Hotels - US - August 2004

SUMMARY

Overall travel is back on the rise as the industry recovers from terrorismand recession, with 2004 travel spending expected to exceed that of the year2000. This return to growth is a welcome boon for the hotels market.

In Mintel's exclusive research, more than 50% of respondents stayed in ahotel or motel on their last trip. However, the majority of travelers will onlystay in a hotel when lodging with friends or family is not available. Mid-pricebrands such as Best Western or Holiday Inn are the most popular, with over 50%of respondents having stayed in such accommodations in the past 12 months.

Online travel booking continues to grow in popularity, with sales expected toincrease more than 20% in 2004. Mintel's exclusive research indicates that themost popular method used by respondents to book hotel rooms is throughthird-party Internet sites such as Travelocity (49%), while calling the hoteldirectly (44%) and using the hotel's website (40%) fall closely behind. Thepopularity of online booking creates mixed results for the hotel industry, asmore rooms are booked but at lower prices.

While Mintel expects business travel to increase 4.6% in 2004, growth will belimited by cutbacks in corporate spending and increased use ofvideo-conferencing and other technology. Business travel is especially importantto the hotel industry due to corporate customers paying higher rates than mostleisure travelers, and brining in large groups for conferences and meetings. Inaddition, almost 25% of business travelers stayed more than 11 nights in a hotelduring the past year, while that number is only 14% for all travelers.

Forecasts for overall travel spending are positive, with 5% to 6% growth perannum expected from 2004 to 2006. As hotel accommodations are a significantcomponent of overall travel spending, this increase will greatly benefit thehotel industry.

For the purposes of this report, a hotel is defined as a collectiveaccommodation establishment, providing lodging and usually meals, entertainmentand various personal services for the public. Motels, once considered a separatecategory, are now included in hotel figures, moving away from the concept of"motor hotels," where travelers parked outside their room doors. Todaymotels are considered hotels with limited services and amenities, therebyoffering lower prices than full service hotels.

Bed and breakfasts, campgrounds and inns are not included in this report.

TABLE OF CONTENTS

INTRODUCTION AND ABBREVIATIONS

• Introduction
• Other relevant reports
• Definition
• Abbreviations & Terms
• Abbreviations
• Terms

EXECUTIVE SUMMARY

• Travel patterns
• Shifting demographics and income
• Sales and segments
• Supply structure
• Advertising and promotion
• Direct to hotels remain primary mode of booking
• Consumer attitudes and behavior
• Choice of hotel
• Market to continue rebound

MARKET DRIVERS

• Overall travel patterns
• Figure 1: Domestic travel expenditures in the U.S., at current and constantprices, 1999-2004
• Graph 1: Domestic travel expenditures in the U.S., at current and constantprices, 1999-2004
• Domestic, inbound and outbound travel activities
• Figure 2: Number of domestic, inbound and outbound travel person trips,1999-2004
• Figure 3: Average value of selected foreign currencies against the U.SDollar, 2001-04
• Shifting demographics
• Figure 4: American population projections, by age, 1998-2008
• Disposable income
• Figure 5: Per capita PDI, in current dollars, 1998-2003
• Amount spent on domestic travel
• Figure 6: Amount spent in total, last domestic trip, 2000/01-2002/03
• Business vs. Vacation travelers
• Figure 7: Number of domestic business and leisure trips, 1999-2005
• Convenience and cost savings of online hotel booking
• Figure 8: Total U.S. online sales of leisure travel, at current and constantprices, 1999-2004
• Graph 2: Total U.S. online sales of leisure travel, at current, 1999-2004
• Figure 9: Online travel arrangement booking frequency, August 2003

MARKET SIZE & TRENDS

• Sales revenue
• Figure 10: Total U.S. retail sales of hotel accommodations, at current andconstant prices, 1999-2004
• Graph 3: Total U.S. retail sales of hotel accommodations, at current andconstant prices, 1999-2004
• RevPAR
• Figure 11: Hotel occupancy and revenue, 2000-04

MARKET SEGMENTATION

• Introduction
• Rate structure
• Figure 12: Hotels, by rate structures, 2001 and 2003
• Location of hotel
• Figure 13: Hotels, by location, 2001 and 2003
• Number of rooms
• Figure 14: Hotels, by number of rooms, 2001 and 2003

SUPPLY STRUCTURE

OVERVIEW

• Companies and brands
• Figure 15: International hotel revenue for top seven hoteliers, 2002 and2004
• Figure 16: Number of North American hotel rooms for top seven ranked hotelgroups in the U.S., 2003

SUPPLIER PROFILES

• Marriott International
• Cendant Corporation
• Choice Hotels International
• InterContinental Hotels Group (formerly Six Continents)
• Hilton Hotels Corporation
• Best Western International

ADVERTISING & PROMOTION

• Introduction
• Marriott International
• Cendant Corporation
• Choice Hotels International
• InterContinental Hotels Grou
• Hilton Hotels Corporation
• Best Western International
• Accor North America

