Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Key points
- Hotels struggle to perform in underperforming market
- Many drivers of lodging demand have turned sour
- Market dominated by six hotel groups
- Innovation and advertising
- Consumer hotel travel trends
- Revenue growth minimal once inflation is factored in
- Hotels compete with free and paid accommodations in an environment where market drivers are turning sour
- Top hotel groups expanding and innovating
- Leading 22 hotels spent $479 million on media
- Highlights from the consumer research
Insights and Opportunities
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- Convincing homebodies to travel
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- Figure 1: Reasons for not staying in a hotel/motel, by household income, June-July 2008
- Attracting non-guests to take advantage of hotel amenities
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- Figure 2: Hotel usage by non-guests, by amenity used, June-July 2008
- Blacks, Asians and Hispanics place greater value on hotel amenities and are willing to pay more for luxury or experience
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- Figure 3: Important hotel amenities, by race/Hispanic origin, June-July 2008
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- Figure 4: Perceptions about hotels, by race/Hispanic origin, June-July 2008
Fast Forward Trends
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- Trends: Brand Experience and I Travel Therefore I Am
- Understanding the trend: Brand Experience
- Understanding the trend: I Travel Therefore I Am
- The hotel brand experience
- Defining a hotel by its visitors, not the other way around
- Trend: Consistency
- What’s it all about?
- Consistency is key
- Customizable consistency
Market Size and Forecast
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- Key points
- Revenue growth, after adjusting for inflation, is stagnant
- U.S. economic performance will lower occupancy rates and hinder growth in ADR
- Luxury brands outperform the rest of the market in RevPAR
- Hotel and accommodations sales and forecast through 2013
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- Figure 5: U.S. hotels and accommodations revenue and forecast, at current prices, 2003-13
- Figure 6: U.S. hotels and accommodations revenue and forecast, at inflation-adjusted prices, 2003-13
Competitive Context
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- Many choose free or inexpensive overnight accommodations
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- Figure 7: Accommodations on last domestic trip for vacation or personal reasons, February 2007-March 2008
- A plethora of new brands
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- Figure 8: New hotel brands, March 2006-April 2008
- Previous experience matters
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- Figure 9: Importance of having stayed at a hotel before, by age, June-July 2008
- Room cost is an important factor in the booking decision
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- Figure 10: Importance of price in booking accommodations, by age, June-July 2008
Segment Performance
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- Key points
- Hotel/motels account for two thirds of category sales
- Revenue from ancillary hotel services (food, beverage, gaming) should slow as occupancy levels decline
- Consumers love to gamble
- Hotel and accommodation revenue segmentation, by type of hotel, revenue stream
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- Figure 11: Hotel and accommodation revenue, segmented by type of accommodation, 2006 and 2008
- Figure 12: Hotel and accommodation revenue, segmented by revenue stream, 2006 and 2008
Segment Performance—Hotels and Motels
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- Key points
- After steady revenue growth since 2004, times will be tougher ahead
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- Figure 13: Revenue from hotels & motels, at current prices, 2003-13
- Room rentals account for the majority of segment revenue
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- Figure 14: Hotels & motels revenue, segmented by revenue stream, 2006 and 2008
Segment Performance—Casino Hotels
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- Key points
- The casino hotel is a means to an end
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- Figure 15: Casino hotel revenue, segmented by revenue stream, 2006 and 2008
- Casino hotels looking to attract non-gambling guests
- Sales/forecast at casino hotels
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- Figure 16: Revenue from casino hotels, at current prices, 2003-13
Market Drivers
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- As goes the economy, so goes the hotel industry
- GDP
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- Figure 17: U.S. GDP 2000-07
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- Figure 18: U.S. GDP forecast—2007-18
- Fuel prices
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- Figure 19: U.S. Gasoline Prices (all grades), at inflation-adjusted prices, 2003-08
- Disposable personal income
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- Figure 20: Per capita disposable personal income, at current and chained 2000 dollars, 2000-08
- Cutbacks in airline capacity decrease hotel demand
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- Figure 21: Large airports with biggest capacity declines (overall seat reduction) November 2008 vs. November 2007
- Travel costs rising
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- Figure 22: Travel price index* and consumer price index*, 2002-11
- U.S. underperforming as an international travel destination
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- Figure 23: International and overseas* visitors to U.S., 2000-11
- Domestic travel is stagnant
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- Figure 24: U.S. resident travel volume 1997-2011
Leading Companies
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- Key points
- Top 10 hotel groups worldwide
- Hotel expansion continued globally in 2008 but at a slower rate than in 2007
- A 20% increase in supply planned by the top global hotel groups by 2015
- The 10 largest hotel groups worldwide
