The hotel industry has shown consistent growth over the past few years with over 700,000 hotels worldwide which are contributing over $3.41 trillion to the global economy. As more people have begun to see travel as an integral part of their lives, both leisure and business travel spending have experienced a year-over-year growth over the past 5 years. The market size of the hotel and resort sector worldwide was worth $1.21 trillion in 2019 and is forecasted to reach $1.22 trillion in 2021, as reported by Statista.
Growth in the Luxury Hotel Industry
Within this industry, the luxury hotel market in the US is estimated to be worth $47.3 billion as of 2020. The top spot in the industry is held by Marriott International, Inc. (NASDAQ: MAR) which generated more sales revenue than any other hotel group in the world in 2019. With over 1.3 million guestrooms worldwide, the hotel chain had a revenue of $21 billion. In terms of the number of properties, the Wyndham Hotels & Resorts, Inc. (NYSE: WH) had over 900 properties globally. Another notable name in the luxury hotel industry is Hilton Hotels & Resorts, owned by Hilton Worldwide Holdings Inc. (NYSE: HLT) which had a global brand value of $10.83 billion in 2020. Other major luxury hotel brands in the US include Hyatt Hotels Corporation (NYSE: H), Holiday Inn, and Las Vegas Sands Corp. (NYSE: LVS).
Some noteworthy geographic markets for luxury hotels are in China, Canada, and Europe. It is projected by Research and Markets that the hotel market size in China alone will reach $42.1 billion by the year 2027 trailing at a CAGR of 4.9%. The Japanese market is expected to grow at 0.6% while the Canadian market will grow at 1.9% till 2027. Within Europe, Germany is forecasted to grow at approximately 1.2% CAGR. There is no doubt that the demand for luxury hotels is booming throughout the years as disposable income is rising and low-cost airline services are becoming more available. The popularity of weekend culture along with the booming services sector around the world have made the travel industry worth around 10% of the world’s GDP.
Effects of COVID-19 Pandemic on Luxury Hotels
However, the tables were turned when the COVID-19 pandemic hit the world which led to a crash in the global hospitality sector. As governments and public authorities are acting to contain the pandemic, hotels, restaurants, casinos, resorts, and most entertainment venues remain empty. Many hotels in the US were also closed as occupancy rates fell drastically. McKinsey & Company report that the occupancy rate was below 15% for luxury hotels amid the pandemic and will have the slowest return to pre-pandemic levels compared to economy hotels. This is because economy hotels are better able to tap segments of demand that remain relatively healthy despite travel restrictions, including truck drivers and extended-stay guests. Not only in the US, but luxury hotels worldwide are experiencing the same fate. The occupancy rate at Peninsula Hotels dropped to 14% in 2020 compared to 70% in the previous year.
According to StockApps.com, the total market cap of Marriott, Wyndham Hotels, Choice Hotels International, Inc. (NYSE: CHH), Hilton, and InterContinental Hotels Group PLC (NYSE: IHG), the best luxury hotels in the world, had a $25.2 billion plunge in revenues in 2020. The 2nd quarter revenue per available room for Hilton Hotels fell by 81% in 2020 relative to the same period a year ago. The company experienced a net loss of $430 million.
Efforts to Bring Back Customers
Moreover, the COVID-19 crisis also significantly changed the travel behaviors of people around the world, particularly in terms of the level of comfort when staying in a hotel. According to an industry report by Mordor Intelligence, 60% of their survey respondents wanted an increased frequency of cleaning and disinfecting procedures in hotels while 9% of respondents were in favor of suspending all hotel services. Moreover, people are preferring the hotels which have digitized their services such as allowing online bookings through websites and apps. To mitigate the impact of COVID-19 on their business, many hotels have moved swiftly to incorporate such policies within their companies. Luxury hotels are preferring to drive direct bookings on their own hotel brand sites. For example, Hilton launched a campaign to provide contactless services to their customers by including phone check-ins, contactless payments, voice control, and biometrics. Consumers who have become accustomed to unlocking their smartphones and laptops using facial and fingerprint recognition will do the same while accessing their hotel rooms.
The best luxury hotels in the world are ensuring that consumers feel safe while travelling and are on track to bounce back as travel restrictions are being eased around the world.
