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Hotel Accommodations - US - November 2011

The hotel industry, including hotels and motels, casino hotels and bed and breakfast inns, has had a tough go of it in the troubled economy, as both leisure and business travel waned. Sales were flat in 2008, followed by an 11.8% drop in 2009. Subsequent growth is evident, but meager when taking into account the necessary climb to get out of the hole created by the recession.

Leading operators have not gone down without a fight, and incentives such as rate discounts, ramped up loyalty programs and complementary amenities have been employed to attract guests. However, as the industry continues to improve and demand for rooms increases, new challenges emerge. This report details what can be learned from what the industry experienced at the height of the recession, as well as what needs to be done to ensure future growth, including:

  • Sales trends and revenue forecasts of three segments that comprise the paid accommodations market, and the external forces driving growth
  • Factors that are keeping growth in check, such as competing accommodation choices and continued high industry unemployment
  • A discussion of leading hotel brands, which chains have fared best over time, and how this relates to recessionary initiatives
  • How revenue sources are shifting, fee implementation, and how to best maximize returns without alienating guests
  • The most important factors guests consider when choosing hotel accommodations
  • How demographic factors such as gender, age, lifestage and household income impact guest wants and needs
  • Which amenities are most important, to whom, and which guests are more likely to pay extra for additional perks
  • The importance of loyalty programs, who is using them, and opportunities for growth

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Direct marketing data and creative
                • Advertising creative
                  • Abbreviations and terms
                    • Abbreviations
                      • Terms
                      • Executive Summary

                        • Hotel revenues slowly climbing back
                          • All segments impacted by economy; recovery looks to be diverse
                            • Leading hotel companies lure guest through dark economic cloud
                              • Getting back to basics…
                                • … but keeping on top of technology
                                  • Low-cost alternatives, fees, and industry unemployment threaten growth
                                    • Hotel and motel usage
                                      • Hotels are used most for holiday/leisure travel
                                        • Midscale hotels used most; frequent travelers opt for upscale
                                          • Price the most important factor in hotel choice
                                            • Leisure travelers book through hotel website
                                              • Age and lifestage determine premium-worthy amenities
                                                • Cleanliness the top concern when booking an unfamiliar hotel
                                                  • Race/Hispanic origin impacts on hotels use
                                                  • Insights and Opportunities

                                                    • Basic amenities: cleanliness and comfort
                                                      • Staying ahead of the social networking and technology curve
                                                        • Guests as brand ambassadors
                                                          • Targeting the next generation
                                                            • Best-price guarantees, flash sales and daily deals
                                                              • On-property food and beverage outlets can enhance the appeal
                                                              • Inspire Insights

                                                                  • Trend: New Fundamentalism
                                                                    • Trend: Access All Areas
                                                                    • Market Size and Forecast

                                                                      • Key points
                                                                        • Industry battles back from recession
                                                                          • Sales and forecast of market
                                                                            • Figure 2: U.S. sales and forecast for hotels and paid accommodations, at current prices, 2006-16
                                                                            • Figure 3: U.S. sales and forecast for hotels and paid accommodations, at inflation-adjusted prices, 2006-16
                                                                          • Fan chart forecast
                                                                              • Figure 4: U.S. sales and fan chart forecast for hotels and paid accommodations, at current prices, 2006-16
                                                                            • International travelers to buoy future growth
                                                                            • Market Drivers

                                                                              • Key points
                                                                                • Economic factors
                                                                                  • Disposable personal income limits spending
                                                                                    • Figure 5: Real disposable income, 2007-11*
                                                                                  • Consumer confidence tumbles in the face of a double-dip recession
                                                                                    • Figure 6: Consumer sentiment index, January 2007–October 2011
                                                                                  • Unemployment and home foreclosures drive low consumer confidence
                                                                                      • Figure 7: Unemployment and underemployment rate, January 2007-October 2011
                                                                                    • Hotel industry improving faster than economy…
                                                                                      • Figure 8: Industry-wide performance statistics, 2005-10
                                                                                    • … however, consumers and lenders remain cautious
                                                                                      • Figure 9: Overall Traveler Sentiment Index, March 2007-October 2011
                                                                                    • Business and high-end properties drive demand
                                                                                      • Demographic factors
                                                                                        • Figure 10: Population, by age, 2006-16
                                                                                        • Figure 11: Population, by race and Hispanic origin, 2006-16
                                                                                    • Competitive Context

