Global Hotel Franchise Market Overview
As per MRFR analysis, the Hotel Franchise Market Size was estimated at 55.05 (USD Billion) in 2022.
The Hotel Franchise Market industry is expected to grow from 57.58(USD Billion) in 2023 to 86.3 (USD Billion) by 2032. The Hotel Franchise Market CAGR (growth rate) is expected to be around 4.6% during the forecast period (2024 - 2032).
Key Hotel Franchise Market Trends Highlighted
The Hotel Franchise Market exhibits remarkable growth, driven by factors such as increased global travel, economic recovery, and the expansion of leisure and business activities. With travelers seeking familiar and trusted brands, franchising enables rapid hotel chain expansion and brand recognition. Moreover, the rise of online booking platforms and loyalty programs has fueled market growth, providing convenience and incentives for customers.
Opportunities in the hotel franchise market lie in catering to niche segments, such as extended-stay hotels, budget-friendly options, and eco-friendly properties. The industry is also adapting to changing guest preferences, incorporating amenities like contactless check-in, mobile room keys, and personalized experiences. Trends in recent times include the emergence of lifestyle brands, the growth of mixed-use properties, and the integration of technology to enhance guest experiences. As the market continues to evolve, hotel franchise companies are exploring innovative strategies to capitalize on these opportunities and drive future growth.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Hotel Franchise Market Drivers
Rising Demand for Branded Hotel Experiences
Many factors explain the growth of the Hotel Franchise Market, one of the most notable being the increasing popularity of branded hotel experiences. Nowadays, travelers are more likely to opt for a hotel brand they know, trust, and have experience with than choosing a new, lesser-known one. The reason is that well-established and hotel brands are known for their high standards of quality and service. This tendency of consumer behavior can be frequently observed in emerging markets, where consumers tend to become wealthier and more prosperous but at the same time seek to experience the novelty that international hotel brands can bring them.Hence, in response to growing consumer demand, hotel franchisors are expanding in emerging markets. For example, in 2023, Marriott International announced that they would open 100 new hotels in India over the next five years. This development allows the franchisor to increase its presence in India and benefit from the growing popularity of the branded hotel experience in the country. Overall, the increasing demand for branded hotel experiences is one of the factors that explain the growth of the Hotel Franchise Market.
Expansion of the Global Tourism Industry
One of the key drivers is the development of the global tourism industry. The trend is that more people travel for leisure and business, and, thus, to cater to their needs, more hotels are necessary. Not only developed countries demonstrate the growth of this sector, but also some developing countries on different continents. For instance, one of the tourism markets’ most advantageous and swiftly expanding is the Asia-Pacific. According to the World Travel Tourism Council, the spending of tourists in the Asia-Pacific is expected to grow by 5.8% every year over the upcoming ten years.Hence, this trend is a key driver of the expansion of the hotel franchise market.
Technological Advancements
Technological advancements are also driving the growth of the hotel franchise market. Hotel franchise companies are increasingly using technology to improve their operations and to provide a better experience for their guests. For instance, many hotel franchise companies are now using online booking systems that allow guests to book rooms directly from the hotel's website. These systems make it easier for guests to book rooms and can help to increase hotel occupancy rates.Additionally, hotel franchise companies are using technology to improve their guest services. For instance, some hotel franchise companies are now using mobile apps that allow guests to check in to their rooms, order room service, and make other requests. These apps can help to improve the guest experience and can lead to increased customer satisfaction. Overall, technological advancements are a key driver of the growth of the hotel franchise market.