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- Figure 25: World Ranking—10 largest hotel groups by number of hotels, 2007 & 2008
- Figure 26: World Ranking—10 largest hotel groups by number of rooms, 2007 & 2008
- U.S. brand share
- Leading U.S. hotel groups added 66,000+ rooms, yet leading brands contracted
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- Figure 27: Number of rooms and brand share for top 50 hotels in the U.S., 2006 & 2007
Brand Qualities
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- Starwood Hotels & Resorts—Westin Brand
- Holiday Inn
- Hampton Inn
- Best Western
Innovation and Innovators
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- Creating new brands and boutique hotels to meet any need
- NYLO Hotels
- Edition
- Element
- In-room technology
- Hilton’s ‘Sight+Sound’ rooms
- Hyatt’s music offering
- Rodeway targets the value-conscious senior traveler
- Partnering to differentiate a brand or hotel experience
Advertising and Promotion
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- Key points
- Overview
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- Figure 28: Media expenditures for leading hotel brands, 2006-07
- Advertising themes
- Theme—Features
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- Figure 29: Television Spot, Holiday Inn “MBA Lecture—Guest Room Simulator,” June 2008
- Figure 30: Television Spot, Residence Inn “Women With Curtain And Apple,” November 2007
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- Figure 31: Television Spot, Econo Lodge “Princess & Frog,” July 2008
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- Figure 32: Television Spot, Days Inn “New Look & More Value/Happy Guests,” May 2008
- Theme—Locations
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- Figure 33: Television Spot, Crowne Plaza “The meeting of people with advice for phil,” July 2008
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- Figure 34: Television Spot, Super 8 “The number you can always count on,” June 2008
- Theme—The perfect getaway
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- Figure 35: Television Spot, Sandals “The time of our life,” June 2008
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- Figure 36: Television Spot, Wyndham “2 Out Of 5 Americans/4th Night Free Offer,” July 2008
- Figure 37: Television Spot, Hampton Hotels “With a Little Help from my friends, 2,” May 2008
- Theme—Promotions/Loyalty programs
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- Figure 38: Television Spot, Comfort Inn “Country Singer Lists Holiday Destinations,” May 2008
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- Figure 39: Television Spot, Hilton Hotels “No Blackout Dates For Hilton HHonors Members,” July 2008
- Figure 40: Television Spot, Sheraton “Rival Fans Getting Along,” January 2008
Usage
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- Key points
- The share of adults who stay in hotels has rebounded since 2001/2002
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- Figure 41: Incidence of hotel stays, by age, October 2000-March 2008
- Most hotel stays are for leisure purposes
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- Figure 42: Incidence of hotel stays for business or leisure travel, by age, June-July 2008
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- Figure 43: Incidence of hotel stays for business or leisure travel, by household income, June-July 2008
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- Figure 44: Incidence of hotel stays for business or leisure travel, by race/Hispanic origin, June-July 2008
- Adults spend 5+ nights in domestic hotels; $100K+ households, 6.3 nights
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- Figure 45: Mean nights spent in hotels, by leisure or business, by key demographics, February 2007-March 2008
- Adults who have not stayed in a hotel either do not travel or choose to stay with friends/family
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- Figure 46: Reasons for not staying in a hotel/motel, by age, June-July 2008
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- Figure 47: Reasons for not staying in a hotel/motel, by household income, June-July 2008
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- Figure 48: Reasons for not staying in a hotel/motel, by race/Hispanic origin, June-July 2008
Accommodation Options and Preferences
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- Key points
- Among overnight travelers, paid accommodations and staying with friends and family are the predominant accommodation choices
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- Figure 49: Accommodations on last domestic trip, February 2007-March 2008
- Budget hotels most popular paid accommodation, but price is not the primary driver
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- Figure 50: Paid accommodation preferences, by household income, June-July 2008
Brand Preferences
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- Leading hotel brand preferences span economy to ‘upper upscale’ chains
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- Figure 51: Hotel brands stayed at for any domestic travel (business or leisure), February 2007-March 2008
- In the fragmented leisure market, midscale and economy hotels more often selected
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- Figure 52: Hotel brands stayed at for domestic leisure travel, February 2007-March 2008
- The leading business hotels are ‘upper upscale’ brands
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- Figure 53: Hotel brands stayed at for domestic business travel, February 2007-March 2008
Enrollment in Frequent Guest Programs
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- Only one in five adults who stay in hotels are loyalty program members
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- Figure 54: Enrollment in frequent guest programs, by key demographics, February 2007-March 2008
Methods for Finding/Researching Hotels
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- A previous stay influences the future choice of hotel
- Online sites are a significant source of information
- Information sources used
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- Figure 55: Information sources used to find a hotel, by age, June-July 2008
