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A strong economy, rising global consumer purchasing power, and digital innovation have all fueled record growth in the travel and hospitality industry. The United States leads the world in international travel and tourism exports and ranks third in terms of total visitation.
The hospitality industry in the United States has been growing, with the rising number of international travelers visiting the country for leisure trips and with the rising business travel within the country. The international arrivals in the country has also increased in recent years. Cities, like New York, managed to record high numbers of both leisure travelers and business travellers.
The US has the highest contribution from the travel and tourism industry to its GDP, worldwide at $1.5 Trillion, accounting for almost 8% share.
Growth in digital innovation helped in recording this increasing number and it also helped the players who operate shared spaces, like Airbnb, to be able to reach out to their target audience.
The total expenditure of international travellers recorded an all-time high value. Gross hotel bookings recorded increasing numbers. All these growing numbers, together, inspired the Department of Commerce to target 95.5 million international visitor arrivals, annually, by 2023, which is twice the number it recorded in 2000.
But growth wasn’t limited to traditional players. It’s also been a remarkable decade for travel tech. Digital innovation helped form a lattice for entirely new segments to not only enter the market—but thrive. Some private accommodation and ride-hailing brands just finding their foot in 2009 already sit side by side with the dominant market players of travel and hospitality.
The hospitality industry in the United States always managed to score a growing number, over the past few years. Though the occupancy rates fluctuate from month to month, the overall revenue generated from the segment keeps increasing.
The region recorded USD 280 billion in terms of the revenue generated in 2018, which was almost double the revenue it generated in the early 2000s.Since 2000, the region has recorded positive growth in revenue.
Hotel Industry in the US is estimated at $XX Billion in 2020, growing at –% CAGR till 2025.
Travel to and within the United States grew by around 2.4% y/y in 2019, marking the industry’s 10th consecutive year of expansion. It is projected that overall U.S. travel volume will further grow at a steady rate in the upcoming years given the outbreak of the pandemic in the country.
Domestic travel was the bright spot for the travel and hospitality industry concluded in the third consecutive year of simultaneous expansions in both the domestic leisure and domestic business travel segments.
Domestic travel demand rose by 2.6% in December, fueled by increases in domestic leisure travel (2.8%) and business travel (2.0%). It is projected that overall domestic travel growth will expand in the forthcoming years and majorly contribute in the growth of revenues.
International inbound travel is expected to contract (-0.2%) over that same time period as a result of the continued strength of the U.S. dollar versus other key currencies and trade tensions. International inbound travel did expand slightly in December (0.8%)—only the second increase for the segment in the past seven months.
Airbnb has Changed the Face of the Hospitality Industry in the United States.
When it entered the hospitality industry in the United States in 2008, Airbnb was barely known to the general public. Yet, with its innovative space sharing idea and digitalization technique, it attracted the younger generation and reached a break-even point after a year from its inception. Currently, more than 60% of the accounts in Airbnb belong to millennials.
It succeeded in attracting a greater number of customers, through its pricing strategy. Airbnb offers shared spaces at fairly cheaper rates in the leading cities of the United States. There are spaces available for USD 14 per night, even in the prime cities of the world. According to recent statistics, Airbnb has approximately 150 million users and covers more than 65,000 cities in the world, with more than 5 million listings.
Outbreak of COVID 19
COVID-19 has been a challenge to both lives and livelihoods. The crisis is unprecedented and moving quickly, yet still deeply uncertain. Travel and tourism has been more severely damaged than any other U.S. industry by the economic fallout of the health crisis.
Given that travel employed one in 10 Americans and was the No. 2 U.S. export before the pandemic, supporting this industry through to the recovery phase ought to be a national priority.
That huge drop in foreign spending on travel in the United States is not surprising given the drastic reduction in both travel demand and, consequently, the number of flights available for international travel as nations sought to rein in travel as a way of fighting the pandemic’s spread.
The degree of difficulty for some international travelers to gain access to the USA due to visa restrictions will continue to be a challenge for markets that have historically benefited from significant overseas-based tourist demand.
The number of visitors (excluding students, medical tourists and migrant workers) to the United States from Canada and Mexico, will be down. Total foreign visitors to this country this year is also forecasted to fall further. Election-year uncertainty will also be a limiting factor for demand growth in 2020.
The continued launch of new brands and the saturation of brand parent companies in certain submarkets represent growing concerns, as the limited and available brand-loyal customer base is spread among more rooms.The concern of a forthcoming recession continues to loom.
Business travel demand has fallen more sharply than leisure travel demand owing to the work from home environment adapted by major companies and meetings and conferences shifting to digital platforms. Therefore, it is anticipated that recovery in this sector can be relied upon for domestic day trips and overnight stays representing a potential opportunity for the industry.
The hotel industry in US is dynamic. The region hosts a high number of brands with global footprints. Airbnb has been attracting a large consumer base and it recorded an increasing number of listings and bookings over the past few years. The entry of the concept of shared space has been giving a tough competition to the major players, over the past few years.
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