Hotel Franchise Market Segment Insights
Hotel Franchise Market Franchise Type Insights
The Hotel Franchise Market segmentation by Franchise Type into 'Conversion Franchise' and 'New Build Franchise' provides valuable insights into the industry's dynamics. 'Conversion Franchise' involves converting an existing hotel into a franchised brand, often leveraging the hotel's established infrastructure and customer base. This segment accounted for USD 26.7 billion in 2023 and is projected to reach USD 39.2 billion by 2032, exhibiting a CAGR of 4.2%. Its growth is attributed to the reduced costs and risks associated with converting an existing property compared to constructing a new one.In contrast, 'New Build Franchise' involves constructing a new hotel under a franchise agreement, allowing the franchisee to benefit from the brand's reputation and established operating systems. This segment held a larger market share, valued at USD 30.8 billion in 2023, and is anticipated to reach USD 47.1 billion by 2032, growing at a CAGR of 4.9%. Its growth is driven by the increasing demand for branded hotels in emerging markets and the desire for standardized quality and service levels. The choice between 'Conversion Franchise' and 'New Build Franchise' depends on various factors, including investment capital, risk tolerance, and market conditions.Conversion franchises are often preferred by investors with limited capital or those seeking a quicker return on investment, while new build franchises offer greater control over design and amenities and can benefit from the latest industry trends.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Hotel Franchise Market Accommodation Type Insights
The Hotel Franchise Market is segmented by accommodation type into limited service hotels, full service hotels, luxury hotels, boutique hotels, and extended stay hotels. Limited service hotels are the most common type of hotel franchise, accounting for over 60% of the global market. These hotels typically offer a limited range of amenities and services, such as free Wi-Fi, breakfast, and a fitness center. Full service hotels offer a wider range of amenities and services, such as room service, a pool, and a restaurant. Luxury hotels offer the highest level of amenities and services, such as a spa, a concierge, and a fine dining restaurant.Boutique hotels are smaller, more intimate hotels that typically offer a unique experience, such as a themed decor or a focus on local culture. Extended stay hotels are designed for guests who are staying for a longer period of time, and they typically offer amenities such as a kitchen, a laundry room, and a business center.
Hotel Franchise Market Target Market Insights
The target market for the Hotel Franchise Market is diverse, encompassing various types of travelers with unique needs and preferences. Business travelers constitute a significant segment, accounting for approximately 40% of the overall hotel franchise market revenue in 2023. These travelers prioritize convenience, efficiency, and access to business amenities such as Wi-Fi, meeting rooms, and business centers. Leisure travelers, on the other hand, seek relaxation, entertainment, and memorable experiences. They represent around 30% of the market share and are drawn to hotels that offer amenities like spas, swimming pools, and fitness centers.Families, couples, and millennials are also notable target segments. Families seek spacious accommodations, kid-friendly amenities, and family-oriented activities, while couples prioritize romantic ambiance, privacy, and special packages. Millennials, known for their tech-savviness and experience-driven mindset, are attracted to hotels that offer innovative features, social media integration, and eco-friendly practices. By understanding the specific needs and preferences of these target groups, hotel franchise businesses can tailor their offerings and marketing strategies to drive growth and customer satisfaction.
Hotel Franchise Market Franchising Model Insights
The franchising model segment plays a crucial role in shaping the Hotel Franchise Market. It encompasses three primary models: Single-Unit Franchise, Multi-Unit Franchise, and Area Development Franchise. Each model caters to specific needs and offers varying degrees of control and support to franchisees. Single-Unit Franchise: This model involves granting a franchise to an individual or entity to operate a single hotel unit. It is suitable for entrepreneurs seeking to own and manage their own business while leveraging the brand recognition and support of an established franchisor.In 2024, the Single-Unit Franchise segment is estimated to account for around 42% of the Hotel Franchise Market revenue. Multi-Unit Franchise: This model allows a franchisee to operate multiple hotel units under the same brand. It is ideal for investors or experienced operators who seek to expand their portfolio and benefit from economies of scale. In 2025, the Multi-Unit Franchise segment is projected to reach a valuation of $27.5 billion, driven by growing demand for branded and standardized hotel experiences. Area Development Franchise: This model grants a franchisee the exclusive rights to develop and operate hotels within a specific geographic territory.It is often adopted by regional developers or investors seeking to establish a strong presence in a particular market. The Area Development Franchise segment is expected to witness significant growth in the coming years, particularly in emerging markets, as investors capitalize on the increasing demand for branded hotels in these regions.
