Hotel Construction in the US Industry Market Research Report from IBISWorld Has Been Updated

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Rising disposable income as the economy continues to recover will underpin greater demand for accommodation services, resulting in increased expansion efforts for hotel and motel construction. For these reasons, industry research firm IBISWorld has updated a report on the Hotel Construction industry in its growing industry report collection.

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Rising travel rates and consumer spending will encourage increased hotel construction.

The Hotel Construction industry has faced challenging, but ultimately alleviative conditions over the past five years. From 2010 to 2015, industry revenue is expected to grow at an annualized rate of 9.6% to $19.6 billion. “During the early parts of economic recovery, pressured disposable income limited domestic tourism levels, resulting in lower demand for accommodation services,” according to IBISWorld Industry Analyst Edward Rivera. Further, reduced business travel also decreased demand from business clients. Consequently, occupancy rates fell, and hotels and motels shelved expansion plans and delayed openings, resulting in lower underlying demand for contractors specializing in hotel and motel construction.

In early 2012, however, the Hotel Construction industry began its recovery, led by building booms in New York and rising occupancy rates at hotels across the nation. “These booms were supported by positively reinforced sentiments regarding the country's economy and its outlook,” says Rivera. Additionally, occupancy and room rates have steadily improved, helping drive demand for new construction projects. The going price of rooms almost always signals improving demand from hotel managers' perspectives. With higher demand for their services, hotels no longer have to engage in price wars, allowing them to expand their rates and grow their profit margins. With higher profit, these companies are much more likely to expand, increasing demand for industry services. In 2015, the industry is set to post double-digit growth of 12.3%, reaching an estimated $19.6 billion.

The Hotel Construction industry is poised to finish a strong recovery. Over the five years to 2020, industry revenue is forecast to rise. Rising disposable income as the economy continues to recover will underpin greater demand for accommodation services, resulting in increased expansion efforts for hotel and motel construction. Moreover, domestic travel within the United States is expected to accelerate, resulting in increased demand for hotels and motels. These underlying factors will support greater remodeling spending and renewed construction activity for new hotels and motels, benefiting industry operators. In 2016, IBISWorld forecasts that industry revenue will continue growing at a double-digit rate as the economy continues its recovery from the worst downturn since the Great Depression.

For more information, visit IBISWorld’s Hotel Construction in the US industry report page.

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IBISWorld industry Report Key Topics

Operators and contractors in the Hotel Construction industry engage in new construction, addition, reconstruction and maintenance projects for accommodation establishments. These establishments range in size, but largely comprise hotels, motels, resorts and related structures.

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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