Hotel chains grabbing market share in mid-segment |
In the mid-market hotel segment, Hospitality chains are fast at grabbing market share. Millennials, as a group of customers, are driving faster growth of these hotel chains. Hotel chains accounted for 30 per cent of the $3.3 billion mid-market hospitality revenues in 2016. Their share has risen to 37 per cent of $4.4 billion in 2019 as the share of non-chain hotels fell from 70 per cent to 63 per cent. While the mid-market segment was estimated to be growing at 10 per cent in 2018, hotel chains were growing by 18 per cent. On the other hand, non-chain segment were reportedly growing by 6 per cent. According to studies, Fortune, Ginger, Lemontree, Fab and Oyo Townhouse have been growing faster than the market. Millennials show high levels of loyalty towards a certain hotel brand. Mid-segment hotels are increasingly investing in creating high stickiness through rewarding loyalty programmes.Further, millennials spend 40 per cent of the income on leisure and eating out. This dispensable income will translate in consumers preferring mid-segment hotels to budget hotels.
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