- Race/Hispanic origin and hotel research sources
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- Figure 56: Information sources used to find a hotel, by race/Hispanic origin, June-July 2008
Booking Methods
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- Leisure travelers book rooms directly with the hotel
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- Figure 57: Booking methods, by age, June-July 2008
Desired Hotel Amenities
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- Free parking, flexible check-in/out, and nearby restaurants are the most important amenities for leisure guests
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- Figure 58: Importance of hotel amenities, by household income, June-July 2008
- Asian, Hispanic and black respondents consider more amenities important to their hotel decision than whites
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- Figure 59: Importance of hotel amenities, by race/Hispanic origin, June-July 2008
Perceptions About Hotels
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- Most adults view hotels as a base from which to explore nearby attractions
- Price is a “main concern” of eight in 10 adults when booking accommodations
- Hotels are an important component of the “holiday experience” yet, for many, they just represent a place to sleep
- Hotel perceptions by age, income and race/Hispanic origin
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- Figure 60: Perceptions about hotels, by age, June-July 2008
- Figure 61: Perceptions about hotels, by household income, June-July 2008
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- Figure 62: Perceptions about hotels, by race/Hispanic origin, June-July 2008
Hotel Usage by Non-guests
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- Two thirds of adults do not visit a hotel to take advantage of its offerings when not visiting as a guest
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- Figure 63: Hotel usage by non-guests, by age, June-July 2008
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- Figure 64: Hotel usage by non-guests, by household income, June-July 2008
Cluster Analysis—Bare Bones, Standard, Four-stars
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- Insights
- Bare bones guests
- Understanding bare bones guests
- Standard room lodgers
- Understanding standard room lodgers
- Four-stars
- Understanding four-stars
- Cluster characteristics
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- Figure 65: Hotel clusters, June-July 2008
- Figure 66: Types of hotels stayed in, by clusters, June-July 2008
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- Figure 67: Importance ratings, by clusters, August 2008
- Figure 68: Hotel research, by clusters, August 2008
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- Figure 69: Hotel attitudes, by clusters, August 2008
- Figure 70: Non-guest hotel usage, by clusters, August 2008
- Cluster demographics
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- Figure 71: Clusters by Gender, August 2008
- Figure 72: Clusters by age, August 2008
- Figure 73: Clusters by Income Group, August 2008
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- Figure 74: Clusters by race/Hispanic origin, August 2008
- Methodology
Custom Consumer Groups—A Closer Look at Moms
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- Accommodation preferences
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- Figure 75: Paid accommodation preferences, moms compared to females without children, June-July 2008
- Desired hotel amenities
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- Figure 76: Importance of hotel amenities, Moms compared to Females without children, June-July 2008
- Methods for finding/researching hotels
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- Figure 77: Information sources used to find a hotel, Moms compared to Females without children, June-July 2008
- Perceptions about hotels
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- Figure 78: Perceptions about hotels, Moms compared to Females without children, June-July 2008
- Hotel usage by non-guests
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- Figure 79: Hotel amenity usage by non-guests, Moms compared to Females without children, June-July 2008
Appendix: Other Useful Consumer Tables
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- Types of hotels used by leisure travelers
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- Figure 80: Types of hotels used by leisure travelers, by age, June-July 2008
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- Figure 81: Types of hotels used by leisure travelers, by race/Hispanic origin, June-July 2008
- For foreign leisure travel, hotels face competition from non-hotel options
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- Figure 82: Accommodations on last foreign leisure trip, by key demographics, February 2007-March 2008
- Foreign travel—leisure v. business
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- Figure 83: Accommodations on last foreign trip, by business or leisure, February 2007-March 2008
- Hotel research and booking
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- Figure 84: Information sources used to find a hotel, by household income, June-July 2008
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- Figure 85: Booking methods, by household income, June-July 2008
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- Figure 86: Booking methods, by race/Hispanic origin, June-July 2008
- Unimportant hotel amenities, by age, income and race/Hispanic origin
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- Figure 87: Less important hotel amenities, by age, June-July 2008
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- Figure 88: Less important hotel amenities, by household income, June-July 2008
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- Figure 89: Less important hotel amenities, by race/Hispanic origin, June-July 2008
- Hotel usage by non-guests
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- Figure 90: Hotel amenity usage by non-guests, by race/Hispanic origin, June-July 2008
Appendix: Trade Associations
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