Hotels and Motels in the US Industry Market Research Report from IBISWorld Has Been Updated

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The Hotels and Motels industry is undergoing a sustained recovery following a heavy decline during the recession; however, in the next five years the industry will perform more strongly due to greater economic conditions. For these reasons, industry research firm IBISWorld has updated a report on the Hotels and Motels industry in its growing industry report collection.

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As travel rates revive, firms will expand into niche segments and overseas markets.

The Hotels and Motels industry is undergoing a sustained recovery following a heavy decline during the recession. The industry is highly susceptible to the global economic environment, as proved by a 7.6% drop in revenue in 2009 due to declines in travel spending, reduced corporate profit and subdued consumer spending. The industry began to recover in 2010 as the economy improved and domestic and international travel rates increased. According to IBISWorld Industry Analyst Andy Brennan, “The industry has outperformed the broader economy over the past four years, largely driven by international tourists.” Over the five years to 2013, IBISWorld expects industry revenue to grow at an average annual rate of 0.3%. In 2013, industry revenue is expected to jump 2.5%, making the industry worth $137.6 billion.

Many operators responded to reduced demand during the recession by engaging in price wars by slashing room rates and offering additional perks and services as part of packaged deals. Tourists were less likely to spend on nonessential travel items and hunted for bargains. To protect profit margins, operators were forced to cut costs, such as wages, meaning industry employment fell. However, as the economy improved from 2010 onward, some of the fears concerning the economy subsided. A larger number of consumers and business customers opted to take trips and stay in hotels and motels. Profit margins have improved since the recession but still remain low by historical standards.

Over the next five years, IBISWorld forecasts that the industry will continue to expand, with particularly strong growth in the segments of extended-stay hotels, boutique hotels, spa and health retreats and resorts. “Industry players are also expected to make inroads into emerging regions abroad, such as China, India, Eastern Europe and South America,” says Brennan. Over the five years to 2018, revenue is projected to increase. As demand continues to pick up, industry employment is anticipated to grow. The number of industry employees is projected to rise over this period as well.

The level of concentration in this industry is medium. The major players include Hilton Worldwide, Marriott International, InterContinental Hotels Group and Starwood Hotels and Resorts. Although industry concentration is relatively low, it is increasing as hotel buyouts and mergers become more frequent and operators join franchise and chain operators. The market share of the top four players has increased over the five years since 2008. Major companies in the hotel sector are also increasingly seeking to operate globally. Operators with major international hotel companies are expected to continue to merge.

For more information, visit IBISWorld’s Hotels and Motels in the US industry report page.

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IBISWorld industry Report Key Topics

The Hotels and Motels industry provides short-term lodging in hotels, motor hotels, resort hotels and motels. Establishments in this industry may also offer food and beverage services, recreational services, conference room and convention services, laundry services, parking and other services. This industry only comprises hotels that do not have casino facilities attached.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
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 or call 1-800-330-3772.

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Gavin Smith
IBISWorld Inc.
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