It is projected that the market for luxury hotels will grow from an expected US$ 99.868 billion in 2023 to US$ 117.169 billion by 2033. Through2033, the market for luxury hotels is anticipated to expand at a CAGR of 5.3%. The expanding business and tourism sectors, rising living standards, rising disposable income, and an increasing desire for leisure travel are all potential drivers of the luxury hotel market.
The luxury hotel industry is expected to be driven by expanding business and tourist industries across several regions, rising disposable income, rising living standards, and a rising consumer desire for leisure travel. Some key factors that draw customers to luxury resorts are the rise in purchasing power and living standards.
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Emerging Trends and Influences Shaping the Luxury Hotel Market
The desire for luxury travel experiences is fueled by the rising middle class and rising disposable income in emerging economies. Luxury hotels are being forced to innovate and provide individualized services due to the growth of social media and the influence of influencers, which has fostered a craving for distinctive and Instagram-worthy experiences.
Luxury hotels have been inspired to provide distinctive products like health programs, culinary experiences, and cultural events due to the growing trend towards experiential travel, where travelers seek authentic and immersive encounters. The luxury hotel market is developing due to the expanding global tourist sector and the emergence of luxury travel niches like eco-tourism and adventure tourism.
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Global Financial Crises and the Luxury Hotel Sector: A Restraining Force
The effects of economic downturns and worldwide financial crises are one restraint on the demand for luxury hotels. Luxury traveler expenditure typically decreases during these times as consumers become more frugal with their discretionary spending.
The market may be constrained by shifting consumer travel habits and tastes, such as an increase in demand for immersive and distinctive lodgings like boutique hotels or vacation rentals. The traditional hotel sector has been shaken by the emergence of alternative housing options provided by websites like Airbnb, increasing competition for luxury hotels.
Regional Outlook
The North American area led the market, and this trend is anticipated to last during the projection period. Due to its status as a major international financial center and one of the world’s most sought-after travel destinations, the United States accounted for the greatest revenue share in that industry.
The largest growth rate is anticipated to be seen in the Asia-Pacific area. The Asia Pacific area’s tourism spending has increased due to rising disposable income among households in the region. Financial hubs like China, Japan, and Singapore draw business travelers from the area. Due to the region’s significant climatic and geographic diversity, which makes it one of the most well-liked tourist destinations in the world, there is moderate growth and a high penetration rate.
Key Takeaways
- The United States might increase its market share by 6% between 2023 and 2033.
- Between 2023 and 2033, Germany may hold 3.5% of the luxury hotel industry.
- Japan’s share of the luxury hotel industry could reach 4% between 2023 and 2033.
- Australia to hold a 5.2% share of the market from 2023 to 2033.
- During the forecast period, Chinese luxury hotel business to expand at a CAGR of 6.5%.
- From 2023 to 2033, the United Kingdom luxury hotel industry registered at a 6.6% CAGR.
- Through 2033, the Indian luxury hotel market to record a CAGR of 4.5%.
- The luxury segment holds a market share of 31% in the room type category between 2023 and 2033.
- The business hotels sector to grab a significant market share of 28% in the type category between 2023 and 2033.
Competitive Landscape
Few of the big luxury hotel competitors now control most of the market in terms of market share. The infrastructure development by the local government and other facilities is luring businesses and tourists thanks to technical breakthroughs and service improvements. The luxury hotel market participants engage in mergers and acquisitions (M&A) and strategic partnerships to increase their geographic reach.
New Advancements
- Exclusive talks about creating what they believe may be the world’s top lifestyle operator in the hospitality industry were started in November 2020 by the hotel giant Accor, located in Paris, and the hospitality group Ennismore, based in London. The Hoxton, Gleneagles, Delano, SLS, Mondrian, SO/, Hyde, Mama Shelter, 25h, 21c Museum Hotels, Tribe, Jo&Joe, and Working From brands may be combined into a new independent asset-light corporation through this all-share transaction.
- Pyramid Hotel Group, located in Boston, and Hamilton Hotel Partners, based in London, finalized their merger in February 2020. The united company or asset operates 141 hotels with 32,000 rooms in eight different nations.
Key Players
- Four Seasons Holdings Inc.
- The Luxe Life Hotel
- Intercontinental Hotels Group
- Marriott International Inc.
- Hyatt Corporation
- ITC Hotels Limited
- Shangri-La International Hotel Management Ltd.
- Jumeirah International LLC
- The Indian Hotel Companies Limited
Key Segments
By Type:
- Business Hotels
- Airport Hotels
- Suite Hotels
- Resorts
- Others
By Room Type:
- Luxury
- Upper-Upscale
- Upscale
By Category Type:
- Chain
- Independent
By Region:
- North America
- Latin America
- Asia Pacific
- Middle East and Africa
- Europe
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Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer, Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 5000 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.
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