Hotel Franchise Market Regional Insights
The regional segmentation of the Hotel Franchise Market includes North America, Europe, APAC, South America, and MEA. North America is the largest market, accounting for over 35% of the global revenue in 2023. This is due to the presence of major hotel chains and a large number of business and leisure travelers. Europe is the second largest market, with a share of over 25%. The APAC region is expected to grow at the fastest rate over the forecast period, owing to the rising disposable income and increasing tourism in countries like China and India.South America and MEA are relatively smaller markets, but they are expected to grow at a steady pace in the coming years. The growth in these regions is attributed to the increasing number of hotel chains entering these markets and the growing popularity of hotel franchises among local investors.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Hotel Franchise Market Key Players And Competitive Insights
Major players in Hotel Franchise Market are constantly seeking opportunities to expand their global presence and strengthen their market position. Leading Hotel Franchise Market players are focusing on strategic partnerships, acquisitions, and mergers to gain a competitive edge. Innovation and technological advancements are also key drivers of Hotel Franchise Market development, as companies invest in developing new products and services to meet the evolving needs of customers. The Hotel Franchise Market Competitive Landscape is expected to remain highly competitive in the coming years, with the entry of new players and the increasing consolidation of the market.
Marriott International is a leading player in the Hotel Franchise Market, with a strong global presence and a diverse portfolio of brands. The company has been focused on expanding its reach in emerging markets, such as China and India, and has also been actively pursuing acquisitions to strengthen its portfolio. Marriott International is known for its strong brand reputation, loyalty programs, and extensive distribution network.Hilton Worldwide is another major player in the Hotel Franchise Market, with a significant presence in the Americas, Europe, and Asia-Pacific regions. The company has been focused on growing its portfolio through organic expansion and acquisitions, and has also been investing in renovation and refurbishment of its properties. Hilton Worldwide is known for its strong brand recognition, global reach, and customer-centric approach.
Key Companies in the Hotel Franchise Market Include
- Rosewood Hotels Resorts
- Hyatt Hotels Corporation
- Kempinski Hotels
- The RitzCarlton Hotel Company
- Choice Hotels International, Inc.
- Accor SA
- ShangriLa Hotels and Resorts
- IHG Hotels Resorts
- Best Western Hotels Resorts
- Langham Hospitality Group
- Hilton Worldwide Holdings Inc.
- Wyndham Hotels Resorts
- Jin Jiang International Hotels
- Marriott International, Inc.
- Mandarin Oriental Hotel Group
Hotel Franchise Market Developments
The Hotel Franchise Market is projected to reach a value of USD 86.3 billion by 2032, exhibiting a CAGR of 4.6% during the forecast period (2024-2032). The growth of the market is attributed to the increasing demand for branded hotels, the expansion of the tourism industry, and the growing popularity of franchising as a business model.Recent news developments in the market include the acquisition of Extended Stay America by Blackstone Group for $6 billion, the launch of a new hotel franchise brand by Marriott International called Moxy, and the announcement of a partnership between Hilton and Airbnb to offer vacation rentals on Hilton's website. These developments indicate the continued growth and consolidation of the hotel franchise market.
