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The luxury hotel market size is estimated to grow by USD 54.46 billion accelerating at a CAGR of 4.5% between 2022 and 2027. The market is experiencing growth propelled by rising disposable income among guests and a heightened preference for luxury hotels as a means to escape monotony. The proliferation of luxury hotels worldwide further drives market expansion. However, challenges persist, including the high costs associated with luxury accommodations and the increasing number of affordable hotel options. Additionally, the threat of natural calamities and other disruptions poses a hindrance to market growth. Despite these challenges, the market continues to benefit from the growing demand for upscale hospitality experiences, fueled by affluent consumers seeking luxury and exclusivity in their accommodations. As disposable incomes rise and travelers seek unique and indulgent experiences, luxury hotels remain a sought-after choice, albeit facing challenges that necessitate strategic adaptation and resilience.
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The market share growth by the upscale segment will be significant during the forecast period. The upscale hotels offer a wide range of services and amenities such as on-site food and beverage, concierge services, meeting and conference services and facilities, a fitness center, and a business center.
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The upscale segment was valued at USD 156.59 billion in 2017 and continued to grow until 2021. The upscale hotels are generally three- and four-star hotels. Moreover, these hotels are also offering exclusive play areas for children, as many families are opting for upscale hotels for vacations and other leisure purposes. Hotel chains such as Marriott, Radisson, and Hyatt are examples of upscale hotels. Compared with the upper-upscale and luxury hotels, upscale hotels are affordable. The increasing disposable income of consumers across developing and developed economies is majorly driving the growth of the upscale rooms segment in the global luxury hotel market. This, in turn, will drive the growth of the upscale segment in the market during the forecast period.
North America is estimated to contribute 32% 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 market during the forecast period.
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The market in North America is experiencing significant growth driven by factors such as a growing baby boomer population, rising demand for micro trips from professionals, and increased interest in multigenerational customized travels. The region benefits from well-connected transportation, luxurious accommodations, and exotic tourism destinations, offering popular adventure activities like trekking, caving, hill climbing, skydiving, and surfing. The presence of renowned vendors and a surge in food festivals also contribute to the market's expansion. Multigenerational trips are on the rise, particularly among baby boomers seeking quality family time in exotic destinations with various activities. Las Vegas remains a preferred destination, particularly for casino gaming enthusiasts.
Energy plays a vital role in sustaining the emerging tourism industry, catering to corporate industries and individuals with rising disposable incomes and a desire for leisure travel. This drives the demand for resorts and hotels, which offer superior comfort, aesthetics, and advanced amenities facilitated by companies like Control4 Corporation, Crestron Electronics, Inc, and AMX LLC. Automation solutions and the Internet of Things (IoT) ecosystem enhance guest experiences, providing control over room temperature, lighting, security, and entertainment. These innovations attract bookings for corporate events, leisure trips, and sports events, catering to spectators and sports teams alike. The investment in infrastructure and properties ensures the availability of the latest equipment, further elevating the standards of luxury accommodations like the Star Hotel & Casino.
The growing disposable income among the guests is a key driver boosting the market. The hospitality industry, particularly in developed economies like the US, Canada, Germany, and France, is a driving force for economic growth. Rising middle-class populations, increased disposable income, and evolving preferences among millennials contribute to higher spending on luxury experiences. The global surge in disposable income, evident in a USD 89.7 billion rise in the US from February to March 2022, according to the Bureau of Economic Analysis, is complemented by consistent growth reported by the OECD. This increased spending power, coupled with a booming tourism industry, fuels demand for these hotels, propelling the growth of the global market.
The higher acceptance of online booking platforms is a major market trend. A growing number of individuals prefer online portals for hotel bookings, facilitating organized and efficient reservations. These portals employ innovative strategies, offering customized deals, like pre-launch VIP programs for high-earning individuals, attracting early sign-ups. Notably, platforms such as booking.com allow users to tailor bookings based on their visit type, sort and filter hotels by amenities, and access detailed destination information, saving time. The increasing popularity and acceptance of online bookings are anticipated to create opportunities for vendors in the global luxury hotel market during the forecast period.
