Blake Bein

May 2, 2021
Hotel & Motel Industry
Table of Contents
Page 1
• Cover Letter
Page 2
• Table of Contents
Page 3
• Intro
• Industry Background
o Fig 1
Page 4
• Relevant Trends
o Fig 2
• Start of Competitors

Page 5
• Continuation of Competitors
o Fig3
Page 6
o Fig4
• Target Demographics
o Fig 5
Page 7
• Continued Demographics
o Fig 6
o Fig 7
Page 8
• Citations
Hello,

This is a follow up report requested by Mr. Marco and our Client. This will help educate them
on relevant and credible industry specific information. Being informed on the industry-specific
information will help them make better business decisions. They will read about trends in the
industry and how those correlates to business models.

Industry background

According to IBISWorld, we have seen a great effect on the hotel industry market due to Covid-
19 these past two years. Annual growth had a major negative impact with a -7.5% growth rate
for the years of 2016-2021. Estimates however are show a strong bounce back for 2021-2026
with a growth rate of 11.7%. With a current revenue of one hundred and thirty-three billion
that would mean we have an expected revenue of about fifteen billion coming into the market
within the next few years.

Visual of Annual Growth over time (IBISworld 72111) Fig 1

Covid-19 was also a big contributor to closing small family ran business due to declining profits
and revenue. With that there’s been a big influx to rework these small establishments as
revenues are increasing in the next few years. However major operations in this industry still
took a hit but were able to stay in business with altered operations. As things begin to pick up in
the following years the room rates are expected to become very competitive. Supporting IBIS
worlds claims, BIGale also concludes that the hotel industry is having increased competition
rates from third party trend setters like Airbnb and HomeAway. These kinds of short-term
rentals are affecting the entire industry from high-end hotels to motels. This result ties back
into the previous claim by IBIS world that rates will be getting very competitive.

Relevant trends
According to Mintel Reports, “Travelers are more likely to be staying in upscale hotel tiers in
2019 compared to 2017” (Mike Gallinari, 2019, Travel & Leisure). This theme will only begin to
increase with the worry of needing a sanitized and clean hotel room with the concerns of the
pandemic. Hotels will need to adapt to relevant consumer trends and needs in order to stay
relevant in growing times. Upscale hotels had a 3%-point increase from years 2017 to 2019
while mid-scale hotels lost 2% points. This shows how great the shift from midscale to high end
hotels is playing out. Big hotel companies like Marriot, Hilton, and InterContinental have been
seeing this trend change continue as the pandemic begins to subside.

Visual of % Change per hotel type from 2017-2019(Mintel 961462) Fig 2

Upscale hotels and home rental options are gradually becoming more and more popular this
may see a shift to how consumer demands change the type of hotel. Following previous
statements, we will only see these trends increase as more people begin to use hotels again.

Competitors

Competitors in the hotel and motel market are run by firms, establishments, and small business
mainly. As many can guess establishments are the big players in this space. Many are large
chains that function together to retain consumers within their ecosystem. This negatively
effects many of the other sections to the whole population as can be seen below comparing
establishments to any of the other sections.
Industry population (Bizminer 721110) Fig 3

Looking further at establishments this visual below shows some of the big players in the field.
Many of these are chains that have a multitude of hotels and motels spread across the United
States and international areas. Comparing this chart and the one above it the idea of
establishments diminishes because of the fact that the big players take a small 5% chunk out of
the market leaving the rest for others. Therefore, showing how over populated this space is
already when account for the lower establishments and other categories in the population.
Which leads us back to competitive rates and always being on top of trends and markets.

Operating Revenue

WYNN Resorts, Limited

Intercontinental Hotels Group PLC

Hilton Worldwide Holdings Inc.

MGM Resorts International

$0 $2,000,000 $4,000,000 $6,000,000

Operating revenue by establishment (orbis) Fig 4
Target Demo Graphics

As with demographics there are a multitude of categories like travel type, age, and gender.
These also will tie into what kind of booking options people use to travel. Firstly, looking at the
figure below we can see that a majority of the market is currently dominated by domestic
leisure travelers and following that would be international leisure travelers. Taking account
those two major groups we can tell that vacationing is a important part of many peoples lives.
Thus hotels can attempt to know what services and packages to support.

Visual of target demographics on category (IBIS world 72111) Fig 5

With Mantels data the construction of demographics visual, by gender and age below, shows us
how popular online booking has become for younger induvial. Providing both graphs shows
that there is no major collection between gender but mainly by age when choosing what kind of
booking option, the demographic would use.
 Target Demo Graphics by Gender
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Visual of target demographics by gender (Mintel 919806) Fig 6

Fully interpreting the graph below booking companies can combine their data with hotel
companies to further personalize the experiences and packages that they provide to
consumers. This in turn will allow greater revenue and profits for the foreseeable future
because of the ability to follow demographic trends.

Target Demo Graphics by Age

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Visual of target demographics by age (Mintel 919806) Fig 7

Industry overview, market trends, competitors, and target demographics all have a great effect
on each other and correlate heavily. If you have any questions, please reach out to me or Mr.
Marco. My contact email is Blakebein@email.arizona.edu

Thank you,
Blake Bein

Citations

Jared Ristoff, April 2021, Hotels & Motels in the US, US Industry (NAICS), Retrieved from
IbisWorld

Gale Business Insights: Global Collection. 2019, Hotels (except Casino Hotels) and Motels,
Retrieved from BiGale

Orbis World Database. 2020, Hotels and Motels, Retrieved from Orbis

Mike Gallinari, 2020, Hotels - US - June 2019, Travel & Leisure. Retrieved from Mintel

Hotel Alternatives - US - July 2019, 2019, Travel & Leisure. Retrieved from Mintel

Hotels and Motels, 2019, Mintel Industry Report 919806, Retrieved From Mintel

Hotels (Except Casino Hotels) and Motels ALL US, 2021, Bizminer Industry report 721110,
Retrieved from Bizminer