Hotels & Motels

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 43,300 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 73% of hotels are affiliated with a chain.

Large Capital Commitments

Building a new hotel requires significant investment in land, buildings, furnishings, and marketing expenses.

Online Booking Channels Grow Powerful

The growing number of travelers who turn to the Internet to book lodging has forced hotels to alter how they do business.

Industry size & Structure

A typical hotel employs about 28 workers and generates $4-5 million in annual revenue.

    • The hotel industry consists of about 43,300 companies that employ 1.2 million workers and generates $202 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 73% 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 time share units, which give guests the option to stay at a particular property during a scheduled period of time.
    • 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
                                  Hotels & Motels Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 18, 2022 - Traveler Mask Mandate Dropped
                                  • The Transportation Security Administration will stop enforcing the Biden administration's rule mandating masks on planes, trains, and other forms of public transportation, an administration official said on April 18. The move came the same day that a federal judge in Florida struck down the mandate. US District Judge Kathryn Kimball Mizelle said the Centers for Disease Control and Prevention (CDC) exceeded its statutory authority and failed to properly justify its decision for imposing the mandate. The CDC had extended the mandate until May 3 just a few days before the mandate was struck down. The legal decision comes as COVID-19 cases have risen in a number of states due to the spread of the BA.2 subvariant of Omicron. The CDC said that it extended the mandate to evaluate the impact of the rise in cases on severe disease and health care system capacity.
                                  • Nearly 4 million Americans on average quit their jobs each month in 2021, according to the US Department of Labor. Experts have called it an unprecedented wave of workplace turnover as the economy emerged from a pandemic-induced recession that, while brief, appears to be leaving a lasting imprint on the US job market.
                                  • More companies in the travel industry are requiring their staff and guests to show proof of vaccination, according to Conde Naste Traveller magazine. The rules are complicated, however, by ever-changing vaccine proof and testing requirements used by international governments, individual states, and the US Centers for Disease Control and Prevention.
                                  • The California legislature passed a bill which requires reopening hospitality companies to offer jobs first to employees who had their jobs at least six months prior to and were laid off because of the COVID-19 pandemic. The bill requires all hospitality companies to inform former employees as to when their jobs or positions will be available after the economic crisis. The bill now advances to Governor Gavin Newsom's office.
                                  • Employment in the hotels and motels industry increased 31.8% year over year in February but was down 21% from the pre-pandemic month of February 2020.
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