Hotels are part of the larger tourism and travel industry. Global hotel industry size is $550 billion. The U.S. hotel sector is $218 million. This is almost twice the amount of hotel industry in America 15 years ago.
The hotel industry has experienced tremendous growth since the 2008 recession. Business activity recovered and business travel increased. Consumer travel also rebounded quickly.
This is an attractive market for many suppliers and supporting industries. It includes everything, from real estate and finance to room design and furniture to payroll software to food and beverage and many other related businesses.
Structure of the Hotel Industry
Three main elements of hotels are brands and owners. operators are the other two. Learn more about the hotel industry structure.
These hotel brands include Wyndham, Hilton, Wyndham and Comfort Inn. These brands don’t usually own their hotels but instead franchise their brand to other hotel owners. The brand company sets the standards for the hotel chain and controls the quality and consistency of the guest experience. To encourage brand loyalty, they offer booking platforms and loyalty programs.
By economic size, the top five global hotel brands are Marriott, Hilton and Best Western as well as Wyndham, Intercontinental, Wyndham, Wyndham, Choice hotels, and Accor.
The owners of hotels are often different entities than the brand or operator. Real estate investment trusts (REITS), or real estate investment groups, pool investor money to purchase hotel real estate assets. This includes the land and buildings. These hotel owners often franchise a hotel brand (sometimes called flags) to manage the hotel. While they might manage the hotel, many owners hire a third party management company for the operation of the hotel.
Although they may be part of the same company as their owners, operators are often managers of hotels. These hotel management companies are often hired by owners of hotel real estate. They manage a variety of hotels under different brand names. These managers, also known as operators, are there to maximize profits through operational expertise. They have greater buying power and are able to operate multiple operating systems because they manage many hotels.
Selling to The Hotel Industry
Many types of services and products are available to support the three aspects of the hotel industry structure: brands, owners, and operators. One example is the fact that hotels remodel their rooms and interiors on average every seven years. The hotel interior design and furniture industry is vast. The hotel industry is also a growing market for many business products and services.
The American Hotel & Lodging Association, (AHLA), and the Hotel Industry Association (HIE) are two key associations in the hotel industry.
Asian American Hotel Owners Association. AAHOA currently has around 18,000 members, which own approximately half of the hotels in the United States.
Tradeshows & Conferences
These are the top hotel conferences and tradeshows, with most occurring in the United States. There are also many other hotel-related trade-shows and conferences around the globe, which focus on different regions like Asia. These are the major U.S. events and most of them occur annually.
Hotel Experience (HX).
Boutique Design (BD), This event hosts a New York and separate West Coast shows every year.
Annual Conference of AAHOA
The Lodging Conference
The Hospitality Industry Technology Exposition and Conference, (HITEC).
Hunter Hotel Investment Conference
The Americas Lodging and Investment Summit, (ALIS).
You can find a complete listing of events in the hotel industry here.
Hotel Industry Media
These are the most important publications for the hotel industry:
Hotelier Magazine is published by the AAHOA
Lodging magazine – published by the American Hotel & Lodging Association
Hotel Business magazine
Food and Beverage
It is a huge sector in the hotel industry that deals with food and beverages (F & B). Hoteliers are competing to offer better food and beverage experiences and products. Nearly all hotels offer a complimentary or a charged breakfast. Higher-end hotels may offer room service. Most hotels of medium- to high tier have a bar and restaurant on the premises.
As guests are there to enjoy the experience, it is more important for them to have a good food and drink experience. Higher quality food and beverages will be offered by more upscale hotels. You can also get room service.
A director of food or beverage is required for any hospitality products or services. Most hotel management companies have one. Hotel brands will have food and beverage decision-makers responsible for maintaining the standards of food quality for their franchisees. There are also other players.
Group Procurement Organisations (GPOs), like Avendra, were established to combine purchasing power of multiple hotel groups and negotiate with suppliers for those hotel groups. Avendra, which was founded by Marriott in 2001, was owned by several other brands such as Hyatt and Intercontinental. It was then sold to Aramark.
You will need to work with a foodservice distribution if you want to sell F&B products to hotels. Large, national foodservice distributors like U.S. Hotels buy from Sysco and Foods. Hotels will need to buy your product if it is ‘in-distribution”. In order to sell your product to hotels, you will need to also sell to the foodservice distributors used by hotels.
Learn more about foodservice distribution by downloading our e-book Let’s Do Lunch.
Many hotels have retail outlets, particularly resort hotels and hotels of mid- to high tier. They can be anything from a small food pantry that sells snacks and beverages to a large gift shop that offers a greater selection of products. Selling to these shops, as in food and beverage, will require you to understand and sell to distributors of your product type.
Design and Furnishings
Hotels are not just in the lodging business . This is more true the higher-end hotels are. The hotel’s interior design, furniture and lighting are a major part of creating a memorable and pleasurable experience for their guests. On average, hotels redecorate and re-furbish their interiors once every 7 years. To maintain their brand and be able to charge the best room rates, hotels must keep up with current trends and decor. There is an entire industry that supplies interior design and furniture to hotels.
This aspect is covered by the Boutique Design New York and Boutique Design West tradeshows in the United States.
Shanghai International Hospitality Design & Supplies Expo is a key international event in this area.
This is it. I hope you found this blog an informative and helpful primer about the hotel industry. This market is attractive for many services and products. It is large and growing . We help companies like yours get to this market by offering consulting and marketing services. Call us to request a free introductory telephone to see how we can help.
Thank you for reading.