The travel accommodation market, valued at $797.70 billion in 2023, is estimated to reach $3.145 trillion by 2035, growing at a CAGR of 12.1 percent from 2024 to 2035, a report said.
Travel accommodation encompasses a wide range of accommodations, including hotels, motels, resorts, vacation rentals, hostels, bed and breakfasts, campsites, and other types of temporary lodging facilities.
The shift in consumer spending from products to experiences has surged demand in the travel accommodation market size. As consumers prioritise enriching experiences over material possessions, accommodation providers are increasingly offering unique and immersive stays, according to the Allied Market Research report.
From boutique hotels to themed accommodations, travellers seek lodging that goes beyond traditional amenities, providing authenticity and opportunities for meaningful engagement. This significance on experiential travel has stimulated innovation, with providers introducing curated experiences and cultural immersion activities. Consequently, the travel accommodation market experiences heightened demand as consumers seeks accommodations that enrich their travel experiences and create lasting memories, it said.
Fraud risk
However, the rise in fraudulence poses a significant restraint on market demand for the travel accommodation sector. Instances of fraudulent activities such as online scams, identity theft, and fake accommodations can ruin consumer trust and confidence in booking accommodations online. Travelers may become hesitant to make reservations through online platforms due to concerns about the legitimacy of listings and the security of their personal and financial information. This increase in fraudulence not only impacts the revenue of legitimate accommodation providers but also undermines the overall reputation and credibility of the travel accommodation market growth, leading to a decline in demand as consumers seek more secure booking alternatives.
Solo travel options
Furthermore, the rise in accommodations tailored for solo travellers is creating significant opportunities in the travel accommodation market. Recognising the growing trend of solo travel, accommodation providers are increasingly offering options specifically designed to cater to the needs and preferences of individual travellers. From single rooms in traditional hotels to co-living spaces, hostels with private pods, and boutique accommodations offering communal areas for socialising, these offerings provide solo travelers with comfort, safety, and opportunities for social interaction. This specialised focus not only taps into a rapidly increasing market segment but also enhances the overall travel experience for solo adventurers, driving demand and revenue growth in thetravel accommodation market share.
By product, the hotels segment dominated the global travel accommodation market in 2023 and is anticipated to maintain its dominance during the forecast period. Established brand recognition, extensive loyalty programs, and strong infrastructure give hotels a competitive edge. They offer a wide range of accommodation options, amenities, and services catering to diverse traveler segments. Hotels remain the preferred choice for business travelers, ensuring a steady travel accommodation market demand. Additionally, the industry’s resilience, adaptability, and continuous investments in innovation have enabled hotels to maintain their dominance despite the rise of alternative accommodation options like vacation rentals and home-sharing platforms.
By application, the leisure segment dominated the global travel accommodation market in 2023 and is anticipated to maintain its dominance during the forecast period. As per travel accommodation market analysis the disposable incomes and changing lifestyle preferences have led to a growing desire for recreational travel and vacations. Moreover, the rise of the experience economy, particularly among millennials and younger generations, has fueled the demand for leisure travel experiences. In addition, the promotion of tourism by governments and the accessibility of online booking platforms have made leisure travel more convenient and accessible, the report said.
By price point, the economy segment dominated the global travel accommodation market in 2023 and is anticipated to maintain its dominance during the forecast period. The sharing economy has given rise to alternative accommodation options like hostels, capsule hotels, and budget-friendly vacation rentals. These options often fall within the economy segment, catering to travelers seeking unique and cost-effective experiences.
By mode of booking, the online travel agencies segment dominated the global travel accommodation market in 2023 and is anticipated to maintain its dominance during the forecast period. Online travel agencies often offer exclusive discounts, package deals, and loyalty programs, making them an attractive choice for cost-conscious travelers seeking value for their money. User-friendly interfaces, mobile compatibility, and personalized recommendations further enhance the overall travel planning experience, contributing to the demand for online travel agencies.
Region-wise, North America is anticipated to dominate the market with the largest share during the forecast period. The trend of “staycations” and domestic travel within North America has gained popularity, contributing to the growth of the regional accommodation market. Furthermore, the region’s focus on innovation, digitalisation, and the adoption of new technologies in the travel and hospitality sector has given North American accommodation providers a competitive edge in meeting evolving consumer demands.
Maret key players
The major players operating in the global travel accommodation market are Marriott International, Hyatt Hotels Corporation, Wyndham Destinations, Hilton Worldwide Holdings Inc., Accor Hotels Group, Radisson Hotel Group, Airbnb Inc., A&O Hotels and Hostels GmbH, Red Lion Hotels Corporation, and Oyo Rooms.