                                                                                      • Overview
                                                                                        • Hostels
                                                                                          • CouchSurfing
                                                                                            • Figure 12: Top 10 countries for couch-surfers, by number of people and percentage of total, January 2011
                                                                                            • Figure 13: Couch-surfers (all countries), by age group, December 2010
                                                                                          • Home swapping and rentals
                                                                                            • Camping
                                                                                              • Figure 14: Overnight camping stays at U.S. National Parks, 2000-10
                                                                                              • Figure 15: Overnight camping stays at U.S. national parks, by type, 2000-10
                                                                                          • Industry Challenges

                                                                                            • Internet booking taxes
                                                                                              • The fee increase/guest satisfaction imbalance
                                                                                                  • Figure 16: Employment and unemployment in accommodation, January 2001–October 2011
                                                                                                • Bedbugs top-of-mind for guests
                                                                                                  • Figure 17: Attitudes toward pest control and hotel stays, December 2010
                                                                                              • Segment Performance

                                                                                                • Key points
                                                                                                  • Hotels and motels the largest share of market
                                                                                                    • Sales of market, by segment
                                                                                                      • Figure 18: U.S. sales for hotels and paid accommodations, by segment, 2009 and 2011
                                                                                                      • Figure 19: U.S. sales and forecast for hotels and paid accommodations, by segment, 2006-16
                                                                                                  • Segment Performance—Hotels/Motels

                                                                                                    • Key points
                                                                                                      • Business and luxury stays lead sales declines as well as recent growth
                                                                                                        • RevPAR growth through rate increases
                                                                                                          • Sales and forecast of hotels and motels
                                                                                                            • Figure 20: U.S. sales and forecast of hotels and motels, at current prices, 2006-16
                                                                                                        • Segment Performance—Casino Hotels

                                                                                                          • Key points
                                                                                                            • Casino hubs slow to rebound amid growth of regional gaming opportunities
                                                                                                              • Casino accommodation growth contingent on diversification
                                                                                                                • Sales and forecast of casino hotels
                                                                                                                  • Figure 21: U.S. sales of casino hotels, at current prices, 2006-16
                                                                                                              • Segment Performance—Bed and Breakfast Inns

                                                                                                                • Key points
                                                                                                                  • Bed and breakfasts work on image and promotional efforts
                                                                                                                    • Future growth contingent on expanding target guest market
                                                                                                                      • Sales and forecast of bed and breakfast inns
                                                                                                                        • Figure 22: U.S. sales of bed and breakfast inns, at current prices, 2006-16
                                                                                                                    • Leading Companies

                                                                                                                      • Overview
                                                                                                                        • Marriott International
                                                                                                                          • Starwood Hotels
                                                                                                                            • Wyndham Hotel Group
                                                                                                                              • InterContinental Hotels Group
                                                                                                                                • Choice Hotels International
                                                                                                                                  • Accor
                                                                                                                                    • Additional hotel group loyalty programs
                                                                                                                                    • Innovations and Innovators

                                                                                                                                      • Smartphone and tablet applications
                                                                                                                                        • Themed hotel stays
                                                                                                                                          • Repurposing the lobby
                                                                                                                                            • Eco-friendly initiatives
                                                                                                                                            • Brands and the Advertising Landscape