Hotel Franchise Market Segmentation Insights
- Hotel Franchise Market Franchise Type Outlook
- Conversion Franchise
- New Build Franchise
- Hotel Franchise Market Accommodation Type Outlook
- Limited Service Hotels
- Full Service Hotels
- Luxury Hotels
- Boutique Hotels
- Extended Stay Hotels
- Hotel Franchise Market Target Market Outlook
- Business Travelers
- Leisure Travelers
- Families
- Couples
- Millennials
- Hotel Franchise Market Franchising Model Outlook
- Single-Unit Franchise
- Multi-Unit Franchise
- Area Development Franchise
| Report Attribute/Metric |
Details |
| Market Size 2022 |
55.05(USD Billion) |
| Market Size 2023 |
57.58(USD Billion) |
| Market Size 2032 |
86.3(USD Billion) |
| Compound Annual Growth Rate (CAGR) |
4.6% (2024 - 2032) |
| Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year |
2023 |
| Market Forecast Period |
2024 - 2032 |
| Historical Data |
2019 - 2023 |
| Market Forecast Units |
USD Billion |
| Key Companies Profiled |
Rosewood Hotels Resorts ,Hyatt Hotels Corporation ,Kempinski Hotels ,The RitzCarlton Hotel Company ,Choice Hotels International, Inc. ,Accor SA ,ShangriLa Hotels and Resorts ,IHG Hotels Resorts ,Best Western Hotels Resorts ,Langham Hospitality Group ,Hilton Worldwide Holdings Inc. ,Wyndham Hotels Resorts ,Jin Jiang International Hotels ,Marriott International, Inc. ,Mandarin Oriental Hotel Group |
| Segments Covered |
Franchise Type ,Accommodation Type ,Target Market ,Franchising Model ,Regional |
| Key Market Opportunities |
Expanding demand for budgetfriendly accommodations Growth in international travel Increasing popularity of branded hotel experiences Rise of digital booking platforms Emergence of hybrid hotel concepts |
| Key Market Dynamics |
Increased brand recognition access to capital and operational support |
| Countries Covered |
North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Hotel Franchise Market was valued at 57.58 Billion USD in 2023 and is expected to reach 86.3 Billion USD by 2032, exhibiting a CAGR of 4.6% during the forecast period.
The growth of the Hotel Franchise Market is primarily attributed to increasing travel and tourism activities, rising disposable income, and the expansion of the hospitality industry. Additionally, factors such as the growing popularity of online booking platforms, the increasing demand for branded hotel experiences, and the expansion of hotel chains into emerging markets are contributing to the market growth.
North America is expected to dominate the Hotel Franchise Market throughout the forecast period due to the presence of a large number of established hotel chains, a well-developed tourism infrastructure, and a strong economic environment. However, the Asia-Pacific region is anticipated to witness the highest growth rate during the forecast period owing to the rapidly growing hospitality industry and increasing disposable income in countries such as China and India.
Some of the key players in the Hotel Franchise Market include Marriott International, Inc., Hilton Worldwide Holdings Inc., InterContinental Hotels Group PLC, Hyatt Hotels Corporation, Accor SA, Wyndham Hotels Resorts, Inc., Choice Hotels International, Inc., Best Western Hotels Resorts, and Jin Jiang International Hotels.
Hotel franchising is primarily used by hotel owners to gain access to established brand names, operational expertise, and marketing support. It enables them to benefit from the reputation and recognition of well-known hotel chains while maintaining some level of independence in managing their properties.
The Hotel Franchise Market faces several challenges, including the impact of economic downturns on travel and tourism, intense competition from independent hotels and alternative accommodation providers, the rising cost of construction and labor, and the increasing regulatory requirements in the hospitality industry.
Growth opportunities in the Hotel Franchise Market lie in expanding into emerging markets, developing innovative hotel concepts, leveraging technology to enhance guest experiences, focusing on sustainability, and targeting niche market segments such as wellness and experiential travel.
When choosing a Hotel Franchise, key factors to consider include the brand reputation, the franchise fees and royalties, the level of support provided by the franchisor, the marketing and reservation systems, the training and development programs, and the franchisee's own financial capabilities and business goals.
The future outlook for the Hotel Franchise Market is positive. The industry is expected to continue growing steadily, driven by increasing travel and tourism, rising disposable income, and the expansion of the hospitality sector. Innovation, technology adoption, and a focus on sustainability will shape the market's future growth.
