According to data from Smith Travel Research (STR), via CNN, hotels in the United States had the highest level of rooms booked ever in 2014. And, the outlook looks positive moving forward for the global hotel industry. Statista is predicting the hotel industry worldwide will generate $550 billion in 2016.
While that is certainly excellent news for brands like Intercontinental and Marriott, it also means great things for a number of other industries. After all, if there are more hotel rooms being booked, then that means more laundry to do, food to be made and accountants/bookkeepers to handle all of these transactions -- such as paying vendors and employees.
Keeping that in mind, here are some of the other businesses that are making money from the hotel industry.
As Starwood Hotels & Resorts notes, "the Housekeeping department is typically the largest in the hotel in terms of both the number of associates and annual operating budget." This department includes room attendants (the individuals who clean and restock rooms) and laundry associates.
Between all of the cleaning supplies and equipment (vacuums, washers and dryers) needed to keep hotels clean and welcoming, it's not surprising that this department would profit off of hotels. If residential house cleaners, such as 30 percent of franchises from Molly Maids, can earn $1 million annually, just imagine how much money hotels spend on housekeeping?
Whether it's bars of soap, bed linens or mattresses, companies involved with hotel amenities are also profiting heavily from hotels.
For example, Marriott informs Forbes that it spends approximately $20 million per year on Thann products. Thann is a Bangkok-based company that makes a line of natural skin and hair care products.
Besides hygiene products, the bedding industry is also booming.The IRS noted that Marriott spent $190 million when it replaced old bedding with ones that contained higher thread count sheets, down comforters and duvet covers. Starwood Hotels invested $13 million for The Four Comfort Bed.
Food & Beverage
The Dow Hotel Company states "between 25 percent and 45 percent of a hotel's revenue can come from its food and beverage sales." Lakshmi Narasimhan, Founder of Ignite Insight LLC, states on Hotel Business Review, however, that "the Food and Beverage department contributes between 10 percent and 20 percent of Total Revenues." Regardless of the exact figures, the food and beverage department make up a solid portion of a hotel's revenue -- which means a hefty profit for vendors dealing with hotels.
"According to PKF Hospitality Research, LLC (PKF-HR), telecommunications revenue at the average U.S. hotel in its annual Trends® in the Hotel Industry survey sample has declined from a peak of $1,274 per available room (PAR) in 2000 to $269 PAR in 2011." However, as Robert Mandelbaum is Director of Research Information Services for PKF Hospitality Research, LLC, notes, the recovery from the 2009 recession has helped improve customer spending for hotel telecommunications.
"Telecommunications revenue has increased from $178 PAR in 2009 to $269 PAR in 2011, an increase of 51 percent." Also, "guest spending on phone service and the internet has increased from $0.77 POR in 2009 to $1.07 POR in 2011."
This may not be a large revenue for the hotel itself, but this is great news for telecommunications providers.
Online booking sites, such as Priceline, Booking.com, Expedia and Orbitz are also profiting off of hotels. According to Forbes, hotel bookings accounted for of 97 percent of Priceline's revenue, as well as "contributing around 83 percent to its total gross booking" in 2013. This makes hotels the most profitable division for Priceline. Something interesting to note is that most of these companies are using the backbone of Duetto to manage all the data and help large hotels make better strategic decisions..
Whether it is public transportation, taxis or shuttles, the transportation industry also benefits from hotels. Take for example SuperShuttle. The company has "approximately 1,200 distinctive blue and yellow vans on the road" that provides travelers in more than 40 airports and over 50 cities transportation from the airport to their hotel. .
Not only does that benefit transportation companies, like SuperShuttle, transportation to and from hotels is profitable for the energy and maintenance companies who keep these vehicles running.
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