Luxury Hotel Market is Booming globally with Marginal Growth

Posted by Mrudula Anil Karmarkar on April 5th, 2022

The global luxury hotel marketsize is expected to reach USD 115.80 billion by 2025, according to a new report by Grand View Research, Inc., registering a 4.3% CAGR during the forecast period. The market is expected to grow significantly over the forecast period owing to the increasing purchasing power of consumers and the rising number of international as well as domestic tourists on business or leisure trips.

Travelers opting for lavish vacations look chiefly for comfort and quality of service, while hotel tariffs may make for a secondary consideration. To compete in the luxury hotel market, companies are focused on providing unique customer experiences by investing in infrastructure and technologically advanced appliances. Building customer relations by extending the highest degree of hospitality is also a key area of focus.

Major players in the market are integrating room control systems through the Internet of Things (IoT) platform. As a result, guests can control cooling, heating, and lighting in their rooms wirelessly through mobile-based applications. Furthermore, simplified hotel reservation processes have upped demand in recent years. Online hotel bookings are supplemented by readily-available information in the form of photos and videos of the property, along with customer feedback.

Hosting of sports events by a city or country has also been a major factor pushing the demand for luxury accommodations. Sports teams, as well as spectators traveling from various destinations for the tournament, tend to book their stays in luxury hotels, thus leading to a rise in the number of bookings. For instance, luxury hotel chains in Russia are believed to be gearing up for FIFA World Cup 2018.

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Major players in the market are investing heavily in infrastructure and upgrading their property with the latest equipment to enhance aesthetics and overall comfort offered to customers. Control4 Corporation; Crestron Electronics, Inc.; and AMX LLC are some of the major companies providing automation solutions for controlling lighting, security, entertainment, energy, and other connected devices with an Internet of Things (IoT) ecosystem.

Further key findings from the report suggest:

• The business hotel segment is expected to dominate the market throughout the forecast period. Thriving business tourism sector and the growing realization of the importance of rejuvenation and relaxation are driving this segment
• The holiday hotels segment was valued at a little over USD 21.0 billion in 2017; the airport hotels segment accounted for a revenue share of close to 8.0% the same year
• North America is expected to retain its position as a key revenue generator by 2025 owing to an increase in the number of rooms. Expansion of hotel properties in the U.S. by luxury hotel chains such as St Regis, The Ritz-Carlton Hotel Company, L.L.C., Four Seasons Hotels Limited, and Fairmont Hotels & Resorts will also contribute to the market’s growth
• The Asia Pacific region is projected to expand at a CAGR of over 5.0% over the forecast period
• Key players in the market include Shangri-La International Hotel Management Ltd.; Marriott International, Inc.; Taj Hotels Palaces Resorts Safari; AccorHotels; and InterContinental Hotels Group.

Key players in the market include Marriott International, Inc.; Shangri-La International Hotel Management Ltd.; InterContinental Hotels Group; AccorHotels; Taj Hotels Palaces Resorts Safari; and Four Seasons Hotels Limited.

Among the key competitors, Marriott International, Inc. contributed significantly to the overall market revenue in 2017. Some of the most popular global brands under the Marriot group are Ritz-Carlton, JW Marriott, Bulgari Hotels & Resorts, The Luxury Collection, St. Regis, Sheraton, Westin, Renaissance, Gaylord Hotels, Le Meridien, Delta Hotels, SpringHill Suites, Courtyard, TownePlace Suites, Fairfield Inn & Suites, and Four Points.