RETAIL DISTRIBUTION

INTRODUCTION

• Figure 17: U.S. sales of hotels, by channel, 2001 and 2003
• Graph 4: U.S. sales of hotels, by channel, 2003

HOTEL COMPANIES

TRAVEL AGENCIES

• American Express
• Carlson Wagonlit Travel, Inc.
• Navigant International
• WorldTravel BTI

INTERNET TRAVEL AGENCIES/CONSOLIDATORS

• Figure 18: Revenues for top Internet-based travel sites, 2001 and 2003
• IAC/InterActiveCorporation
• Expedia, Inc.
• Travelocity
• Priceline.com Incorporated
• Cheap Tickets
• Orbitz

THE CONSUMER

• Introduction
• Where travelers stay
• Figure 19: Accommodation on last domestic trip, January-September 2003
• Figure 20: Accommodation on last domestic trip, by gender, January-September2003
• Figure 21: Accommodation on last domestic trip, by age, January-September2003
• Figure 22: Accommodation on last domestic trip, by respondent income,January-September 2003
• Figure 23: Accommodation on last domestic trip, by race/ethnicity,January-September 2003
• Figure 24: Accommodation on last trip, by marital status, January-September2003
• Figure 25: Accommodation on last trip, by region of residence,January-September 2003
• Summary
• Incidence of hotel stays
• Figure 26: Incidence of any hotel stays for personal/vacation travel in thelast 12 months, January-September 2003
• Number of nights in a hotel
• Figure 27: Hotel nights for personal/vacation travel in the last 12 months,January-September 2003
• Hotel stays for business travel
• Figure 28: Hotel nights for business travel in the last 12 months,January-September 2003
• Hotel type choices
• Figure 29: Hotel brands stayed in for vacation/personal reasons in the last12 months, January-September 2003
• Summary
• Methods of booking
• Figure 30: Method of booking hotel room, June 2004
• Figure 31: Method of booking hotel room, by gender, June 2004
• Figure 32: Method of booking hotel room, by age, June 2004
• Figure 33: Method of booking hotel room, by household income, June 2004
• Figure 34: Method of booking hotel room, by level of educational attainment,June 2004
• Figure 35: Method of booking hotel room, by presence of children in thehome, June 2004
• Figure 36: Method of booking hotel room, by region, June 2004
• Figure 37: Method of booking last hotel room, by locality of respondent,June 2004
• Summary
• Incidence of flight and hotel bookings
• Figure 38: Flight and hotel bookings, June 2004
• Figure 39: Flight and hotel bookings, by gender, June 2004
• Figure 40: Flight and hotel bookings, by age, June 2004
• Figure 41: Flight and hotel bookings, by household income, June 2004
• Figure 42: Flight and hotel bookings, by marital status, June 2004
• Figure 43: Flight and hotel bookings, by region of residence, June 2004
• Figure 44: Flight and hotel bookings, by locality of respondent, June 2004
• Summary
• Consumer attitudes towards hotel amenities, location and rates
• Figure 45: Attitudes towards hotel amenities and pricing, June 2004
• Figure 46: Attitudes towards hotel amenities and pricing, by gender, June2004
• Figure 47: Attitudes towards hotel amenities and pricing, by age, June 2004
• Figure 48: Attitudes towards hotel amenities and pricing, by householdincome, June 2004
• Figure 49: Attitudes towards hotel amenities and pricing, by level ofeducational attainment, June 2004
• Figure 50: Attitudes towards hotel amenities and pricing, by presence ofchildren, June 2004
• Figure 51: Attitudes towards hotel amenities and pricing, by race, June 2004
• Figure 52: Attitudes towards hotel amenities and pricing, by marital status,June 2004
• Figure 53: Attitudes towards hotel amenities and pricing, by region ofresidence, June 2004
• Figure 54: Attitudes towards hotel amenities and pricing, by locality ofrespondent, June 2004
• Summary

FUTURE & FORECAST

FUTURE TRENDS

• Increased travel spend
• Figure 55: Travel expenditures in the U.S., at current prices, 2001-06
• More visitors to U.S.
• Figure 56: Number and projection of domestic, inbound and outbound travelperson trips, 2001-06
• Travel spend
• Occupancy and rates expected to rise
• Increased use of Internet as a booking tool

MARKET FORECAST

• Hotels
• Figure 58: Forecast of total U.S. sales of hotel accommodations, at currentand constant prices, 2004-2009
• Graph 5: Forecast of total U.S. sales of hotel accommodations, at currentand constant prices, 2004-2009
• Forecast Factors

APPENDIX: TRADE ASSOCIATIONS

APPENDIX: RESEARCH METHODOLOGY

• Consumer Research
• Sampling & Weighting
• Presentation & Definition
• Further Analysis
• Trade Research
• Informal trade research
• Formal trade research
• Desk & Internet Research
• Sources
• Definitions
• Forecasts

APPENDIX: WHAT IS MINTEL?

• Mintel Publications
• Mintel Services
• Product retrieval
• Retail audits
• Tailored research
• Global New Products Database
• Research Support/Consultancy/MIC
• The Mintel Information Centre (MiC)
• PR Research