The State of Hospitality Market Size (2023 – 2030)

The State of Hospitality Market is valued at USD 4774.76 billion in 2024 and is projected to reach a market size of USD 13625.35 billion by the end of 2030. Over the outlook period of 2024-2030, the market is anticipated to grow at a CAGR of 16.16%.

Earlier the hospitality industry witnessed demand only from the business sector, that is, business trips, trade-related trips, and others. Moreover, tours and travel services were also provided offline and required consumers to physically visit the place to book and confirm tickets, reservations, and transportation. This consumed a lot of time and money for both the consumer and tour operators. However, rapid advancements in technology in recent years made the travel & tourism process much easier for customers, as they can book tickets online, make reservations and view hotel room photos from their mobile, compare prices and other customer reviews, and others. In addition, there is an increase in demand for spa & wellness services by customers resulting in the development and opening of spa retreats for customers that offer a variety of therapies and treatments at an affordable rate. In addition, growing trends in fitness and healthy living increased consumer demand for solo trekking and hiking trails. Furthermore, the future for the state of hospitality holds positive with increased incorporation of AI and machine learning in the food & beverage sector, particularly for ordering and serving food to customers. Further, increasing environmental and sustainability awareness among consumers has led to the establishment of eco-friendly resorts and stays such as farm stays and village stays in the hospitality market.

Key Market Insights:

According to AHLA (American Hotel & Lodging Association), the US hotel industry is estimated to achieve US $1.3 billion in occupied room nights in the year 2023

As per IBEF (Indian Brand Equity Foundation), travel and tourism are the two largest industries with a total GDP contribution of US $178 billion in India.

As per Euro Stat, European Union residents spent 288 billion on domestic tourism trips (62%) in the year 2021.

Furthermore, as per the Office for National Statistics, overseas residents spent 7.9 billion on their UK visits in the second quarter of 2023.

The State of Hospitality Market Drivers:

Technological advancements in the hospitality industry have boosted the demand for the state of hospitality in the market.

Technology has revolutionized the hospitality industry with easy access to booking and registration services. These include increased use of online booking platforms that allow consumers to compare prices of tickets and hotel accommodations with other companies and better purchasing decisions. Further, the proliferation of mobile apps by various travel & tourism companies enables consumers to easily check room availability, see room photos, book luxury dining spaces, and engage with hospitality service providers via chat platforms. In addition, to consumer demand for relaxing and comfortable staying experiences, many hotels & resorts have incorporated smart ambient lighting and voice-enabled thermostats in hotel rooms that enhance customers’ staying experience and increase their brand trust and loyalty. Furthermore, the recent incorporation of AR and VR technology in hotel and travel & and tourism apps enables consumers to have an immersive and realistic experience while selecting their hotels and rooms. In addition, post-pandemic, there is an increase in contactless services in the hospitality industry, which include contactless check-in and check-out, contactless access to restaurant menus, contactless payments, and others.

Increasing consumption of hospitality services during seasons has boosted the demand for the state of hospitality in the market.

Hotels, restaurants, resorts, and other hospitality services witness an increase in demand during peak seasons such as festivals, school vacations, public holidays, and others. To cater to this increased demand, many hotels and restaurants offer special discounts and other offers that further attract the interest of customers. Moreover, public holidays and long weekend holidays witnessed an increase in demand for short-trip services, which include visiting hill stations, ski resorts in winter, beach destination resorts in summer and monsoon, and others. Furthermore, many hotels organize festival-related activities and gatherings inside the premises to enhance customer’s overall holiday experience and to increase their engagement with them.

The State of Hospitality Market Restraints and Challenges:

Market saturation can decline the growth of the state of the hospitality market. Due to the presence of various hotels, restaurants, entertainment centers, and other venues, there is increased competition in the market, which can reduce consumer demand due to the prevalence of similar kinds of hospitality services in the market.

Moreover, increased health & hygiene concerns post-pandemic can reduce the revenue of hospitality industries, if they do not comply with cleanliness standards and protocols.