                                                                                                                                              • Overview of the brand landscape
                                                                                                                                                • Wyndham
                                                                                                                                                  • Figure 23: Brand analysis of Wyndham, 2011
                                                                                                                                                • Television
                                                                                                                                                  • Figure 24: Wyndham television ad, 2011
                                                                                                                                                • Web and social media
                                                                                                                                                  • La Quinta
                                                                                                                                                    • Figure 25: Brand analysis of La Quinta, 2011
                                                                                                                                                  • Television
                                                                                                                                                    • Figure 26: La Quinta television ad, 2011
                                                                                                                                                  • Web and social media
                                                                                                                                                    • Motel 6
                                                                                                                                                      • Figure 27: Brand analysis of Motel 6, 2011
                                                                                                                                                    • Television
                                                                                                                                                      • Figure 28: Motel 6 television ad, 2011
                                                                                                                                                    • Web and social media
                                                                                                                                                      • Holiday Inn
                                                                                                                                                        • Figure 29: Brand analysis of Holiday Inn, 2011
                                                                                                                                                      • Television
                                                                                                                                                        • Figure 30: Holiday Inn television ad, 2011
                                                                                                                                                      • Web and social media
                                                                                                                                                        • Residence Inn
                                                                                                                                                          • Figure 31: Brand analysis of Residence Inn, 2011
                                                                                                                                                        • Television
                                                                                                                                                          • Figure 32: Residence Inn television ad, 2011
                                                                                                                                                        • Web and social media
                                                                                                                                                          • Best Western
                                                                                                                                                            • Figure 33: Brand analysis of Best Western, 2011
                                                                                                                                                          • Television
                                                                                                                                                            • Figure 34: Best Western television ad, 2011
                                                                                                                                                          • Web and social media
                                                                                                                                                            • Added incentives used to lure in guests
                                                                                                                                                              • Hotels promote creating memories
                                                                                                                                                              • Past 12 Month Hotel/Motel Usage

                                                                                                                                                                • Key points
                                                                                                                                                                  • Demand returning
                                                                                                                                                                    • Figure 35: Stayed at a hotel/motel in the last 12 months, January 2006-March 2011
                                                                                                                                                                    • Figure 36: Travel behavior compared to last year, 2008-10
                                                                                                                                                                  • Those aged 25-54 and affluent consumers drive hotel growth
                                                                                                                                                                      • Figure 37: Stayed at a hotel/motel in the last 12 months, by age, February 2010-March 2011
                                                                                                                                                                      • Figure 38: Stayed at a hotel/motel in the last 12 months, by household income, February 2010-March 2011
                                                                                                                                                                    • Hilton maintains steady trended use
                                                                                                                                                                        • Figure 39: Hotel brands stayed at for any reason in the last 12 months, January 2006-March 2011
                                                                                                                                                                      • Strong loyalty programs help drive use
                                                                                                                                                                          • Figure 40: Reason for hotel stay by hotel brands stayed at in the last 12 months, February 2010-March 2011
                                                                                                                                                                        • Guest stay at like-type hotels when branching out from preferred brand
                                                                                                                                                                          • Figure 41: Hotel brands comparison by hotel brands stayed at in the last 12 months, February 2010-March 2011
                                                                                                                                                                        • Hilton and Marriott set a high bar for loyalty programs
                                                                                                                                                                            • Figure 42: Enrolled in frequent hotel guest program, by hotel brands stayed at in the last 12 months February 2010-March 2011
                                                                                                                                                                        • Reasons for Staying at a Hotel

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Holiday/leisure travel led by short vacations
                                                                                                                                                                              • Figure 43: Reasons for staying at a hotel in the last 12 months and reason for most recent stay, August 2011
                                                                                                                                                                            • Age and lifestage dictate type of stay
                                                                                                                                                                              • Figure 44: Reason for any stay at a hotel in the last 12 months, by age, August 2011
                                                                                                                                                                          • Hotel Type Usage

