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Luxury Hotel Market Size, Share Global Analysis Report, 2022 – 2028
Luxury Hotel Market Size, Share, Growth Analysis Report By Category (Independent, and Chain), By Type (Airport Hotels, Business Hotels, Resorts, Suite Hotels, and Others), and By Region - Global and Regional Industry Insights, Overview, Comprehensive Analysis, Trends, Statistical Research, Market Intelligence, Historical Data and Forecast 2022 – 2028
Industry Insights
[228+ Pages Report] According to the report published by Facts Factors, the global luxury hotel market size was worth around USD 95.11 billion in 2021 and is predicted to grow to around USD 160.48 billion by 2028 with a compound annual growth rate (CAGR) of roughly 4.95% between 2022 and 2028. The report analyzes the global luxury hotel market drivers, restraints/challenges, and the effect they have on the demands during the projection period. In addition, the report explores emerging opportunities in the luxury hotel market.
Market Overview
A luxury hotel is a part of the hospitality industry and is made of hotels that offer an enhanced customer experience at a relatively high price. Although there is no set standard to describe which accommodation quality is luxury hotels, generally speaking, hotels with a rating of 4 or 5 stars providing a luxurious experience to the consumers are known as luxury hotels. The term can also be used to describe places like resorts, bed & breakfasts, and boutique accommodations as luxurious if they can provide an enhanced consumer experience. To be termed a luxury hotel, the accommodation unit should strive to achieve features like intelligent, and seamless planning of the booking process along with quick and discreet check-in & check-out process. Since the consumer ends up paying more in luxury hotels, it is the responsibility of the facility to provide the customers with exactly what they need when it comes to room and food quality along with other associated services.
Key Insights
- As per the analysis shared by our research analyst, the global luxury hotel market is estimated to grow annually at a CAGR of around 4.95% over the forecast period (2022-2028).
- In terms of revenue, the global luxury hotel market size was valued at around USD 95.11 billion in 2021 and is projected to reach USD 160.48 billion, by 2028. Due to a variety of driving factors, the market is predicted to rise at a significant rate.
- Based on category segmentation, the chain was predicted to show maximum market share in the year 2021
- Based on type segmentation, business hotels were the leading type in 2021.
- On the basis of region, North America was the leading revenue generator in 2021
Covid-19 Impact
The global market cap faced multiple issues during the pandemic, the impact of which could be witnessed until the end of 1st quarter of 2021. The hotels, restaurants, and cafes (HoReCa) segment were one of the industries that witnessed the massive loss of income due to the virus as a result of the closure of all units which lasted until the end of the second wave across regions. As per an official report, the Indian hotel industry is claimed to have lost INR 1.3 trillion in the fiscal year 2021.
Growth Drivers
- The growing population prefers leisure vacations to help create a massive consumer database
The global luxury hotel market is projected to benefit from the growing number of people who prefer to undertake leisure vacations as compared to the section preferring to stay in modest accommodations. This trend is driven by the growing income capacity of the population as a result of globalization and industrialization, resulting in enhanced spending capacity. Around 71.5% of millennials, that is people born between the early 1980s and late 1990, prefer to spend more money on an experience rather than objects and materials. The global market cap is further driven by the growing tourism and travel segment along with the adoption of technology to ease the process of planning and executing a leisure stay.
Restraints
- High cost of accommodations to restrict market expansion
The cost associated with luxury stays is one of the major factors that distinguish opulent facilities from modest hotels. They are typically on the higher end of the price section and cater to the needs of an exclusive segment of consumers, which restricts the global market to reach out to other consumers. This can be witnessed in developing or underdeveloped economies with the majority of the population lying in the middle to the low-income group, subsequently leading to a reduced global market penetration level.
Opportunities
- Growing collaborations to create growth opportunities
The global luxury hotel market size may witness further growth opportunities driven by the measures undertaken by market players to strengthen their global footprint. These measures involve strategic collaborations with domestic partners or other service providers that can help them provide better customer experience, like liaising with information technology (IT) companies to upgrade security systems or create clean and quick digital systems for easing the process of bookings, checking-in, bill payments, checking-out, amongst others.
