The Industry Recovery
The U.S. hotel industry has rebounded after the 2008 economic recession. In 2008, the occupancy rate of the hotel industry fell to 59.8% and fell again in 2009 to 54.6%. However, in the intervening years, as the economy rebounded, so too did the hotel industry occupancy rate, which rose to 66.2% in 2018.[i]
This increase in occupancy equates to big money. From a low of $133.3 billion dollars in 2009, the revenue of the U.S. hotel industry rose to $208 billion in 2017.[ii] On a more micro scale, it equates to about a $30-dollar revenue increase per available room. In 2009, the average revenue per available room in the U.S. was $53.57. By 2018 that per-room revenue increased to $85.96.[iii]
A Crowded Field
According to the American Hotel & Lodging Association, there are 54,200 hotels in the United States, with over 5 million available rooms. Chain hotels and resorts collectively make up the largest share of America’s hotels. When looking at the number of properties, as of June 2019 the Wyndham Hotel Group came in at number one with 7,063 properties in the U.S. Choice Hotels International came in second with 6,332 U.S. hotels, and Marriot International came in third with 5,420 hotels.[iv]
However, if you look at the number of guest rooms that the leading chain hotels have available, that paints a different picture. As of June 2019, Marriott International took the number one spot for the number of guest rooms available in the U.S., coming in at 945,161. Hilton Worldwide took the second spot, with 736,419 available rooms, and Wyndham Hotels & Resorts was third with 573,823 available rooms in the U.S.[v]
And the number of hotels in the U.S. is increasing. In January 2019 there were 5,519 hotels in the development pipeline in the U.S.[vi]
Creating Customer Loyalty
So, what does that mean for hotel owners? It means that hotels are competing in a larger and larger playing field. In order to compete, hotel owners are needing to up their game when it comes to providing amenities that travelers like and need in order to make their stay more comfortable, including spa facilities, an in-house ATM, and close proximity to local attractions. Among millennial travelers in 2018 the most desired hotel amenities were free wi-fi (51% of respondents), a swimming pool (33%), and all-inclusive packages (28%).[vii]
However, hotels can also get in trouble for nickel and diming for these upgraded amenities. According to hotelnewsresource.com, “Hotels that charge resort fees – daily charges for using the hotel’s facilities – are facing public backlash, as the government pushes for more rate transparency. Operators leveraging these fees to drive profit margins will have to think more creatively for other sources of revenue.”
If travelers are pushing back against resort fees, then hotels need to think outside the box to increase their revenue while still providing top-tier services. One simple way hotels and resorts have found to do this is to add an in-house ATM to their hotel.
Cash Matters
Travelers always need cash for tipping, for public transportation, and a myriad of other expenditures. In 2017, there were 134.8 million international tourist arrivals in North America.[viii] Long gone are the days of traveling with traveler’s checks that are then exchanged into the local currency. These days travelers bring debit and credit cards and withdraw cash from a local ATM once they arrive at their destination. The best hotel ATMs not only provide travelers with easy access to cash, they also increase the hotel’s revenue through transaction fees.
And when customers have cash, they spend it. In 2017, travelers spent $36.1 billion dollars on food and drinks in hotel restaurants.[ix] In 2014, travelers spent $4.93 billion on alcoholic beverages purchased in hotels while traveling away from home.[x]
By adding desirable – and revenue increasing – amenities to their facilities, hotels are able to stand out in a crowded and ever-changing field.
Sources:
[i] hotelnewsnow.com. (January 18, 2019). Hotel occupancy rate of the United States from 2001 to 2018 [Graph]. In Statista. Retrieved October 04, 2019
[ii] hotelnewsnow.com. (June 8, 2018). Revenue of the United States hotel industry from 2001 to 2017 (in billion U.S. dollars) [Graph]. In Statista. Retrieved October 04, 2019
[iii] hotelnewsnow.com. (January 18, 2019). Average revenue per available room of the United States hotel industry from 2001 to 2018 (in U.S. dollars) [Graph]. In Statista. Retrieved October 04, 2019
[iv] Hotel Management. (September 16, 2019). Leading hotel companies in the Americas as of June 2019, by number of properties [Graph]. In Statista. Retrieved October 04, 2019
[v] Hotel Management. (September 16, 2019). Leading hotel companies in the Americas as of June 2019, by number of guestrooms [Graph]. In Statista. Retrieved October 04, 2019,
[vi] hotelnewsnow.com. (February 12, 2019). Monthly number of hotels in the development pipeline in the United States from 2012 to 2019* [Graph]. In Statista. Retrieved October 07, 2019
[vii] Resonance Consultancy. (January 4, 2018). Millennial travelers, from the United States, most desired hotel amenities as of January 2018* [Graph]. In Statista. Retrieved October 07, 2019
[viii] UNWTO. (August 27, 2018). Number of international tourist arrivals worldwide from 2005 to 2017, by region (in millions) [Graph]. In Statista. Retrieved October 07, 2019
[ix] RKMA. (October 12, 2017). Food and drink sales of hotel restaurants in the United States from 2009 to 2017 (in billion U.S. dollars) [Graph]. In Statista. Retrieved October 07, 2019
[x] US Department of Agriculture. (January 26, 2016). Annual expenditure of alcoholic beverages purchased away from home in the United States from 2010 to 2014, by distribution channel (in billion U.S. dollars) [Graph]. In Statista. Retrieved October 07, 2019