                                                                                                                                                                            • Key points
                                                                                                                                                                              • Midscale hotels see the greatest use
                                                                                                                                                                                • Figure 45: Hotel type used most recently, last 12 month usage, used more than 12 months ago, and never used, August 2011
                                                                                                                                                                              • The affluent opt for upscale and luxury
                                                                                                                                                                                • Figure 46: Hotel type used most recently, by household income, August 2011
                                                                                                                                                                              • Business travelers stay at the widest array of hotel types
                                                                                                                                                                                • Figure 47: Hotel type used most recently, by reason for any stay at a hotel in the last 12 months, August 2011
                                                                                                                                                                            • Important Factors in Choosing a Hotel

                                                                                                                                                                              • Key points
                                                                                                                                                                                • Price is the most important factor in hotel selection
                                                                                                                                                                                  • Figure 48: Importance of different factors in choosing hotel, August 2011
                                                                                                                                                                                • Age impacts attraction for amenities
                                                                                                                                                                                  • Figure 49: Most important factor in choosing hotel, by age, August 2011
                                                                                                                                                                                • Affluent guests prioritize internet, quality ratings, on-property facilities, loyalty programs
                                                                                                                                                                                  • Figure 50: Most important factor in choosing hotel, by household income, August 2011
                                                                                                                                                                              • Booking Process for Most Recent Leisure Hotel Stay

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • Hotel website the leading source for booking leisure hotel stays
                                                                                                                                                                                    • Figure 51: Booking process for most recent leisure hotel stay, by age, August 2011
                                                                                                                                                                                  • Less affluent are more spontaneous; higher income guests plan and book in advance
                                                                                                                                                                                    • Figure 52: Booking process for most recent leisure hotel stay, by household income, August 2011
                                                                                                                                                                                • Premium-worthy Amenities and Facilities

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • Internet/Wi-Fi tops the list of premium-worthy amenities
                                                                                                                                                                                      • Age and lifestage determine premium-worthy amenities
                                                                                                                                                                                        • Figure 53: Premium-worthy amenities and facilities, by age, August 2011
                                                                                                                                                                                      • High-end properties should wrap amenities into rates
                                                                                                                                                                                        • Figure 54: Premium-worthy amenities and facilities, by household income, August 2011
                                                                                                                                                                                    • Top Concerns When Booking With an Unfamiliar Hotel

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Cleanliness the leading concern
                                                                                                                                                                                          • Figure 55: Top concerns when booking with an unfamiliar hotel, by gender, August 2011
                                                                                                                                                                                        • Disparate concerns separate the young and old
                                                                                                                                                                                          • Figure 56: Top concerns when booking with an unfamiliar hotel, by age, August 2011
                                                                                                                                                                                        • Concerns reflect customary property types used
                                                                                                                                                                                          • Figure 57: Top concerns when booking with an unfamiliar hotel, by household income, August 2011
                                                                                                                                                                                      • Impact of Race and Hispanic Origin

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • Past 12 month hotel/motel usage
                                                                                                                                                                                            • Figure 58: Stayed at a hotel/motel in the last 12 months, by race/Hispanic origin, February 2010-March 2011
                                                                                                                                                                                          • Brand usage in the last 12 months
                                                                                                                                                                                            • Figure 59: Hotel brands stayed at for any reason in the last 12 months, by race/Hispanic origin, February 2010-March 2011
                                                                                                                                                                                          • Frequent guest program enrollment
                                                                                                                                                                                            • Figure 60: Enrolled in frequent hotel guest program, by race/Hispanic origin, February 2010-March 2011
                                                                                                                                                                                          • Reasons for most recent stay at a hotel
                                                                                                                                                                                            • Figure 61: Reason for most recent hotel stay in the last 12 months, by race/Hispanic origin, August 2011
                                                                                                                                                                                          • Hotel type used for most recent stay
                                                                                                                                                                                            • Figure 62: Hotel type used most recently, by race/Hispanic origin, August 2011
                                                                                                                                                                                          • Important factors in choosing hotels
                                                                                                                                                                                            • Figure 63: Most important factor in choosing hotel, by race/Hispanic origin, August 2011
                                                                                                                                                                                          • Premium-worthy amenities and facilities
                                                                                                                                                                                            • Figure 64: Premium-worthy amenities and facilities, by race/Hispanic origin, August 2011
                                                                                                                                                                                          • Top concerns when booking with an unfamiliar hotel
                                                                                                                                                                                            • Figure 65: Top concerns when booking with an unfamiliar hotel, by race/Hispanic origin, August 2011
                                                                                                                                                                                        • Custom Consumer Groups—Marital Status and Presence of Children

