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Hotels Market Size is Expected to grow at a CAGR of 5.0 % by 2035:Transforming Hospitality through Technology, Sustainability, and Personalized Guest Experiences

11-11-2025 02:49 PM CET | Consumer Goods & Retail

Press release from: Transparency Market Research

Hotels Market

Hotels Market

The global hotels industry was valued at US$ 1,500.6 Bn in 2024. The global hotels market is estimated to grow at a CAGR of 5.0% from 2025 to 2035 and reach US$ 2,551.0 Bn by the end of 2035. The hotel sector continues to evolve rapidly, driven by rising travel demand, digital transformation, and changing consumer expectations. The post-pandemic rebound, coupled with advancements in hospitality technology and the expansion of sustainable tourism practices, is reshaping how hotels operate and engage with guests.

Hotels remain central to the global tourism and travel ecosystem. As international and domestic tourism flourishes, particularly in emerging economies, the need for diverse accommodation options-from luxury resorts and boutique hotels to business and budget stays-is steadily increasing. This growth is not only a result of leisure travel but also business tourism, MICE (meetings, incentives, conferences, and exhibitions) events, and the rise of digital nomadism.

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Market Drivers

One of the key drivers propelling the hotels market is the resurgence of global travel. With borders reopening and consumer confidence returning, the tourism industry has experienced a strong recovery. Increasing disposable income, evolving lifestyles, and a growing desire for experiential travel are fueling hotel bookings worldwide. Moreover, millennials and Gen Z travelers are prioritizing experiences over possessions, preferring unique and personalized stays that go beyond traditional hospitality.

Digital transformation is another major growth catalyst. The adoption of artificial intelligence (AI), the Internet of Things (IoT), and big data analytics is revolutionizing hotel management and guest services. Smart hotels that use AI-powered chatbots, contactless check-ins, voice-controlled room features, and data-driven personalization are becoming the industry norm. These technologies not only enhance guest satisfaction but also improve operational efficiency and cost management for hoteliers.

The increasing importance of sustainability and eco-friendly practices is shaping investment and development decisions in the hotel industry. Guests today are more environmentally conscious, prompting hotels to adopt green building designs, renewable energy sources, waste reduction systems, and water conservation initiatives. Major global hotel chains are aligning with ESG (environmental, social, and governance) goals to reduce their carbon footprints and promote responsible tourism.

Additionally, the integration of digital marketing and online booking platforms has significantly boosted accessibility and convenience for consumers. Online travel agencies (OTAs), metasearch engines, and direct brand apps allow travelers to compare prices, read reviews, and book rooms instantly. This shift toward digital channels has increased competition among hotels to enhance their online visibility and customer engagement.

Market Challenges

Despite its strong growth trajectory, the global hotels market faces certain challenges. Fluctuations in global tourism caused by geopolitical tensions, economic slowdowns, and health crises can impact occupancy rates and profitability. Labor shortages and rising operational costs, particularly in housekeeping, maintenance, and food services, are also putting pressure on the industry.

Competition from alternative accommodation platforms such as Airbnb and Vrbo presents another challenge. These platforms offer travelers flexible, often cost-effective options, pushing traditional hotels to rethink their pricing strategies and value propositions. To remain competitive, hotels are increasingly focusing on offering differentiated experiences, superior service quality, and loyalty programs.

Segmentation Overview

The hotels market can be broadly categorized by type, application, and region.

By type, the market includes luxury hotels, upscale hotels, midscale hotels, and economy hotels. Luxury and upscale hotels dominate revenue generation due to premium pricing, but the midscale segment is witnessing the fastest growth, driven by affordability and expanding middle-class travel.

By application, the market is divided into leisure and business segments. Leisure travel remains the dominant contributor, fueled by tourism and recreational trips. However, business travel and MICE activities are regaining momentum as companies resume in-person events and conferences.

Regional Insights

Asia Pacific currently leads the global hotels market and is expected to maintain its dominance through 2035. The region's expanding tourism infrastructure, growing middle-class population, and government initiatives promoting tourism are key growth enablers. China, India, Japan, Thailand, and Indonesia are major markets witnessing substantial hotel development. The rise of domestic tourism in these countries has further strengthened the industry's resilience.

North America remains one of the largest and most mature hotel markets. The United States, in particular, continues to see consistent demand for both leisure and business travel, supported by a well-established hospitality network and innovative hotel brands. The growing adoption of smart hotel technologies and sustainability initiatives is further boosting regional competitiveness.

Europe's hotel industry benefits from a strong cultural and historical tourism base. The region's diverse travel offerings, ranging from luxury resorts in France and Italy to boutique stays in Eastern Europe, attract millions of international tourists each year. The emphasis on eco-friendly accommodations and digital guest experiences is expected to drive future market expansion.

The Middle East & Africa region is witnessing rapid hotel development, particularly in Gulf Cooperation Council (GCC) countries such as the UAE and Saudi Arabia. Large-scale tourism projects like Saudi Vision 2030 and Expo 2020 Dubai have spurred significant investment in luxury hotels and resorts. Meanwhile, Africa's emerging tourism destinations, such as Kenya, Morocco, and South Africa, are attracting global hotel chains.

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Key Market Players

Leading players in the global hotels market include Marriott International, Hilton Worldwide Holdings Inc., Hyatt Hotels Corporation, Accor Group, InterContinental Hotels Group (IHG), Wyndham Hotels & Resorts, Choice Hotels International, Four Seasons Hotels and Resorts, Radisson Hotel Group, and Shangri-La International Hotel Management Ltd.

These companies are adopting strategies such as mergers, acquisitions, franchise expansions, and digital transformation to enhance their global footprint. For example, Marriott and Hilton are investing in smart room technology and AI-driven guest personalization, while Accor and IHG are expanding in emerging markets with flexible hotel concepts catering to local travelers.

Accor
Marriott International
Hyatt hotels
Hilton Worldwide
InterContinental Hotels Group
Best Western Hotels
Choice Hotels International, Inc.
Wyndham Destinations
Radisson Hotel Group
Indian Hotels Company Limited.
La Mamounia
Royal Mansour Marrakech
The Royal Portfolio
Angama (Pty) Ltd
Capella Hotel Group Pte Ltd

Market Opportunities and Future Outlook

The future of the hotels market lies in innovation, personalization, and sustainability. Smart hotels equipped with IoT-enabled devices, AI-powered customer service, and real-time data analytics will redefine the guest experience. Personalized offerings based on guest preferences-ranging from customized dining menus to curated travel itineraries-will become a key differentiator for hotel brands.

The rise of "bleisure" travel (a blend of business and leisure) presents a significant growth opportunity. As remote work becomes more prevalent, professionals are extending work trips into leisure stays, creating demand for hotels that cater to both business and relaxation needs.

Sustainability will continue to shape investment decisions. Green certifications, zero-waste initiatives, and carbon-neutral operations are becoming essential for maintaining brand reputation and regulatory compliance. Furthermore, the integration of renewable energy, eco-friendly building materials, and water recycling systems will define the next generation of hotel infrastructure.

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About Transparency Market Research

Transparency Market Research, a global market research company registered at Wilmington, Delaware, United States, provides custom research and consulting services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insights for thousands of decision makers. Our experienced team of Analysts, Researchers, and Consultants use proprietary data sources and various tools & techniques to gather and analyses information.

Our data repository is continuously updated and revised by a team of research experts, so that it always reflects the latest trends and information. With a broad research and analysis capability, Transparency Market Research employs rigorous primary and secondary research techniques in developing distinctive data sets and research material for business reports.

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