As businesses, hotels take on different models and strategies for bringing in revenue.
Some charge astronomical rates for a true luxury experience — the top suite at Dubai's famed Burj Al Arab can sometimes rent for $28,000 a night while a Vegas hotel once specifically designed a $150,000-a-night experience for 12 people to enjoy three suites with everything from a basketball court to private masseuses — others take the "Ikea model" and rake in profits by low prices that appeal to the masses.
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According to the annual Allianz Partners Big Book of Travel Data report, Hampton by Hilton (HLT) -) brought in more room revenue than any other hotel chain in the world — the $10.2 billion brought in by the budget to midrange hotel chain outpaced the $9.3 billion brought in by Hilton's more upscale Hilton Hotels & Resorts and $8.8 million from Marriott International (MAR) -).
The numbers refer solely to gross room revenue, or what the chain gains rom the rental of the rooms themselves — the information is not publicly disclosed but Allianz Group (ALIZF) -) and IdeaWorksCompany calculated it based on average room revenue (RevPAR) and global room count statistics.
Image source: Hilton Hotels
'What began as a new idea in the hospitality industry...'
"While we don't disclose specific revenue figures, we're extremely proud of the strong market position Hampton has attained as shown by its global growth, guest satisfaction and innovation," a Hilton spokesperson told travel website the Points Guy. "What began as a new idea in the hospitality industry nearly 40 years ago remains as innovative today as ever due to Hampton's consistency, strong service culture, and signature Hamptonality."
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Fellow mid-range chains Holiday Inn Express and Courtyard by Marriott rounded out the top five on the list with a respective $8.5 billion and $7.1 billion in revenue. In total, the room revenue generated from the world's nine biggest hospitality brands generated $80.06 billion in 2022.
This is a significant spike from the $53.29 billion seen in 2021 as more people started traveling post-pandemic.
Don't expect hotel prices to go down (but there is some good news)
Considering the rising cost of hotel stays, it is not a surprise that most people are searching for an affordable alternative. One estimation found that the average hotel stay soared by 226% in New York, 200% in Chicago and a respective 196% and 189% in Miami and Boston between 2019 and 2022.
While prices have since been evening out amid cooling inflation, demand for travel remains high as many take trips put off by the pandemic and any improvements will likely come in the form of what we're currently seeing freezing rather a true decrease.
At the annual Americas Lodging Investment Summit in Los Angeles at the start of the year, Marriott CEO Anthony Capuano said that the hotel chain was "not seeing" any of the "discussion of head winds [and] all the debate about the recessionary environment."
Numbers shown from the conference predicted the average hotel rate in the U.S. to increase by 2% by the end of 2023 instead of the 19% seen in between 2021 and 2022. As a result, affordable options remain ever-appealing to those who still want to travel.