Moreover, security & safety concerns affect the growth of the state of the hospitality market, as families, who are the major consumers of the hospitality industry, place major emphasis on women's and children's safety.

The State of Hospitality Market Opportunities:

The State Hospitality Market is witnessing an increase in demand in the market due to growing consumer preferences for luxurious, specialized, and personalized traveling experiences. Moreover, the advent of AI and machine learning technology is further transforming the restaurant and hotel sector with increased emphasis on contactless dining experiences. Moreover, the rising demand for relaxing and stress-free traveling has surged the demand for spa and wellness tourism in the market. Additionally, countries such as India and Thailand are market leaders in this segment.

THE STATE OF HOSPITALITY MARKET REPORT COVERAGE:

The State of Hospitality Market Segmentation: By Type

• Travel & Tourism

• Lodging

• Food & Beverage

In 2022, based on market segmentation by type, the travel & tourism segment occupied the highest share of about 38% in the market. This segment of hospitality is primarily concerned with travel & tourism services, which include companies and tour agencies offering various travel & tourism services such as planning & organizing of tours, and excursions, preparing itineraries, arranging accommodations for customers, booking transportation such as flight, cab, and train tickets, and others, The growth of this segment is attributed to rising demand of consumers for specialized and personalized tourism services, which provides them unique travelling experience at affordable rates.

The food & beverage segment is the fastest-growing segment during the forecast period. This segment of hospitality comprises restaurants, hotels, cafes, bars and lounges, resorts, catering services, and others that offer a varied range of food & beverage services to their customers. These include access to fine dining, personalized dining, buffet services, and catering services for special occasions and festivals such as weddings, receptions, special conferences, parties, and others. Moreover, a recent trend in veganism, plant-based diets, and authentic dishes has led to the opening of authentic restaurants that offer specialized regional and cultural cuisines to their customers. These include Italian, Chinese, Thai, Continental, Japanese, Mediterranean, vegan restaurants, and others.

The State of Hospitality Market Segmentation: By Type of Customers

• Solo Travelers

• Family

In 2022, based on market segmentation by type of customers, the family segment occupied the highest share of about 40% in the market. Families are the major customers of the hospitality sector, as they utilize various hospitality services in increasing numbers compared to any other customer type. These include food services, use of rooms and interconnected rooms in hotels & resorts, use of resort lawns for family gatherings, personal events, weddings, use of babysitting services in case of families with newborn babies and small children, and others. Moreover, post-pandemic, due to an increase in work-from-home culture, there is an increase in demand for workcation and staycation services by families.

The solo travelers segment is the fastest-growing segment during the forecast period. The growth of this segment is primarily attributed to increasing trends in adventurous trips and treks. Solo travelers comprise freelancers, photographers, adventure seekers, and others who want independence as well as flexibility in traveling to destinations. With the growth of this segment, many travel & tourism companies are curating solo traveling plans and itineraries that offer personalized traveling experiences to solo customers. Moreover, many solo group communities have emerged in the market and are offering solo group travel plans on social media platforms, which include solo biking trips, solo trekking and hiking, solo retreat trips, and others.

The State of Hospitality Market Segmentation: By Services

• Accommodation Services

• Food & Beverage Services

• Entertainment & Leisure Services

• Travel & Transportation Services

• Luxury & Boutique Services

• Meeting & Event Services

• Others

In 2022, based on market segmentation by services, accommodation services occupied the highest share of about 45% in the market. The main function of this segment is to provide accommodation services to customers, based on their requirements and budget. These include services such as accommodation in hotels, holiday inns, resorts, rental vacation villas, motels, and others that not only offer accommodation services but also other amenities and comforts to the customers. Moreover, some of the hotels offer luxurious services such as a spa & retreat, gym facility, luxury suite rooms with free room delivery services, paid laundry services, inclusive food packages, and others. In addition, many hotels offer just budget stays to customers without food and beverage facilities. These are mainly in the form of hostels and guest houses that cater to the lodging requirements of solo or budget travelers.