Here is a list of the 15 best luxury hotel companies in the world.
Best Luxury Hotels in the World
Revenue: $117.3 million in 2020 via Hotel News Source
Belmond is a luxury hotel and leisure company that manages a collection of 49 iconic hotels, trains, and river cruises in 24 countries. With timeless hotels in Venice, Rio, and St. Petersburgh, the company has established itself as one of the best luxury hotel companies in the world. Its flagship hotel is the Belmond Hotel Cipriani, located in Venice, Italy. The demand for Belmond began growing in the fourth quarter of 2020, specially for its most secluded retreats. So far, the pace of bookings is up by 20% for the year 2021.
14. Mandarin Oriental International Limited (OTC: MAORF)
Revenue: $183 million in 2020 via Yahoo Finance
The Mandarin Oriental has grown from a reputable Asian hotel company into a global brand in the past 50 years. It opened up its flagship property called The Mandarin in Hong Kong in 1963. The Mandarin is the tallest building on the island and quickly became one of the best luxury hotels in the world. It was also given the status of a historic landmark. Today, the group is firmly established as a truly global luxury player and operates more than 30 hotels worldwide, with each property featuring a distinctive oriental design which reflects its heritage and a unique sense of place.
13. Choice Hotels International, Inc. (NYSE: CHH)
Revenue: $774 million in 2020 via Yahoo Finance
Choice Hotels is a leading hotel franchisor with more than 7,100 locations and more than 590,000 rooms throughout the US and more than 40 other countries. It also operates extended stay hotels such as MainStay Suites and WoodSpring Suites. Based in Maryland, Choice Hotels was the first industry chain to establish a “soft brand” called the Ascend Hotel Collection. The Ascend Hotel Collection includes upscale boutique and historic hotels that offer a luxurious experience to travelers. The company has a strong presence in Australia, France, Germany, Mexico, UK, and India. Comfort is Choice Hotels’ largest brand. Positioned as a midscale limited-service brand, Comfort is designed to offer consistent, high-value accommodations for both leisure and business travelers.
12. Park Hotels & Resorts Inc. (NYSE: PK)
Revenue: $852 million in 2020 via Yahoo Finance
Park Hotels & Resorts is a real estate investment trust that focuses on luxury hotel properties. Based in Virginia, the company has a partial ownership of 60 hotels. The company caters to the luxury and upper upscale segments of the hotel industry. Its properties operate under internationally recognized brand names such as Hilton, Hyatt, Marriott, Hampton Inn. The company’s valuation is $9.46 billion. Their flagship brand is the Grand Park which represents luxury and excellence with its sophisticated designs and elevated finishes. The Grand Park provides quality services such as fine dining gourmet restaurants and intimate meeting spaces to cater to business and leisure travelers.
11. Wyndham Hotels & Resorts, Inc. (NYSE: WH)
Revenue: $1.3 billion in 2020 via Yahoo Finance
Wyndham Hotels & Resorts is one of the largest hotel companies in the world with a valuation of $9.09 billion. Its portfolio consists of approximately 230 luxury vacation resorts offered under the names Club Wyndham, Margaritaville Vacation Club, WorldMark, Presidential Reserve by Wyndham. The company also manages over 4,200 affiliated vacation exchange and rental properties through Resort Condominiums International (RCI). The hotel giant has a presence in over 110 countries but 85% of its revenue is generated from within the US. The company provides both high-end lodging options as well as budget-friendly rooms to cater to both business and leisure travelers. The Alexander Hotel in Indianapolis is a 4-star hotel which was ranked at the top of the best hotels by Wyndham in the US by TripAdvisor.
10. Host Hotels & Resorts, Inc. (NASDAQ: HST)
Revenue: $1.6 billion in 2020 via Yahoo Finance
Host Hotels & Resorts is a Maryland-based hotel company with a diverse portfolio of luxury and upscale hotels. Most of its properties are located in the US but it also has some hotels in Canada and Brazil. It is an S&P 500 company and is the largest lodging real estate investment trust. The company currently owns 74 properties in the United States and five properties internationally totaling approximately 46,100 rooms. The total company valuation stands at $16.08 billion as of 2020. Marriott and Host Hotels & Resorts, Inc. have unveiled a multi-million-dollar renovation of the brand’s flagship New York Marriott Marquis in Times Square. At the heart of the extensive renovation is the brand’s reinvented lobby, including two signature restaurants and lounges, where guests can work, socialize, relax, eat, and drink. The hotel has nearly 2,000 guest rooms and a new, high tech 29,000 square foot Broadway Ballroom.
