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

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Over the next five years, the industry will expand as firms invest in boutique hotels, spa resorts and overseas operations in emerging countries; in particular, the continued growth of specialty hotels and global operations will enable profit growth over the next five years. 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

After a disappointing 2009, when revenue dropped 7.6% due to declines in travel spending, the Hotels and Motels industry began to recover in 2010. Revenue increased each year from 2010 to 2012 as the economy began to improve and travel rates increased. Over the five years to 2013, IBISWorld expects industry revenue to grow at an average annual rate of 0.3% to $137.6 billion, including an expected jump of 2.5% in 2013 alone. “In 2009, the downturn of the US economy and the increase in unemployment forced people to become more selective about how they spent their income,” says IBISWorld industry analyst Andy Brennan. “As a result, they were less likely to spend on nonessential travel.” Leisure and business travel rates plummeted as households and businesses became more frugal. The industry was also negatively affected by a drop in international arrivals into the United States, which decreased 5.2% in 2009.

As the economy improved from 2010 to the present, and 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. From year-end 2009 to 2013, domestic travel is estimated to increase an annualized 1.7%. Meanwhile, international arrivals into the United States are expected to rise an annualized 6.0% from 2009 to 2013. “These trends have boosted demand for the Hotels and Motels industry in the United States, benefiting the industry's performance,” adds Brennan.

This industry has a low level of concentration. Major companies in the hotel sector (including industry major players Hilton Worldwide, Marriott International, InterContinental Hotels Group and Starwood Hotels and Resorts) are also increasingly seeking to operate on globally. Operators with major international hotel companies are expected to continue to merge. Although the biggest players account for an increasing share of the industry, their expansion has been achieved through franchising. The franchise business model of the large hotel groups means they can grow with limited capital outlays and lower risk. The day-to-day running of the hotel is left to the franchisee that pays an annual marketing fee and royalties for access to the hotels brand and marketing support. There are, however, a significant number of larger establishments. Given the diversity of accommodation styles and standards, the industry has a large number of small and midsize operators, but only a small number of larger franchised or managed chain operators.

Over the next five years, IBISWorld forecasts that the industry will begin to expand again, 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. For more information, visit IBISWorld’s Hotels and Motels in the US industry report page.

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IBISWorld industry Report Key Topics

This 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
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