The entertainment & leisure services segment is the fastest-growing segment during the forecast period.  These include recreational centers and entertainment venues that offer various types of entertainment & leisure services to various segments of customers. Moreover, the growth of this segment is attributed to the busy lifestyle of people seeking relaxing and fun activities to relieve their stress. These include visiting nightclubs and bars, live music and theatre places, spas and wellness centers, hot tubs and sauna centers, and outdoor entertainment services such as water sports, biking, nature trails, and others.

The State of Hospitality Market Segmentation: Regional Analysis

• North America

• Europe

• Asia-Pacific

• South America

• Middle-East & Africa

In 2022, based on market segmentation by region, North America occupied the highest share of about 39% in the market. Increasing demand for entertainment & and leisure activities among teenagers and young adults (As per the US Bureau of Economic Analysis, outdoor recreation in New York accounted for a total US$ of 21.1 billion in the year 2020), prevalence of nightlife, and increased demand for fast food and alcoholic beverages by consumers has contributed to the demand for the state of hospitality in the region.

Middle East & Africa occupies the second largest share of about 25% in the market. Prevalence of technologically advanced hospitality experiences such as smart hotels, smart shopping malls, and personalized travel plans for families, and rising demand for business trips has increased the demand for business-class hotels & and flights in the region. For instance, as per Mastercard Economic Institute Report on Travel Industry 2023, leisure flight bookings in UAE accounted for 12% in March 2023.

Asia-Pacific witnessed a faster growth during the forecast period. Increasing demand for cultural and retreat trips both domestically and globally, in countries such as India, and the fast-booming food & and beverage sector has contributed to the demand for the state of hospitality in the region.

COVID-19 Impact Analysis on the The State of Hospitality Market

The pandemic hurt the state of the hospitality market. Due to the lockdown, there was a sharp decline in hospitality services, as many hotels, restaurants, cultural and entertainment centers, and resorts, were closed down due to the virus outbreak. Moreover, social distancing measures imposed by the government in various nations affected the food & and beverage sector and decreased the demand for food services in the market. However, many entertainment events shifted to online platforms such as music shows. In addition, due to social distancing measures, social gatherings also shifted to online platforms such as Zoom and Google Meet. There was an increasing trend in celebrating online birthdays, and events, playing games, and others, however, none of them included the consumption of any hospitality services, as most of the social gatherings took place on online platforms, which did not involve any cost or fees to be paid. This further affected the employment rate in the hospitality industry leading to the economic downturn. For instance, as per the AHLA (American Hotel & Lodging Association) Report 2023, the hotel industry witnessed the loss of jobs of 682,000 direct employees in the year 2020.

Latest Developments:

• In August 2022, Leela Bhartiya City in Bengaluru, India, launched Amaris Spa. The spa aims to deliver a luxury and rejuvenating experience to its clients with a wide range of services such as aromatherapy, various ancient and authentic massages, body treatments, and facials that use natural and herbal ingredients for customers.
• In March 2022, OrderSolutions, a call center in the USA partnered with CoverseNow, which is a market leader in AI for restaurants, developed AI for the restaurant industry. The solutions offer AI/liver contactless ordering solutions to customers that aim to reduce staffing challenges and order delays.
• In September 2021, Della Resorts in Lonavala, India, launched 24 24-hour spa service for its guests that offers a luxurious spa experience to both walk-in guests and in-house guests. Moreover, the services offered include signature ancient treatments and therapies such as bamboo massage therapy and earwax candle therapy for treating sinus and colds in guests.

Key Players:

1. Marriott International

2. Taj

3. Hilton Worldwide Holdings

4. Compass Group Plc

5. Sodexo

6. Aramark Corporation

7. McDonald’s

8. Starbucks Coffee

9. Elior

10. Jubilant FoodWorks

11. Radisson Blu

12. Hyatt Hotels Corporation

13. American Cruise Lines

14. The Happy Catering Company