9. Burj Al Arab
Revenue: $2 billion in 2020 via Owler
The Burj Al Arab is a luxury hotel located in Dubai, UAE. It is managed by the Jumeirah hotel group. The hotel is one of the tallest buildings in the world and it stands on an artificial island a few feet away from Jumeirah Beach. The shape of the hotel is designed to resemble the sail of a ship. Despite its size, the Burj Al Arab holds only 28 double-story floors which accommodate 202 bedroom suites. Its highest official ranking is a five-star hotel; however, it has been referred to as a 7-star hotel by many reporters. According to the CEO of the Jumeirah Group, the Burj Al Arab is one of the most profitable hotels in the worlds. It was named the Best Luxury Hotel in the World by The Telegraph’s ULTRA Awards.
8. Hyatt Hotels Corporation (NYSE: H)
Revenue: $2.06 billion in 2020 via Yahoo Finance
The Hyatt Hotels Corporation is a Chicago-based multinational hospitality company that operates in the US and internationally. The company develops, owns, operates, manages, franchises, leases, licenses, and provide services to a portfolio of properties, consisting of full-service hotels, select service hotels, resorts, and other properties. It operates its properties under the Park Hyatt, Miraval, Grand Hyatt. The Grand Hyatt Hong Kong is a luxury Hyatt hotel in Hong Kong, and the Asian flagship of Hyatt International. As of 2020, the company’s portfolio consists of 1000 hotels and has a market valuation of $9.86 billion. Among its portfolio, the Grand Hyatt are large luxury hotels which offer fine dining and expensive meeting facilities while the Park Hyatt offers a more residential style luxury. Even after the impact of COVID-19 where occupancy rates fell to 22%, Hyatt Hotels are on their way to recovery reaching almost 50% in February of 2021.
7. InterContinental Hotels Group PLC (NYSE: IHG)
Revenue: $2.39 billion in 2020 via Yahoo Finance
InterContinental Hotels Group which is known as IHG hotels & resorts, is a British multinational hospitality company based in Denham, Buckinghamshire, England. IHG has become a leader in luxury hotels with over 5070 hotels in about 100 countries worldwide. They operate 11 brands including the Crowne Plaza, Holiday Inn, Hotel Indigo, and HUALUXE. As of 2019, the Hotel Group had 842,759 guest rooms. Due to COVID-19 restrictions, IHG booked an annual loss of $153 million in 2020 as occupancy rate dropped to 46%. However, its Holiday Inn Express brand had a faster recovery and outperformed in key markets. As Britain has eased travel restrictions, the shares of the company were up by 3.8% in April 2021. IHG had last year acquired mainstream luxury brand Regent, which it plans to bring to India along with boutique luxury brands Six Senses and Kimpton.
6. Las Vegas Sands Corp. (NYSE: LVS)
Revenue: $3.6 billion in 2020 via Yahoo Finance
Las Vegas Sands Corp. owns, develops, and operates luxury hotels and resorts in the US and Asia. It owns the Venetian Macao Resort Hotel, the Londoner Macao, The Parisian Macao, The Plaza Macao, Four Seasons Hotel Macao, and Marina Bay Sands in Singapore. Its hotels and integrated resorts feature luxury accommodations, entertainment, retail malls, celebrity chef restaurants, convention and exhibition facilities. More than 70% of Sands’ revenue comes from its casino operations, while its hotel rooms bring in nearly 15% of revenue. The hotel giant has a market valuation of $46.41 billion as of 2020. Sands is set to spend around $2 billion on renovating its Macau properties while $3.3 billion is being allocated to the expansion of the popular tourist attraction the Marina Bay Sands hotel.
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Disclosure: None. 15 Best Luxury Hotels in the World is originally published on Insider Monkey.