                                                                                                                                                                                          • Reasons for any stay at a hotel
                                                                                                                                                                                              • Figure 66: Reason for any stay at a hotel in the last 12 months, by marital status and presence of children in household, August 2011
                                                                                                                                                                                            • Reasons for most recent stay at a hotel
                                                                                                                                                                                              • Figure 67: Reason for most recent hotel stay in the last 12 months, marital status and presence of children in household, August 2011
                                                                                                                                                                                            • Hotel type used for most recent stay
                                                                                                                                                                                              • Figure 68: Hotel type used most recently, by marital status and presence of children in household, August 2011
                                                                                                                                                                                            • Important factors in choosing hotel
                                                                                                                                                                                              • Figure 69: Most important factor in choosing hotel, by marital status and presence of children in household, August 2011
                                                                                                                                                                                          • Appendix—Other Useful Consumer Tables

                                                                                                                                                                                              • Figure 70: Hotel brands stayed at for vacation/personal reasons in the last 12 months, January 2006-March 2011
                                                                                                                                                                                              • Figure 71: Hotel brands stayed at for business reasons in the last 12 months, January 2006-March 2011
                                                                                                                                                                                              • Figure 72: Hotel brands stayed at for any reason in the last 12 months, by gender, February 2010-March 2011
                                                                                                                                                                                              • Figure 73: Hotel brands stayed at for any reason in the last 12 months, by age, February 2010-March 2011
                                                                                                                                                                                              • Figure 74: Hotel brands stayed at for any reason in the last 12 months, by household income, February 2010-March 2011
                                                                                                                                                                                              • Figure 75: Hotel brands stayed at for any reason in the last 12 months, by age, February 2010-March 2011
                                                                                                                                                                                              • Figure 76: Hotel type used most recently, by age, August 2011
                                                                                                                                                                                              • Figure 77: Enrolled in frequent hotel guest program, by gender, age, and household income, February 2010-March 2011
                                                                                                                                                                                              • Figure 78: Number of nights stayed at a hotel in the last 12 months by reason for stay, by hotel brands stayed at in the last 12 months February 2010-March 2011
                                                                                                                                                                                              • Figure 79: Most important factor in choosing hotel, by gender, August 2011
                                                                                                                                                                                              • Figure 80: Reason for any stay at a hotel in the last 12 months, by household income, August 2011
                                                                                                                                                                                              • Figure 81: Reason for any stay at a hotel in the last 12 months, by race/Hispanic origin, August 2011
                                                                                                                                                                                              • Figure 82: Reason for most recent hotel stay in the last 12 months, by gender, age, and household income, August 2011
                                                                                                                                                                                              • Figure 83: Booking process for most recent leisure hotel stay, by race/Hispanic origin, August 2011
                                                                                                                                                                                              • Figure 84: Premium-worthy amenities and facilities, by marital status and presence of children in household, August 2011
                                                                                                                                                                                              • Figure 85: Top concerns when booking with an unfamiliar hotel, by marital status and presence of children in household, August 2011
                                                                                                                                                                                          • Appendix—Trade Associations

                                                                                                                                                                                            Companies Covered

                                                                                                                                                                                            • AC Hotels
                                                                                                                                                                                            • Accor North America
                                                                                                                                                                                            • Alamo Rent a Car LLC
                                                                                                                                                                                            • American Hotel & Lodging Association (AH&LA)
                                                                                                                                                                                            • American Society of Travel Agents
                                                                                                                                                                                            • Avis Budget Group, Inc.
                                                                                                                                                                                            • Baymont Inns & Suites
                                                                                                                                                                                            • Best Western International Inc.
                                                                                                                                                                                            • Bloomberg L.P.
                                                                                                                                                                                            • Brewers’ Association of America (BAA)
                                                                                                                                                                                            • Budget Rent A Car System Inc.
                                                                                                                                                                                            • Carlson Companies Inc.
                                                                                                                                                                                            • Carlson Hotels Worldwide
                                                                                                                                                                                            • Choice Hotels International
                                                                                                                                                                                            • Christian Dior
                                                                                                                                                                                            • Days Inns Worldwide Inc.
                                                                                                                                                                                            • DoubleTree Hotels
                                                                                                                                                                                            • DreamWorks Animation SKG Inc.
                                                                                                                                                                                            • Expedia Inc.
                                                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                                                            • Fairmont Hotels & Resorts
                                                                                                                                                                                            • Foursquare
                                                                                                                                                                                            • Google, Inc.
                                                                                                                                                                                            • Groupon, Inc.
                                                                                                                                                                                            • Harley Davidson, Inc
                                                                                                                                                                                            • Hilton Hotels Corporation
                                                                                                                                                                                            • HowardJohnson International Inc.
                                                                                                                                                                                            • Hyatt Corporation
                                                                                                                                                                                            • Interactive Travel Services Association
                                                                                                                                                                                            • InterContinental Hotels Group PLC
                                                                                                                                                                                            • International Travel Services Association (ITSA)
                                                                                                                                                                                            • J.D. Power and Associates
                                                                                                                                                                                            • La Quinta Corporation
                                                                                                                                                                                            • LinkedIn
                                                                                                                                                                                            • Malaysia Airlines
                                                                                                                                                                                            • Marriott International, Inc.
                                                                                                                                                                                            • Metro-Goldwyn-Mayer Inc.
                                                                                                                                                                                            • Motel 6
                                                                                                                                                                                            • National Railroad Passenger Corporation
                                                                                                                                                                                            • National Tour Association (NTA)
                                                                                                                                                                                            • Novotel
                                                                                                                                                                                            • Office of Travel and Tourism Industries
                                                                                                                                                                                            • Orient-Express Hotels, Trains & Cruises
                                                                                                                                                                                            • Red Lion Hotels Corporation
                                                                                                                                                                                            • Red Roof Inns
                                                                                                                                                                                            • Sheraton Hotels & Resorts
                                                                                                                                                                                            • Starbucks Corporation
                                                                                                                                                                                            • Starwood Hotels & Resorts Worldwide, Inc.
                                                                                                                                                                                            • Target Corporation
                                                                                                                                                                                            • Terminix International Company L.P.
                                                                                                                                                                                            • The Ritz-Carlton Hotel Company, L.L.C.
                                                                                                                                                                                            • Tiffany & Co.
                                                                                                                                                                                            • Travelocity.com L.P.
                                                                                                                                                                                            • Travelodge
                                                                                                                                                                                            • Travelodge Hotels Inc.
                                                                                                                                                                                            • Twitter, Inc.
                                                                                                                                                                                            • U.S. Bureau of Labor Statistics
                                                                                                                                                                                            • U.S. Bureau of the Census
                                                                                                                                                                                            • U.S. Department of Agriculture
                                                                                                                                                                                            • Universal Studios Inc.
                                                                                                                                                                                            • University of Michigan, The
                                                                                                                                                                                            • US Department of Commerce
                                                                                                                                                                                            • US Department of Labor
                                                                                                                                                                                            • Walt Disney Company, The
                                                                                                                                                                                            • World Travel and Tourism Council (WTTC)
                                                                                                                                                                                            • Wyndham Worldwide Corporation
                                                                                                                                                                                            • YouTube, Inc.

                                                                                                                                                                                            Hotel Accommodations - US - November 2011

                                                                                                                                                                                            £2,684.63 (Excl.Tax)