The US hotel and motel industry consists of about 36,000 companies that operate 48,000 properties, with combined annual revenue over $120 billion. Large US companies include Marriott International, Hilton Hotels, Carlson Hotels, and Starwood Hotels & Resorts. The industry is fragmented with the 50 largest companies controlling about 45 percent of the market. The majority of hotels are part of a chain. The average revenue per hotel is about $2 million.
This industry doesn't include casino hotels, bed-and-breakfast inns, youth hostels, housekeeping cabins and cottages, and tourist homes. Casino hotels are included in the "Gambling Operations" industry profile.
COMPETITIVE LANDSCAPE
Business and tourist travel drive demand. Both are affected by the strength of the economy. The profitability of individual companies depends on efficient operations, because many costs are fixed, and on effective marketing. Large companies have advantages in economies of scale in operations, can more easily raise capital, and have strong name recognition. Small companies, such as boutique hotels, can compete effectively in favorable locations and by providing specialty services. A hotel business requires large amounts of capital, but operations are labor-intensive: average annual revenue per employee is around $80,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major industry product lines are room fees and sales of food, alcoholic drinks, and merchandise. Room fees account for 70 percent of industry revenue, food for 15 percent, and alcohol for 5 percent.
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