World Market for Lodging

February 2024

Global lodging sales surpassed pre-pandemic levels for the first time in 2023. Consumers’ eagerness for travel has driven a strong recovery across all global regions. The growth of luxury travel and short-term rentals will be an important factor in driving additional growth for the industry. Several challenges are also facing the industry, however, including the impact of climate change on travel patterns and consumers’ fast-evolving expectations for loyalty programmes.

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Examining five trends shaping lodging

Strong luxury investments in Asia and the Middle East

Luxury travel is an important market for the lodging industry, given the higher profit margins compared against other lodging sectors. Lodging companies are investing heavily in developing the luxury travel space in Asia and the Middle East. The growth of luxury travel in these markets will target high-income consumers in emerging markets across these regions. Consumers have shown a strong willingness to pay more for high-level experiences post-pandemic, which will provide additional fuel to the luxury segment’s expansion.

All-inclusive market expands beyond budget

Travel prices rose dramatically following the pandemic, leaving many travellers eager to find deals. All-inclusive resorts have taken advantage by promoting themselves as budget-friendly options that provide high levels of service. The category has even made inroads with luxury travellers, with major hotel companies such as Hilton, Hyatt and Marriott announcing upscale and luxury additions to their pipeline of all-inclusive resorts.

Loyalty programmes refreshed to remain competitive against industry competitors

Lodging companies are investing significantly in loyalty programmes to retain and increase the value of their existing customer relationships. While travel companies have operated loyalty programmes for years, they are now experimenting with new technologies, such as hyper-personalisation, to build deeper relationships with their customers. Travel intermediaries are also investing in loyalty programmes, however, which could turn loyalty into a proxy in the battle between direct and intermediary bookings.

Set-jetting and the return of overtourism

Consumers are increasingly eager to travel to destinations featured in their favourite streaming TV shows or hit movies. Set-jetting, where travellers visit the locations for these shows, can provide a major bump in lodging demand for those locations. It also, however, increases the risks for overtourism. Lodging companies will need to partner with destinations to ensure they are managing travel demand sustainably.

Climate change’s impact on travel demand

Sustainability and climate change will have a substantial impact on the entire travel industry, lodging included, over the next five years. Lodging companies will come under increasing pressure to show results and improvements on sustainability initiatives, such as water and energy conservation. Additionally, seasonal demand for properties may shift, as extreme heat and other climate-related factors impact the peak northern hemisphere summer travel season.

Scope
Examining five trends shaping lodging
Global lodging sales surpass pre-pandemic levels
Mid-market hotels lead many of the largest lodging markets
Asia Pacific to reclaim title as world’s largest region for lodging in 2027
Rapid growth in the Middle East and Africa
Upscale and mid-market dominate hotel sales
Short-term rentals dominate other lodging
Emerging markets see strong growth potential
Asia Pacific leads in short-term rental listings growth
Younger generations increasing travel spending
Return of Chinese outbound travel creates opportunities in Asia Pacific
Heavy fragmentation in all regions outside North America
Airbnb becomes world’s largest lodging company
Short-term rentals encourage “experience-first” searching
Pandemic shifts lodging competitive landscape
Examining five trends shaping lodging
Luxury hotels drive growth in emerging markets
Hotels use loyalty programmes to encourage direct bookings
Hyatt incentives wider participation in its loyalty programme
Economic unease drives strong all-inclusive pipeline
Set-jetting concentrates tourism demand on select locations
Sustainability a top concern for companies and travellers
Europe leads Euromonitor’s ranking of sustainable lodging markets
Global snapshot of luxury hotels
Global snapshot of upscale hotels
Global snapshot of mid-market hotels
Global snapshot of budget hotels
Global snapshot of unrated hotels
Global snapshot of short-term rentals
Global snapshot of campsites
Global snapshot of hostels
Global snapshot of other lodging types
Regional snapshot: Asia Pacific
Regional snapshot: Australasia
Regional snapshot: Eastern Europe
Regional snapshot: Latin America
Regional snapshot: Middle East and Africa
Regional snapshot: North America
Regional snapshot: Western Europe

Travel

Travel encompasses several categories including tourism flows, lodging, travel modes, in-destination spending and booking.

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