Development of U.S. Lodging Industry and Its Implication/DEVELOPPEMENT DE L'INDUSTRIE DE LOGEMENT DES ETAT-UNIS ET SON IMPLICATION

By Jinzhao, Wang | Canadian Social Science, January 1, 2007 | Go to article overview

Development of U.S. Lodging Industry and Its Implication/DEVELOPPEMENT DE L'INDUSTRIE DE LOGEMENT DES ETAT-UNIS ET SON IMPLICATION


Jinzhao, Wang, Canadian Social Science


Abstract:

This article reviews the development of U.S. lodging industry and its implications, it shows the high degree of concentration in some aspects related to development of U.S. lodging industry such as market size, major players, and customer types.. And then further analyses the factors and its implications that influencing the lodging industry of US, it mainly was studied from the aspects of economic, social and technological sides. Finally forecasts the key trends of the lodging industry.

Key words: Development, Influence Factor, Issue, Trend

Résumé: Cet article passe en revue le développement de l'industrie de logement des Etat-Unis et son implication. Cette rétrospective montre la concentration de haut niveau sous certains aspects relatifs au développement de cette industrie tels que la dimension du marché, les acteurs principaux et les types des clients. Et puis l'article analyse les facteurs et ses implications qui influent l'industrie de logement des Etat-Unis dans les perspectives économique, sociale et technologique. Finalement, l'auteur prévoit les tendances importantes de l'industrie.

Mots-Clés: développement, facteurs influants, problème, tendance

1. DEVELOPMENT OF U.S. LODGING INDUSTRY

The perfect storm of 9/11, SAR, Iraq, and weak business travel demand had a devastating impact on lodging industry performance from 2001-2003, but a long recovery is taking shape and pricing power is on the mend. Industry occupancy rates have rebounded above 60%, while revenue per available room (RevPAR) has recovery from its recent slide, particularly in the volatile top end of the market. In 2004, the hotel industry appeared to have finally turned the corner. Overall profitability for the lodging industry grossed $113.7 billion, an increase of approximately $8 billion from 2003. Pretax profits rose from $12.8 billion in 2003 to $16.7 billion in 2004.

Room sales accounted for roughly 54% of revenues in 2004, lodging industry has become more consolidated over time due to acquisition and internal growth. However, no single lodging company encompasses hotel (including franchises) that account for more than 15% of all hotel rooms in the United States. Based on affiliated rooms worldwide, the largest U.S. based company is franchisor Cendant, the parent of nine lodging chain with more than 6,500 properties and about 530,000 rooms. Cendant's lodging brands include DaysInn, Howard Johnson, Knights Inn, Ramada(United States), Super 8, and Travelodge. Demand for hotel rooms comes from both US residents and international travelers. In 2004, there was a 13 percent rise in the number of overseas visitors to the US, including a percent increase in arrivals from western Europe and an 18 rise from Japan. (Industry Survey 2005)

1.1 Market Size

In 2006, U.S. hotels were able to turn a healthy 8.8 percent rise in total revenue into an impressive 15.5 percent increase in profits according to the recently released 2006 edition of Trends in the hotel industry published by PKF Hospitality Research. The tremendous increase will be contributed to the strong economy. Hotels have been beneficiaries of strong increase in demand that have resulted in tremendous gain in revenue. PKF-HR breaks down their survey sample into five property categories: full-service, limited-services, convention, all-suite, and resort. Among the different property categories, limited-service hotels achieved the greatest increase in revenue (10.3%), while full-services hotels achieved the greatest increase in profitability (19.3%). While convention hotels lagged the other property types somewhat in terms of revenue and profit growth, the 7.8 percent gain ? revenues and 12.2 percent increase in profits.

1.2 Major Players in U.S. Lodging Industry

The US hotel market increased by 6.5% since 2003 to reach a value of US$75.1 billion in 2004. It can be illustrated by following figures. Hotel chains were the largest sector, accounting for 71% of the sales in 2004, worth US$53. …

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