Hotel Franchise Market Size - By Chain Value (Luxury, Upper-upscale, Upscale, Upper-midscale, Midscale, Economy), By Hotel Type (Extended Stay, Residence, Select Service), Growth Prospects, Regional Outlook & Forecast, 2024 – 2032

Hotel Franchise Market Size

Hotel Franchise Market size was valued at USD 36.7 billion in 2023 and is estimated to register a CAGR of over 7.5% between 2024 and 2032, due to the rise in demand for unique and localized experiences. With changing traveler preferences, several hotel franchises are exploring boutique and lifestyle concepts to cater to guests seeking more personalized and distinctive stays. The strong focus on local culture, community engagement, and authentic experiences is also playing a significant role in shaping the industry growth.
 

The emerging trend of sustainability is further compelling an increasing number of franchises to adopt eco-friendly practices, such as waste reduction initiatives, energy-efficient technologies, and environmentally friendly materials. To cite an instance, in April 2023, Marriott International reiterated its commitment to achieving sustainability certification for all its hotels as well as green building certifications for its 650 properties by 2025. This growing consumer preference for hotels committed to sustainable and responsible business practices will significantly contribute to the market growth.
 

The surge in the hotel franchise market is notably influenced by the expansion and diversification of luxury hotel offerings. A growing consumer appetite for premium travel experiences has propelled major players in the industry, such as Marriott, Hilton, and AccorHotels, to intensify their focus on luxury hotel franchises. This trend is not only reflective of an increasing demand for opulent accommodations but also underscores the strategic importance of catering to high-end clientele.
 

The rising emphasis on digital marketing strategies for accelerating direct bookings while reducing reliance on Online Travel Agencies (OTAs) for cost savings for hotel franchises will play a key role in the market expansion. Hotels are increasingly offering incentives, such as discounts, room upgrades, and loyalty program benefits, further motivating guests to choose the hotel's official channels over third-party platforms. However, intense competition from new market entrants and the shifting consumer preference for alternative accommodations like vacation rentals may limit the industry growth to some extent.
 

Hotel Franchise Market Trends

The escalating technology adoption for streamlining operations, enhancing guest experiences, and optimizing bookings is another emerging trend driving the market growth. Franchise hotels are increasingly deploying contactless check-in and check-out processes to allow guests to use mobile apps for keyless entry and transactions. The integration of smart room technology is urging guests to control various aspects of their room, such as lighting, temperature, and entertainment, through mobile apps and in-room devices.
 

The influx of AI-powered chatbots and virtual assistants is also automating customer service in handling inquiries, providing information about the hotel, and assisting with bookings. To cite an instance, in April 2023, Hilton deployed a new cloud-based hotel technology platform, Property Engagement Platform (PEP) for streamlining operations and addressing guest and team member needs.
 

Hotel Franchise Market Analysis

Based on chain value, the midscale segment dominated around USD 10 billion revenue in 2023, owing to rising preference for midscale hotels among a broad range of travelers, including budget-conscious individuals and families as they offer a balance between reasonable pricing and adequate amenities. In addition to providing comfortable stay with essential amenities, such as free Wi-Fi, breakfast, and parking, midscale hotels render good value for money for upscale accommodation. The surge in the number of leisure travelers and the subsequent need to cater to families seeking spacious rooms and family-friendly amenities will boost the segment growth.
 

Based on the hotel type, the extended stay segment held over 45% of the hotel franchise market share in 2023, due to growing suitability for professionals, such as consultants, contractors, and project-based workers. The rise of remote work and flexible work arrangements is driving the need for long-term business travel and accommodations to cater to individuals staying for extended periods. The rising instances of relocations requiring temporary housing solutions and the jump in corporate training programs and professional development initiatives will also augment the preference for extended-stay hotels.
 

North America hotel franchise market accounted for 35% of the revenue share in 2023, led by the growing penchant for alternative accommodation models, extended-stay options in the region. With growing emphasis on eco-friendly practices and sustainability, multiple hotel franchises are adopting green initiatives to reduce environmental impacts. The growing pool of health-conscious travelers is also leading to the higher integration of wellness and lifestyle amenities, such as gyms, spas, and healthy dining options in hotel franchises.
 

To illustrate, in October 2022, a popular at-home exercise equipment maker Peloton Interactive Inc. partnered with Hilton to feature its bikes across latter’s U.S. portfolio. The surging popularity of boutique and lifestyle hotel concepts to offer unique and localized experiences will also influence the market growth across North America.
 

Hotel Franchise Market Share

Marriott and Hilton hold a major market share of over 15% in the hotel franchise industry. Leading companies operating in the hotel franchise industry are constantly engaging in various growth-based strategies, including partnerships, investments initiatives and acquisitions to reinforce their market footprint. For instance, Accor, a major international hospitality group managing a variety of hotel brands in different segments, is developing a unique know-how in boosting hotel performance while vigorously working on accelerating its sustainable growth.
 

These industry giants are increasingly focusing on offering diverse brand portfolios, catering to various market segments ranging from luxury to budget accommodations. Marriott, for instance, has been actively promoting its Bonvoy loyalty program, providing guests with personalized experiences and exclusive perks, while Hilton has emphasized sustainability initiatives to align with the growing eco-consciousness of travelers.
 

Hotel Franchise Market Companies

Major companies operating in the hotel franchise industry are:

• Hilton
• Hyatt
• IHG
• Marriott
• Radisson
• Red Roof Inn
• Richmond
• Wyndham
   

Hotel Franchise Industry News

• In November 2023, Accor Pacific announced its partnership with 120 hotels across a diverse portfolio of apartments, hotels, and resorts, marking a significant milestone in the success of its franchise hotel operations in New Zealand and Australia.
   
• In October 2023, Hilton disclosed plans to expand its franchise model in the category of upscale full services in Greater China through the inclusion of its DoubleTree by Hilton brand.
   

The hotel franchise market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:

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Market, By Chain Value

• Luxury
• Upper-upscale
• Upscale
• Upper- midscale
• Midscale
• Economy

Market, By Hotel Type

• Extended stay
• Residence
• Select service
• Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Nordics
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA