Hotels & Motels NAICS 721110
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Industry Summary
The 45,358 hotel and motel companies in the US provide lodging for business and leisure travelers. The industry includes chains, franchises, and independent hotels. Franchise hotels are branded properties with independent owners. The franchise brand (Marriott, Hampton Inn, etc.) is known as the "flag." Large chains may offer franchises in addition to operating corporate-owned properties. About 70% of hotels are affiliated with a chain.
Large Capital Commitments
Building a new hotel requires significant investment in land, buildings, furnishings, and marketing expenses.
Integrating Technology
Hotels are rapidly integrating technology to improve their operational efficiency, mitigate labor shortages, and enhance the guest experience.
Recent Developments
Dec 19, 2025 - Proposed New US Visa Requirements Spark Travel Industry Concerns
- A proposed US rule would require foreign visitors from the Visa Waiver Program - which consists of about 40 mainly European countries - to provide social media handles from the past five years when applying for travel authorization, along with email addresses from the past 10 years for the applicant and all immediate family, detailed personal data, and even DNA. The US Travel Association warns this could deter travel and have a “chilling effect” on tourism and business visits, potentially harming an industry still recovering from the backlash to Trump’s immigration policies. The requirement stems from a broader administration effort to strengthen vetting of foreign entrants. (Immigrant and non-immigrant visa applicants already face social media disclosure.) Critics say the timing is poor with the US preparing to co-host the 2026 World Cup, which is expected to draw many international visitors.
- Hotel networks are becoming a vital competitive tool for independent and boutique hotels facing pressure from large chains and powerful online travel agencies. By joining curated networks with defined quality standards, smaller properties gain increased visibility, credibility and access to global distribution channels they could not easily build alone. These networks offer shared marketing, sales support and loyalty-driven demand that can improve occupancy and revenue while allowing hotels to retain their individuality. For travelers, networks act as a trusted filter, signaling consistent quality across diverse destinations. Within the hotel industry, the growing reliance on networks reflects a broader shift toward collaboration, enabling independents to achieve scale, reduce reliance on discounting, and compete more effectively without sacrificing brand identity.
- Large conventions and trade shows are major revenue drivers for US hotels and the hospitality sector. For example, Orlando’s Global Pet Expo (March 2025) drew about 20,000 attendees from 105 countries, generating over $45 million in local economic activity, largely through hotels, restaurants, and transport. Similar domestic events routinely push nearby hotel occupancy near full capacity and allow average daily rates to spike 20-60% above normal, sometimes doubling typical pricing. Hotels closest to venues see the greatest benefit, making proximity, dynamic pricing, and targeted amenities, like shuttles or flexible check-in/out, critical strategies. These events also boost revenue per available room and ancillary spending, underscoring the outsized impact conventions have on US hospitality markets. For hotel operators, aligning operations with the convention calendar can yield substantial gains in both occupancy and profitability.
- US hotels are increasingly focusing on balancing online travel agency (OTA) partnerships with direct bookings to enhance profitability and guest loyalty. While OTAs like Booking.com offer hotels global reach and drive volume, they come with high commission fees and limited access to guest data. To mitigate these challenges, hotels are employing strategies such as offering value-added incentives like free breakfast or late checkout to encourage direct bookings. Additionally, optimizing hotel websites for mobile devices and ensuring a seamless booking experience can reduce "leakage," where potential direct bookers end up on an OTA. Implementing smart pricing strategies allows hotels to maintain competitive edge without breaching OTA agreements. Collecting guest data during the booking process, even from OTA reservations, enables hotels to personalize services and foster repeat business.
Industry Revenue
Hotels & Motels
Industry Structure
Industry size & Structure
A typical hotel employs fewer than 30 workers and generates about $5 million in annual revenue.
- The hotel industry consists of about 45,340 companies that employ 1.3 million workers and generate $221 billion annually.
- The industry includes chains, franchises, and independent hotels. Franchise hotels are branded properties ("flags") with independent owners. Large chains may offer franchises in addition to operating corporate-owned properties. About 72% of hotels are affiliated with a chain.
- Hotel categories are defined by price and the level of services and amenities offered. General classifications include luxury, upscale, midscale, and economy.
- Specialized hotels include resorts (which cater to vacationers) and extended stay properties (which include kitchens and additional space). Some corporate chains offer timeshare units, which give guests the option to stay at a particular property during a scheduled period.
- Large companies include Marriott International (Marriott, Renaissance, Courtyard, Fairfield Inn, Ritz-Carlton), Hilton Worldwide (Hilton, Doubletree, Embassy Suites, Hampton Inn, Homewood Suites), InterContinental Hotels (Holiday Inn, Crowne Plaza, Staybridge Suites, Candlewood Suites), and Best Western.
- Varying strength among flag hotels leads to varying levels of risk for new properties.
Industry Forecast
Industry Forecast
Hotels & Motels Industry Growth
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