The high cost associated with luxury hotels is a key challenge hindering market growth. Luxury hotels, characterized by higher investment and localization costs, are pricier than traditional options, often limiting their appeal to premium clientele. The elevated costs associated with luxury accommodations hinder market growth, compelling some guests to opt for traditional alternatives. In 2022, the cost of renting luxury hotel rooms and suites significantly rose, with a global hotel rate increase of approximately 13% year-over-year, projected to grow by about 10% in 2023. The average daily rate (ADR) for luxury hotels in June, July, and August 2022 reached USD 200, over 11% higher than in 2019 at USD 180. This escalating ADR reflects rising room and suite prices, potentially discouraging patrons and hampering the global market's growth in the forecast period.
The market research 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.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments.
The market is thriving amid emerging tourism trends and the growing corporate sector's demand for upscale accommodations. With increasing standards of living and purchasing power, there's a notable preference for leisure travel, driving the demand for luxury resorts and high-end properties. Corporate events and stays further contribute to the market's growth, alongside leisure trips and sports events attracting spectators. These establishments boast the latest automation solutions from leading brands like Control4 system, Crestron Electronics, and AMX LLC, offering integrated control over lighting, security, and entertainment. Government regulations and sustainability initiatives, coupled with the allure of themed resorts and spas in exotic locales like Santorini Island and Sea Island, Georgia, shape the evolving landscape of luxury hospitality.
Moreover, the market caters to corporate industries and individuals seeking upscale accommodations, offering a high standard of living and comfort. Corporate stays, sports teams, and leisure travelers contribute to the demand for luxury amenities and services. These establishments prioritize aesthetics and comfort, equipped with the latest technology from brands like Control4 Corporation, Crestron Electronics, and AMX LLC, providing energy-efficient solutions and integrated control systems. From the Star Hotel & Casino in Sydney to the Gateway Canyon Resort in Colorado, luxury hotels offer diverse experiences, complemented by eco-conscious practices and themed resorts. Government policies and tax implications influence luxury hotel status and offerings, reflecting the evolving preferences of modern businesses and holidaymakers in destinations like Morocco and golf resorts like Crowne Plaza. The France hospitality market exemplifies this trend with a focus on luxurious accommodations, advanced technology integration, and sustainable practices, catering to both domestic and international guests seeking premium hospitality experiences.
Further, the economy plays a significant role in driving the demand for luxury accommodations, stimulating investments in infrastructure, and the integration of the latest equipment by companies like Crestron Electronics, Inc. and AMX LLC. Energy-efficient solutions and connected devices are increasingly prevalent, with the Internet of Things (IoT) ecosystem transforming guest experiences. These include amenities like advanced entertainment systems, climate control, and mobile applications for personalized service. Governments, such as the Albanian government, incentivize tourism through tax exemptions and favorable regulations. A diverse range of hotel types cater to various preferences, including business hotels, airport accommodations, holiday resorts, and eco-conscious establishments. Themes such as golf resorts offer specialized experiences for discerning travelers seeking upscale accommodations.
Luxury Hotel Market Scope |
|
Report Coverage |
Details |
Page number |
153 |
Base year |
2022 |
Historic period |
2018 - 2022 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.5% |
Market growth 2023-2027 |
USD 54.46 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
4.92 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 32% |
Key countries |
US, China, India, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accor S.A., Aman Group Sarl., Best Western International Inc., Choice Hotels International Inc., Four Seasons Hotels Ltd., Hyatt Hotels Corp., InterContinental Hotels Group Plc, ITC Ltd., Jardine Matheson, Jumeirah International LLC, Kempinski Hotels SA, Kerzner International Ltd., LVMH Moet Hennessy Louis Vuitton SE, Marriott International Inc., Rosewood Hotel Group, Shangri La Asia Ltd., Soneva Mauritius Ltd., The Hongkong and Shanghai Hotels Ltd., The Indian Hotel Co. Ltd., and Wyndham Destinations |
Market dynamics |
Parent market analysis, market forecasting, 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 market forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Ownership
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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