Improved consumer confidence and spending will lead to industry growth
New York, NY (PRWEB) November 21, 2014
The Hotels and Motels industry has grown slowly over the past five years as it has continued to struggle with the aftermath of the global recession, which severely shocked the industry. Relatively slow economic growth over the past five years and shaky consumer confidence has restricted the ability of Canadians to take overnight domestic trips. Furthermore, hotels and motels, which rely on international travellers, have continued to battle declining inbound international visitor numbers to Canada. There are a number of bright spots within the industry, especially within the luxury and upscale segments where operators are still attracting healthy spending from affluent travellers. Over the five years to 2014, industry revenue is expected to grow at a tepid annualized rate.
Despite the prominence of large, well-known hotel chains, the industry has a medium level of concentration and still has a large number of small-to-medium sized independent operators. This has kept the industry highly competitive over the past five years. According to IBISWorld Industry Analyst Andy Brennan, “Price competition has eased since the recession, leading to higher revenue per available room (RevPAR) and occupancy rates.” However, a steady increase in the supply of new hotel rooms has limited the ability of operators to bid up room prices. Still, the global hotels and motels landscape is changing and becoming more consolidated, giving larger players the ability to control parts of the industry through loyalty programs and attractive pricing structures.
The industry is expected to perform markedly better over the next five years as consumer spending and confidence improves, corporate profit surges and the decline in inbound international travel is stemmed to some degree. “However, growth will be restricted by the high Canadian dollar, making it more worthwhile for Canadians to travel abroad for their vacation and making the destination less appealing for international tourists,” says Brennan. A projected decline in the number of foreigners visiting Canada will also hurt the bottom lines of hotel and motel operators. Overall, industry revenue is projected to increase per year on average over the five years to 2019.
For more information, visit IBISWorld’s Hotels & Motels in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry provides short-term lodging in facilities known as hotels, motels, motor hotels and resort hotels. These establishments may offer food and beverage services, recreational services, conference rooms and convention services, laundry services, parking and other services.
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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