HOSPITALITY MARKET VALUE SET TO RECOVER FROM PANDEMIC IN 2021
The global hotel and other travel accommodation market is expected to grow from US$673.02bn in 2020 to US$801.9bn in 2021 according to a report from Reportlinker. Growth will come from the increased use of technologies and new strategies to adapt to a post-COVID world.
Technology company ReportLinker released its report “Hotel And Other Travel Accommodation Global Market Report 2021: COVID 19 Impact and Recovery to 2030”, with the positive fact that the hotel and accommodation market is unlikely to see its value diminishing. According to the report, the investment market value of the accommodation industry will grow by 19.1% calculated in CAGR (compound annual growth rate) to reach US$801.9bn in 2021. The market is expected to top US$1,052.84bn in 2025 at a CAGR of 7%.
The growth is mainly due to large hotel companies rearranging their operations and recovering from the COVID-19 impact. Since the pandemic’s emergence, restrictive containment measures involving social distancing, remote working, as well as the closure of commercial activities resulted in operational challenges.
Asia Pacific was the largest region in the global hotel and other travel accommodation market, accounting for 37% of the market in 2020. North America was the second largest region, and Africa was the smallest.
Hotels are using technologies that are transforming customer experiences. Some technologies are leading to great improvements and savings to the hotel and other travel accommodation market. ReportLinker believes the most significant trend in the accommodation industry is the use of near-field-communication (NFC) technology, infrared technologies, and robots.
NFC gives users the ability to exchange data between devices, making mobile payments an instant, secure process. Infrared sensors are used in hotels to address customer complaints involving housekeeping interruptions. Hotels are also using robots to deliver amenities to guest rooms and for other functional purposes. Hotel operators are investing in systems and technologies that can automate processes, cut costs and personalise the experience for guests.
The “Black Swan” theory
The outbreak of Coronavirus disease (COVID-19) has acted as a massive restraint on the hotel and other travel accommodation market in 2020 as governments globally imposed restrictions on travel, limiting the need for hospitality services. Steps by national governments to contain the transmission resulted in the sharpest contraction in economic activity since World War II.
According to a survey by WeSwap, the holiday destination of 37% of the millennials was inspired by social media content and 61% of the travellers want to share their experiences online
Countries entering a state of “lock down” and the outbreak itself are expected to continue to have a negative impact on business well into 2021. However, the report underlines that the accommodation market should recover from the shock based on the “black swan” event theory. Troubles faced by the industry were unexpected and do not point to fundamental weaknesses in the market or the global economy.
Increasing use of social media and access to mass media is positively impacting the tourism and hotel industries. With tourists sharing their travel information, photographs and videos on social media platforms, people are increasingly becoming aware of the tourist destinations and recreational experiences offered by different countries around the world.
According to a survey by WeSwap, the holiday destination of 37% of the millennials was inspired by social media content and 61% of the travellers want to share their experiences online. Also, the mass media is playing an important role in helping countries promote tourism by educating people about their culture.
This rising awareness will again result in large numbers of people travelling abroad and is expected to drive growth in the hotel and other travel accommodation industry once the pandemic starts to recede as the generalisation of vaccines gains pace.
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