Hospitality Market Overview

The Hospitality Market size was valued at USD 4.7 Billion in 2023 and is projected to reach USD 8.79 Billion by 2032, registering a CAGR of 7.2% from 2023 to 2032

The hospitality market consists of sales of accommodation and food services and related goods by entities (organizations, sole traders or partnerships) that provide customers with lodging and/or prepare meals, snacks, and beverages for immediate consumption. The market covers both accommodation and food services because the two activities are often combined at the same establishment. The hospitality market is segmented into non-residential accommodation services and food and beverage services. Only goods and services traded between entities are included. The revenues for a specified geography are consumption values – that is, they are revenues generated by organizations in the specified geography within the specified market, irrespective of where they are produced.

Market Dynamics And Growth Factors For Hospitality Market

Drivers:

Ease of International Travel

The rapid growth in the international business and leisure travel boosted the demand for food and beverages, and non-residential accommodations during the historic period. The availability of affordable air travel, agencies to organize trips, government-recognized hotels and resorts and policies such as visa-on-arrival for tourists encouraged international travel, driving growth in the hotel and other travel accommodation industry. This rise in tourism raised the demand for food and beverages, accommodation facilities, thereby driving the market during this period.

Restraint:

Security Concerns

Terrorism has affected tourists’ perceptions with regard to travel and the risks associated with it, so negatively affecting the hospitality industry. In recent years, terrorist acts have targeted tourist sites and places of public interest. For example, Sri Lanka's $4.4 billion tourism industry which accounts for around 5% of the country's GDP was severely affected due to terrorist bombings in April 2019. Terrorism also has indirect effects as all tourists have to pay more to acquire visas and often have to undergo intrusive body scans and lengthy procedures.

Opportunity:

Rapid Technological Development

Advances in technology are changing consumer expectations as well as the way in which the hospitality market conducts its business. Some technologies such as Wi-Fi, digital conference facilities, mobile communication and automation are now seen as basic. For example, near field study (NFC) technology is the next-generation short-range high frequency wireless communication technology that gives users the ability to exchange data between devices. This is ideal for self-check-ins by guests at hotels and also smart room keys. Technology development automates processes and reduces operational costs of hotels and allows them to offer a wider range of services, thus driving the hospitality market.

Segmentation Analysis of Hospitality Market

By Type, Non-Residential Accommodation Services segment consists of sales of non-residential accommodation services and related goods by entities that provide lodging or short-term accommodation for travellers, vacationers, and others. There is a wide range of services provided in this market. Non-residential accommodation services market is further classified into hotel and other travel accommodation, camping and caravanning and students and workers non-residential accommodation. The food and beverage services consists of sales of food and beverage services by entities that provide meals, snacks, and beverages to customer order for immediate on-premises and off-premises consumption. Food and beverage services market is further classified into restaurants and mobile food services, bars and cafes and catering services and food contractors.

By Ownership, the global market is divided into stand-alone and chained. The global market generated the highest revenues for the chain segment, which deals with multiple units, franchises or businesses of the same brand. For example, all of McDonald’s restaurants, a fast-food chain operating in nearly every region of the world, are examples of chain units that own a single brand name.

Regional Analysis of Hospitality Market

The hospitality market in Asia Pacific was the largest in 2020. North America was the second largest region in the hospitality market. The regions covered in the hospitality market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. Europe is projected to generate the highest revenues in the global hospitality market, with the travel and tourism industry driving regional revenues. European countries travel more frequently than others. These tour trips are a combination of business and personal travel. North America's market capitalization is expected to be driven by the United States due to the growing number of international students and career professionals migrating to cities in the country.

COVID-19 Impact Analysis For Hospitality Market

The outbreak of Coronavirus disease (COVID-19) has acted as a massive restraint on the hospitality market in 2020 as governments globally imposed restrictions on domestic and international travel limiting the need for services offered by these establishments. The virus was first identified in 2019 in Wuhan, Hubei province of the People’s Republic of China and spread globally including Western Europe, North America and Asia. Steps by national governments to contain the transmission have resulted in a decline in economic activity with countries entering a state of 'lock down' and the outbreak is expected to continue to have a negative impact on businesses throughout 2020 and into 2021. However, the hospitality market is recovering from the shock as it is a 'black swan' event and not related to ongoing or fundamental weaknesses in the market or the global economy.

Top Key Players Covered In Hospitality Market

• Compass group plc
• Starbucks
• Sodexo
• Marriott International
• Aramark corporation
• McDonald's
• Darden Restaurants
• Yum China Holdings Inc.
• Chipotle and Berkshire Hathaway Inc.
• Other Major Players

Recent Industry Developments In Hospitality Market

In March 2024, Reliance Hospitality announced strategic partnership with Hotels & Preference and Tempting Places, bolstering its expertise in hospitality management solutions. As part of this collaboration, Reliance Hospitality will assume the role of exclusive partner for the lucrative markets of Mexico, Canada, and the United States. This alliance unites Reliance Hospitality’s proven expertise in hotel management with the global reach and curated portfolio of these renowned hospitality brands.