Challenges
- Reputation management to create challenging situations during the growth trajectory
Luxury hotels, like other segments in the hospitality industry, depend completely on brand value along with the quality of consumer experience. One unfavorable comment or an unpleasant incident can lead to the destruction of a brand name within a few minutes. The highly sensitive and dependent nature of luxury hotels based on reputation management is a challenging factor since it means that the scope of error for exclusive hotels is very narrow.
Segmentation Analysis
The global luxury hotel market is segmented based on category, type, and region.
Based on category, the global market is divided into independent and chain. In 2021, the global market was led by the chain segment, which refers to the presence of multiple accommodation units of a single brand across territories, ranging from domestic to international regions. Hilton Hotels & Resorts, are a prime example of a chain of luxury accommodation units. Marriott International, a global hotel giant is estimated to have generated a revenue of USD 13.86 billion in 2021.
Based on type, the global market is segmented into airport hotels, business hotels, resorts, suite hotels, and others. 40% of the global market was dominated by business hotels in 2021, followed by airport hotels. Since business hotels generally deal with people in front of the senior management of the business, small or large, they generally tend to create more revenue.
Recent Developments:
- In August 2022, Hilton Hotels announced that it has signed a new deal to open 6 new luxury hotels in the Asia-Pacific region that will be open for operations over the next four years. The hotels include LXR, Conrad, and Waldorf Astoria brands. With this announcement, the number of hotels owned by Hilton in the region will now reach 20. The move is being regarded as the closing of key city gaps by Hilton.
- In October 2021, ITC Hotels, an Indian hotel chain, announced its plan to launch new luxury hotels across regions. The hospitality giant will collaborate with Storii to provide customers with renewed experience, with the brand called Mementos
Report Scope
Report Attribute |
Details |
Market Size in 2021 |
USD 95.11 Billion |
Projected Market Size in 2028 |
USD 160.48 Billion |
CAGR Growth Rate |
4.95% CAGR |
Base Year |
2021 |
Forecast Years |
2022-2028 |
Key Market Players |
Shangri-La International Hotel Management, Hyatt Corporation, Marriott International Inc., Taj Hotels, ITC Hotels, and others. |
Key Segment |
By Category, Type, and Region |
Major Regions Covered |
North America, Europe, Asia Pacific, Latin America, and the Middle East &, Africa |
Purchase Options |
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Regional Analysis
- North America to lead with the largest market share in the coming years
The global luxury hotel market is projected to be dominated by North America driven by the increasing tourism in the cities of the United States. Regions like New York, and Las Vegas attract millions of tourists from across the globe every year. These cities are home to multiple luxury hotels catering to the requirements of customers. As per Statista, Las Vegas hosted more than 32 million visitors in 2021. The same website has also cited that the room revenue in Las Vegas reached up to USD 454 million in the same year. These factors contribute heavily to regional market growth. The growth in the Middle East is projected to be propelled by the increasing number of high-rise luxury hotels present in the United Arab Emirates, Abu Dhabi, and other tourist places hosting consumers of all segments. For instance, the average stay cost in Atlantis, UAE, one of the most expensive hotels in the world, can go up to USD 333 for one night.
Competitive Analysis
- Shangri-La International Hotel Management
- Hyatt Corporation
- Marriott International Inc.
- Taj Hotels
- ITC Hotels
The global luxury hotel market is segmented as follows:
By Category
- Independent
- Chain
By Type
- Airport Hotels
- Business Hotels
- Resorts
- Suite Hotels
- Others
By Regional Segment Analysis
- North America
- The U.S.
- Canada
- Mexico
- Europe
- France
- The UK
- Spain
- Germany
- Italy
- Nordic Countries
- Denmark
- Sweden
- Norway
- Benelux Union
- Belgium
- The Netherlands
- Luxembourg
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- Australia
- South Korea
- Southeast Asia
- Indonesia
- Thailand
- Malaysia
- Singapore
- Rest of Southeast Asia
- Rest of Asia Pacific
- The Middle East & Africa
- Saudi Arabia
- UAE
- Egypt
- South Africa
- Rest of the Middle East & Africa
- Latin America
- Brazil
- Argentina
- Rest of Latin America
Table of Content
Industry Major Market Players
- Shangri-La International Hotel Management
- Hyatt Corporation
- Marriott International Inc.
- Taj Hotels
- ITC Hotels.
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