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The Global Hospitality Real Estate Market size is estimated to grow at a CAGR of 10.25% between 2022 and 2027 and the size of the market is forecasted to increase by USD 75.36 billion. The growth of the market depends on several factors, including the rise in the number of quick-service restaurants, the growing investments by market vendors, and the geographical expansion by market vendors. The fast-food industry is experiencing significant growth due to increasing demand, particularly in emerging economies, resulting in a rise in the number of quick-service restaurants. Fast-food chains are expanding both domestically and internationally to capitalize on this trend. Additionally, the concept of socializing at cafes among urban youth is gaining traction, further fueling market growth. As the urban population continues to increase, the number of quick-service restaurants is also on the rise. This growth is particularly notable in countries like China and India, where new restaurants are opening rapidly, leading to a surge in demand for hospitality real estate. According to the National Restaurant Association of India (NRAI), an estimated 5,000 new restaurants are expected to open in India by 2023.
This hospitality real estate sector market research report extensively covers market segmentation by application (full-service restaurants, quick-service establishments, and catering services), type (hotels and accommodation, spas and resorts, and other services), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The rise in the number of quick-service restaurants is notably driving the market growth, although factors such as uncertain macroeconomic conditions may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Hospitality Real Estate Market Driver
The rise in the number of quick-service restaurants and specialty coffee shops is notably driving market growth. The number of fast-food restaurants is increasing, mainly due to the increase in the demand for fast food, especially in developing economies. This encourages fast-food companies to expand both domestically and internationally. The market is expected to be driven by the growing cafe concept of socializing among the urban youth during the forecast period. In addition, the growth of the urban population also increased the number of fast-food restaurants.
Differences in the tastes and preferences of different high-quality coffees further led to the birth of speciality coffee shops. As a result, major coffee chains such as Starbucks are opening their outlets in many developing countries in APAC and South America. The number of coffee shops that offer products such as iced coffee has caught the attention of young people and is expanding its reach. Moreover, the growth of infrastructure such as new airports and highways in developing countries like India gives large coffee chains space to set up their outlets. Thus, the increase in the number of fast-food restaurants will drive the market during the forecast period.
Significant Hospitality Real Estate Market Trend
Technological adoption in the real estate industry is an emerging trend in the market. One of the growing trends in the market is the adoption of technology. The increase in the adoption of technology is positively changing commercial real estate. The productivity will be much better with the adoption of new tools and also save costs for the agents, the property managers, the developers, and the tenants.
Some of the emerging trends in the market are the development of smart sensor technology which helps properties go green and also enhance energy savings, the use of the cloud-based platform that helps in recording huge databases and makes the property managers maintain better workflows and customer relationships, and big data analytics. Therefore, technology adoption is expected to drive the growth of the global market during the forecast period.
Major Hospitality Real Estate Market Challenge
Uncertain macroeconomic conditions are a major challenge impeding the hospitality real estate sector market industry. The real estate industry is highly sensitive to national and regional macroeconomic conditions. The US and global economy have experienced a period of moderate to slow growth and unprecedented volatility that is affecting the industry. Continued uncertainty about prevailing economic conditions will adversely affect the industry and continue to be risky, as customers may delay spending during the forecast period due to reduced debt loads, declines in income or assets, and negative economic news. This can have a negative impact on the demand for business premises.
Demand may also be affected by conditions in the office real estate market, labour, and health care costs, credit availability, and other macroeconomic factors. However, growing uncertainty about economic growth has discouraged foreign direct investment and delayed government subsidies, leading to project delays or cancellations and thus uncertain macroeconomic conditions. Therefore, all these factors will affect the focused market negatively during the forecast period.
The hospitality real estate sector market share growth by the full-service restaurant segment will be significant during the forecast period. A rise in the global adult population aged 25-49 years is driving the full-service establishments and, in turn, the market in focus.
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The full-service restaurant segment was valued at USD 41.83 billion in 2017 and continued to grow until 2021. Owing to a fast-paced lifestyle and busy working schedules, dining out becomes convenient and helps maintain a work-life balance. Due to the evolving consumer tastes and preferences for different cuisines, full-service e-restaurant operators are including multi-cuisine dishes in their menus. The introduction of new food items to menus attracts consumers to try new items, resulting in increased sales through commercial food service outlets. In addition, vendors worldwide provide promotional offers and discounts for dining at their restaurants as it helps vendors improve their customer service experience and helps in finding the areas of improvement. Thus, the increasing number of full-service service establishments will drive growth in the hospitality real estate sector market during the forecast period.
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North America is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the hospitality real estate sector market during the forecast period.
The US and Canada are the top countries to contribute to market growth. This is because consumers in the region are inclined toward eating out, which encourages operators to come up with new restaurants. This is increasing the number of various types of restaurants in the region. In addition, North America's food service industry is expected to grow significantly during the forecast period due to the business strategies being adopted by vendors, such as new product launches, partnerships, and others. Many quick-service restaurants will expand their operations, thereby contributing to the growth of the market in North America.
In March 2020, the pandemic affected a major number of businesses around the world. The travel restrictions had a direct negative impact on businesses, particularly those in the hotel and hospitality sector, which, in turn, negatively impacted hospitality real estate in 2020. However, with the increase in vaccination drive, the regional market is recovering from 2021, thereby positively impacting the hospitality real estate in North America during the forecast period.
The hospitality real estate sector market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Hospitality Real Estate Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Hilton Worldwide Holdings - The company operates under two segments including management and franchise, and ownership with a high focus on management and franchise.?
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
Technavio categorizes the global hospitality real estate market as a part of the global specialized consumer services market within the global diversified consumer services market. The parent global specialized consumer services market covers revenue generated by the consumer service providers, including residential services, home security services, legal services, personal services, renovation, and interior design services, consumer auction services, wedding services, and funeral services. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The hospitality real estate sector market research report forecasts market growth by revenue at global, regional, and country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Hospitality Real Estate Market Scope |
|
Report Coverage |
Details |
Page number |
153 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.25% |
Market growth 2023-2027 |
USD 75.36 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
9.77 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 35% |
Key countries |
US, China, Japan, France, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aimbridge Hospitality LLC, Apple Hospitality REIT Inc., Atrium Hospitality LP, Best Western International Inc., Choice Hotels International Inc., Extended Stay America, G6 Hospitality LLC, Hilton Worldwide Holdings Inc., Host Hotels and Resorts Inc., Huazhu Group Ltd., Hyatt Hotels Corp., InterContinental Hotels Group Plc, Jones Lang LaSalle Inc., Marriott International Inc., OTO Development, Sonesta International Hotels Corp., The Georgetown Co. LLC, and Wyndham Hotels and Resorts Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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