This might not come as a big surprise to you, but the luxury hotel market is set to grow over the coming years. According to a new report by California-based market research firm Grand View Research, Inc., the global luxury hotel market is expected to reach $115.80 billion by 2025, making for a 4.3 percent compound annual growth rate (CAGR) during that period. Grand View arrived at the figure through an analysis of published reports on the hotel industry, which it then fed into a statistical simulation modeling the growth of the luxury hotel market over the next few years.
Travelers opting for lavish vacations look chiefly for comfort and quality of service, according to the report, 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.
Here are some other highlights from the report:
- The business hotels segment is expected to dominate the market throughout the forecast period. A thriving business tourism sector and growing realization of the importance of rejuvenation and relaxation are driving this segment
- The holiday hotels segment was valued at a little over $21.0 billion in 2017; the airport hotels segment accounted for a revenue share of close to 8.0 percent 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 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 percent 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.