within the Motels industry and from competing accommodation industries such as hotels, serviced apartments and quality cabins in caravan and holiday parks. According to IBISWorld industry analyst, Andy Brennan, “the Motels industry's revenue is expected to have declined by 1.3% per year over the past five years”. IBISWorld estimates that revenue will continue to fall in 2012-13, by 1.8% to $2.78 billion. The decline will mainly be due to low consumer confidence and the continued preference of Australians to travel overseas for holidays. A small revival in both domestic and international business travel is expected to stem the tide somewhat; however, corporate travel accounts for only 26.8% of the motel market.
A downward trend in motel establishments is due to motel closures, industry consolidation and some motels being converted into hotels. The Motels industry is estimated to employ 26,900 people, down substantially over the past five years. “The fall in employment numbers has been most dramatic since the global financial crisis as many motels have shut and domestic tourism has crashed”, adds Brennan. Industry performance is also linked to international visitor arrivals, which have been stagnant over the past five years as the Australian dollar has remained high. Market share concentration in the Motels industry is low. Although motels are often associated with member groups such as Best Western or Golden Chain Motels, the majority of operators are small, single-establishment operators and often family-run businesses. This low industry concentration level reflects the large number of small business operators and, therefore, the highly fragmented nature of the industry.
One of the biggest challenges for the Motels industry over the next five years will be how to position themselves within the broader accommodation sector and differentiate from other providers. Motels face competition from both above (from hotels and serviced apartments) and below (from backpacker hostels and caravan park cabins) and are increasingly competing on price alone. The Motels industry's revenue is forecast decline over the next five years.
For more information, visit IBISWorld’s Motels report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry is made up of motels, private hotels and guest house businesses with 15 or more rooms. These establishments provide accommodation on a room or suite basis, and some may operate a restaurant and bar on the property. Most motels have direct access to an open parking area and are located adjacent to a major road. Most guest rooms have bath and/or shower facilities, and may or may not have full cooking facilities, such as hot plates, ovens and microwaves.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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