Luxury Hotel Market Growth Analysis | Industry Forecast to 2028
The global luxury hotel market size is projected to reach USD 238.49 billion by 2028, exhibiting a CAGR of 10.4% during the forecast period. According to Fortune Business Insights™, the value of this market was estimated to be USD 93.43 billion in 2020. This information is provided in its latest report, titled “Luxury Hotel Market, 2021-2028”.
The COVID-19 pandemic is proving to be detrimental to the luxury hotel market growth as the pandemic has caused a sharp contraction in the demand for hospitality services worldwide. Lockdowns, restrictions on non-essential travel, and falling incomes have led to several conferences, gatherings, and events getting delayed or canceled. In view of these dire circumstances, the market registered a drastic decline of 60.82% in 2020 and hit a value of USD 119.55 billion in 2021.
Booming Demand for Tourism Worldwide to Catalyze Market Growth
Travel and tourism activities across the globe are thriving, providing livelihoods to millions of people whilst ensuring enjoyment for vacationing individuals. According to UN World Tourism Organization’s (UNWTO) International Tourism Highlights 2019 Edition, in 2018, international tourist arrivals reached the 1.4 billion mark, growing by 5% from the previous year. In terms of revenues, 2018 was an excellent year for the tourism industry. The UNWTO report states that the value of international tourism exports in 2018 was USD 1.7 trillion, reflecting a 4% increase from 2017 levels. These numbers are favorable for luxury hotel companies as lodging is the foremost concern for travelers and staying in a premium hotel or resort is an important component of traveling for many tourists.
Accor to Open a Slew of Hotels in 2021
In January 2021, Accor SA unveiled its packed schedule of hotel openings all around the globe. The luxury hotel brand is set to inaugurate the Banyan Tree Doha in Qatar and Raffles in Udaipur and Jeddah. Accor will particularly focus on the opening of its hotels under its Fairmont brand. For instance, the company will be opening the Fairmont Century Plaza in Los Angeles, Fairmont Windsor in England, the Fairmont-managed hotel Carton House in Dublin, and the Fairmont Ramla Riyadh in Saudi Arabia. The hotel behemoth also aims at leveraging its strong portfolio of brands, sound financials, and a wide global reach to rapidly strengthen its lifestyle category of hotels by 2023.
Chain Segment to Chart an Impressive Growth Trajectory till 2028
Based on category, the market has been divided into chain and independent. Here, the chain segment is set to lead the luxury hotel market share with a comprehensive share as hotel brands are rapidly establishing their chains in different parts of the world to capture the rising demand for high-end hospitality services. These brands are particularly focusing on building a robust presence in emerging economies through partnerships with local tourism industry players. In 2018, for instance, Accor inked a deal with the South Africa-based hospitality company, Mantis Group, to expand its footprint in Africa.
On the basis of room type, the market has been categorized into luxury, upper-upscale, and upscale. By geography, this market has been grouped into North America, Europe, Asia Pacific, South America, and the Middle East & Africa.
North America Boasted a Market Size of $30.66 Billion in 2020, Says Fortune Business Insights™
- In 2020, the North America market size stood at USD 30.66 billion on account of the increasing inclination of tourists in the region towards leisure travel, with spending on luxury hotels and services being a top priority. The primary reason for this is the substantially high purchasing power of consumers across the US and Canada.
- In the Middle East & Africa region, the market is expected to make a steady headway owing to the widespread presence of oil billionaires, along with the efforts of the countries in the region to develop their domestic tourism industry.
- In South America, the easing of visa rules by regional governments will generate tremendous opportunities for luxury hotel companies in the continent. For example, in 2019, Brazil waived visa requirements for travelers from the US, Canada, Australia, and Japan.
Traditional Tourist Hotspots to Hold Attention of Key Market Players
The key players in this market are making heavy investments in augmenting their position in traditional tourism hubs, such as those in Europe and North America. This strategy is principally aimed at catering to the luxury hotel requirements of the high net worth individuals (HNWIs) in these regions. Besides this, leading hotel chains are also eyeing the hospitality opportunities being created by the growing middle-class populations in developing nations.
Information source: https://www.fortunebusinessinsights.com/luxury-hotel-market-104408