Hospitality Real Estate Sector in the United States - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The hospitality real estate sector in the United States is an emerging market that holds a greater scope to grow owing to the factors like increasing travel interests among the people. The United States holds a high number of visitors from all over the world. Most popular cities in the United States hold high visitors rate, and the developed nation also holds a high number of business gatherings and meetings along with a high rate of travelers. The holiday season attracts a great number of visitors across the world. The increasing standards of living, stressful lifestyles, people affordability to spend on an international trip, the increasing number of smaller and nuclear families and the increasing number of working partners are a few factors that are encouraging international tourism. The number of high earning companies and firms who are interested to invest in the hospitality sector are increasing. Hotels and accommodation cover the major share in the hospitality real estate sector and are high revenue-generating across various segments. Changing preferences in travelers, the amount they are willing to spend on their holiday, the diversity they are expecting from their accommodation are a few factors that are driving the market. In order to capture the increasing demands, the government also simplifying the rules and regulations to construct or to renovate the existing hotels. Orlando, Florida recorded the highest visitor number (75 million visitors) in 2018, followed by New York City, New York, and Chicago, Illinois. Theme parks like Walt Disney World and Universal Studios made Orlando number 1 city, beating New York which is the capital for finance and other business-related industries. This itself explains that leisure travel is the most profitable market followed by business travel.

Key Market Trends

The Rising Number of Visitors To USA is Driving the Market

The United States has a growing number of visitors who come from all over the world. Around 76.9 million people visited the United States in 2017. The United States has the largest number of travelers who comes from Argentina, Brazil, Ireland, and South Korea. International spending also increased in 2017 along with the total number of visitors. Travelers expenditure was increased by 2 percent more than in 2016. Even though the number of individuals who likes to move into the United States is gradually decreasing owing to the stringent policies of the US government, the interest among the individuals to visit the US for a holiday still remains unchanged. The social networking sites and social media influencers are spreading enough awareness about the location by visiting or reviewing thus reinforcing interest in travel among the millennials, especially to the most popular sites and top destinations which is also creating great interest to visit that particular location. Around 64% of leisure travelers prefer to use online resources for their travel research and bookings, and platforms like Airbnb and other home-sharing platforms are gaining greater significance with the comforts they share like budget stay, etc. Travel has also become more affordable the US domestic airfares fell around 44 % (inflation-adjusted terms) from 1980 to 2016.

Growing Needs for Construction is Driving the Market

In order to accommodate the increasing number of visitors, the investors are grabbing the locations that have a high number of stays and longer stays when compared. Many multinational companies are preferring the United States for their business trips and consulting bodies for their business seminars. The investors are focusing more on those cities that the high number of business trips than leisure as they hold great scope for average occupancy rate and high revenue generated from those business trips. Los Angeles topped the list of construction projects in the pipeline followed by New York and Dallas. These projects have their expected openings in 2020-2025.

Competitive Landscape

The hospitality real estate sector in the United States is a competitive market with a large number of players who are already well established in the region, and many other regions of the world. Most of the players have been investing strategically in the accommodation segment in the United States, and the country is welcoming various investors all across the world. The high tourism rate is also helping the region to get more attention from various investors.

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