An Overview of The Hotel industry – It’s definition, Segments, Types & Aspects

The hotel industry is a major part of the hospitality industry. In this post, we have covered this industry in general.  We have provided an overview of the Hotel industry in this post.

This post makes an effort to quickly define the hotel industry, discuss the evolution of this special industry and then cover its major segments, types and aspects.

This article ensures not to go into deeper details to keep this post short and informative.

So, all the hoteliers and the travel enthusiasts out there, let’s begin the fun with this interesting take on the hotel industry in totality.  It is indeed interesting on how the hotel industry has evolved from small Inns to the multi-million dollar business of today.

Related Article- Ancient Hospitality Customs that are still Awe-inspiring


Global Hotel Industry Revenue and Statistics


The travel and tourism market is flooded with millions of new customers from all parts of the world; many of whom have access to disposable income and are willing to spend it exploring the world.

If we cover only the Hotel Industry, the Hotel Industry Market statistics according to Statista and Deloitte are stacked as given below:

  1. Total retail value of the global hotel industry has crossed USD 500 Billion in 2018.
  2. Total revenue of the hotel industry in the USA alone touched $200 Billion in 2018
  3. Millennial is set to become the biggest consumer sectarian in the coming years.
  4. Travel and tourism industry is now over 10% worth of the Global GDP and the Hotel Industry accounts for half of that if clubbed with the Food & Beverage industry and alternate lodging.
  5. Hotel Industry alone is expected to sustain by growing at 6-7% in 2019 and beyond

The Hotel industry over the years has witnessed tremendous growth.

Thanks to the large numbers of huge multi-billion companies that are opening their headquarters in various locations globally, the number of business travellers are expected to continue rising.

As companies in the hotel industry also focus on improving the customer experience, individual travel is also slated to be on the rise.

Moreover, the demand for luxurious travel will also help to boost the hotel industry’s growth in the next years to come.

So, in a nutshell, the hotel industry is set to keep growing at a rapid pace in the years to come.


Hotel Industry Analysis and Market Statistics


So, here is a quick overview of the revenue this special industry generates. For a detailed report, please visit the Global Report Section HospitalityNet.




The amount depicted above is in Billions.


          The Global Hotel Industry revenue in 2016 stands approximately at a staggering value of $550 Bn and it has seen an increase in 2017, 2018 and 2019. 


And, we have not included travel and tourism which heavily depend on this industry.

So, discussing this special industry is certainly not a waste of time. Isn’t it?

For those who would love to see more numbers about the Hotel industry can visit our blog post on Hotel Industry Analysis and statistics.


Hotel Industry Segments – An Overview


In order to define the Hotel properly, we must also know the various segments of the Hotel industry.

Let’s talk about the segments of the Hotel industry now. Various segments of the industry are as follows:

There are 5 Major Sectors of the Hospitality industry which we have covered in another post on this Hospitality Portal.

The hotel industry is one industry which has a clear overlap with most of these sectors of the Hospitality industry.

The sectors discussed in the earlier post were:

  1. Lodging- Accommodation
  2. Food & Beverage
  3. Travel and Tourism
  4. Entertainment – Casino, Cruise, Gaming
  5. Timeshare

The Hotel industry looks like a conglomerate of all these sectors.

In this post, we have covered more about the uniqueness and vastness of the Hotel industry.

Also covered in this post are the major segments of the hotel industry, aspects of the hotel industry and unique points that make the Hotel industry quasi Hospitality industry.

While we could have made this an epic post worth thousands of words, we have ensured that we make it a bullet list with links to detailed posts on each individual points.

So, whether you want to skim these points or do an in-depth study, you are going to find this article interesting.

So, let’s begin with one simple question. ‘What is a Hotel?’

Who doesn’t know that? Isn’t it?


It is an establishment that provides accommodation, meals and other services to travellers and tourists. Well, that’s what the Wikipedia says.


But, is it all that it takes to define a hotel?

Well, there is always a yes and a no.

If you search ‘Definition of Hotel Industry’ on Google, you get the results for the ‘Hospitality industry’ instead as shown in the search image below.


Overview of the Hotel Industry



So, even Google finds it difficult to differentiate between the Hospitality industry and its integral part, ‘The Hotel Industry’.

There must be something more to the definition that can help Google show better results in the future.

We can add commercial, customer service and price to this definition and of-course hospitality.


But, here is another question.


Why fret so much over the complete overview of the Hotel industry? Is the Hotel industry that important?



Hotel Industry Segments


When we discuss the hotel industry overview, it is equally important to discuss it’s segments which are listed below.

  1. Full-Service Hotels – These include the Resort hotels and 4* and 5* hotels.
  2. Select Service Hotels – These include several 3* and 4* hotels, Bread & Breakfasts, Inns, Airport Hotels etc.
  3. Limited Service Hotels – These include Hostels, Capsule hotels. Motels, 1* and 2* Hotels etc.
  4. Boutique and Themed Hotels- These include Boutique Hotels, Cruise Hotels, Theme Park Hotels, Casino hotels etc.

So, we have defined a few segments to get to a clear definition of the Hotel. But, while exploring the segments we have noticed that there are several hotel types within each segment.

So, it’s also worthwhile to quickly mention the various hotel types. Isn’t it?


Different Types of Hotels


There are numerous types of hotels in the world. You would be amazed by the variety that this industry provides to all the travellers. Have a look!

  1. Boutique Hotels
  2. Resorts
  3. Casino Hotels
  4. Cruise (Hotels) – Hotels and accommodation on Cruise Ships
  5. Motels
  6. Bed & Breakfasts
  7. All Suite Hotels
  8. Condo Hotels
  9. Airport Hotels
  10. Business Hotels
  11. Extended Stay Hotels
  12. Luxury Hotels
  13. Apartment Hotels
  14. Hostels
  15. Various Star Hotels (5 Star to 1 Star)
  16. Inns
  17. Tree House Hotels
  18. Ice Hotels
  19. Capsule Hotels
  20. Serviced Apartments

And the list goes on and on.

The expanse of the Hotel industry is limitless.


A Hotel when defined as an established providing paid lodging and boarding services to travellers, does only half justice to the essence of the hotel industry.

While the above definition is good for a hostel but this definition would infuriate the passionate boutique hoteliers or hotel entrepreneurs who believe hotels are more about hospitality & service than it’s about lodging and food.

Well, we will have to agree. We pay more for the ambience at times than for the food.


Finally, to have an all-round overview of the Hotel industry, it is also important to have a look at the various aspects that make the hotel industry.


Overview of the Hotel Industry. Segments, Types and Aspects of Hotel industry


Various Aspects of the Hotel industry


The hotel industry size is large to include broad categories within the industry that each has unique characteristics.

Regardless of the sector, one thing is clear; customer service remains to this day the backbone of the entire hospitality industry.

All the important segments of the hotel industry such as food delivery and care are also driven primarily by customer support.

Careers in the hotel industry can be extremely rewarding, however, they are also challenging and fast-paced, which can be overwhelming for most people.

This industry is a lot broader than other industries, and it is related to nearly every other profession on earth.

While this industry is very broadly classified, it has some defining aspects that are very important.


Customer Service holds the Key


As mentioned earlier, the most vital aspect of the hotel industry revolves around customer satisfaction.

Related Article- Customer Service in the Hospitality Industry

While customer satisfaction is important for any successful business, the success of the hospitality industry relies solely on whether the customer is happy or not.

In this age of the Internet, where social media platforms are king, an unhappy customer can be the source of an unnecessary headache.

To prevent bad reviews, which are the death of every business, the hotel industry must do everything to ensure satisfaction.


Healthy Consumer spending


As the economy continues to get stronger and stronger, individuals are also starting to enjoy increased salaries that are enabling them to make wise spending decisions.

The hotel industry is one sector that is benefiting heavily since it is at the heart of the growth.

According to The Caterer, Consumer spending in the Hotel industry saw close to a 5% rise in 2017 even in quarters which proved difficult for other industries.



Competition within the Airline sector


Air travel has become cheaper thanks to competing airlines which has enabled a lot more individuals to travel to various destinations across the world.

International competition, low fuel prices and low-cost entrants in the airline industry will only help to make flights more accessible even to the budget traveller.

The number of international tourist according to the CNN International traveler report 2015 rose to 1.2 Billion in 2015 and is still growing at a rapid pace in 2019 and beyond..

Check out the below image for the trend over the past two decades as far as international travellers are concerned. A big plus for the Hotel industry.



Advancement in Technology


Advances in technology have completely reshaped the way that the hotel industry operates.

Thus it is a must to include in a holistic analysis of the hotel industry.

Thanks to social platforms, people are now more informed than ever about the places that they want to visit, as well as how they want to get there and where they want to stay.

Apart from making it easier for the customer, technology has increased the efficiency of the hotel industry and it has helped greatly to improve the customer experience.

Quality customer experience is gold and it is what will help to drive business activity in the hotel industry.

We have covered a lot of Information technology in the Hotel Industry in our earlier posts. AI in the Hotel industry is another interesting area that already has a mention on this portal among the top Hospitality technology trends.


Reliance on Disposable income and time


Another vital aspect that defines the hotel and the hospitality industry is the reliance on other people’s disposable income and free time.

Because of this, a lot of businesses in the hotel industry, whether they have to do with accommodation or transport, are targeted towards people that have extra income to spare, rich patrons or people that have free time for rest and relaxation.

During economic downtimes such as the recession, the hotel industry typically suffers because patrons are forced to redirect their income to other central issues.


Themes are a key aspect of the Hotel industry


Lastly, the hotel industry is also characterised by themes.

Many hotels, especially the smaller variety opt to stick to a theme that can help to attract customers.



Image Courtesy- Themed Hotel Suites by CNBC

For instance, a hotel can have a Mediterranean theme as a way of appealing to customers that prefer that type of food.

Not only do different and unique themes help to attract more business, but they also help to set one business apart from another.

For a business to be successful in the hotel industry, it must have an authentic theme.




Hope you found the overview of the hotel industry interesting and informative.

Hotel’s definition is indeed complicated. The range is huge and it is extremely difficult to provide a complete hotel industry definition.

We have tried to complete the Hotel definition by adding a few tenets to the definition by Wikipedia. But, even this doesn’t cover everything of the industry. So, it is these Hotels or establishments and people working or attached to these establishments constitute the hotel industry.


                “Hotels are establishments of various types, classifications and themes providing hospitality services (both paid and unpaid) to travellers and tourists, that include but are not limited to accommodation and meals.”


Hope this quick yet comprehensive hotel industry overview article kept you engrossed for a while.

Keep on exploring more on the hotel industry and the hospitality industry on a whole through hundreds of articles on this portal.