The hotel industry is one of the most important components of the wider service industry, catering to customers who require overnight accommodation. It is closely associated with the travel and hospitality industries, although there are notable differences in scope. In this article, you will learn more about the hotel industry, its links to other service industry sectors, and the range of hotel and guest accommodation types.

Table of Contents:

What Is a Hotel?

Broadly speaking, a hotel is a managed building or establishment that provides guests with a place to stay overnight – on a short-term basis – in exchange for money. The precise features and services provided to guests can vary quite drastically from one hotel to another.

Hotel owners aim to attract a particular type of customer through their pricing model and marketing strategy or via the range of services they offer.

What Is The Hotel Industry?

Next, it is important to answer the question: what is the hotel industry? Put simply, the hotel industry is the section of the service industry that deals with guest accommodation or lodgings. By most definitions, the hotel industry refers to hotels and many other forms of overnight accommodation, including hostels, motels, inns, and guest houses. According to the Hotels Market – Global Industry Analysis and Forecast by MMR, the hotel market is expected to reach $1663.82 billion by 2029.

However, it does not usually include long-term or permanent forms of accommodation. Due to the nature of hotel services, it is closely associated with the travel and tourism industry.

The Difference Between the Hotel Industry and the Hospitality Industry

One common area of confusion concerns the difference between the hotel and the hospitality industry, with many people mistakenly believing the two terms refer to the same thing. However, while there is a cross-over, the difference is that the hospitality industry is broader in scope and includes multiple different sectors.

The hotel industry is solely concerned with providing guest accommodation and related services. By contrast, the hospitality industry is concerned with leisure in a more general sense. As a result, it covers accommodation, restaurants, bars, cafés, nightlife, and many travel and tourism services.

Table: Difference Between Hotel and Hospitality Industry

Aspect Hotel Industry Hospitality Industry
Primary Focus Providing accommodations and lodging services to guests. Encompasses a broader range of services and experiences, including accommodations, dining, entertainment, events, and customer service.
Scope of Services Primarily focuses on providing rooms, amenities, and related services within a physical property. Offers a wide spectrum of services beyond lodging, such as restaurants, bars, events, catering, and entertainment, often integrated into a holistic guest experience.
Business Model Revenue is generated primarily through room bookings, rates, and occupancy levels. Revenue streams come from various sources, including room bookings, dining, events, and guest experiences, making it more diverse and complex.

Different Types of Accommodation in the Hotel Industry

It is important to understand that the hotel industry is a catch-all term to describe guest accommodation services. With that in mind, it is worth noting that a variety of different accommodation types fall under this umbrella term. Some of the main types are described in more detail below:

Hotels

The most common type of accommodation in the hotel industry, a hotel is defined as an establishment that offers overnight accommodation, meals and other services. They are mainly aimed at travelers or tourists, although locals may also use them. Hotels provide private rooms and almost always have en-suite bathrooms.

Bed and Breakfasts

Bed and breakfasts, or B&Bs, are smaller establishments offering guests private rooms for overnight stays and breakfast in the morning. Often, these establishments are converted from private homes, and many B&B owners live on their property. While they are often a budget option, high-end or luxury B&Bs exist.

Motels

Motels are a form of overnight accommodation tailored towards motorists. For this reason, they are typically located conveniently by the roadside and offer ample free parking. A motel will generally have a number of guest rooms and may have some additional facilities but will usually have fewer amenities than hotels.

Botels

‘Botel’ is the name given to a boat that has been adapted to offer hotel-style lodgings. Many botels are permanently moored riverboats, although others are converted ships, which can travel with guests onboard. They are especially popular in European cities with rivers or canals.

Inns

An inn is an establishment that provides temporary accommodation, usually along with food and drinks. Inns are smaller than hotels and are closer in size to bed and breakfasts, although inns are often slightly larger. Guests are allocated private rooms; food options usually include breakfast and dinner.

Resorts

Resorts are commercial establishments, usually consisting of a hotel and a variety of on-site services and amenities. Guests will usually have access to lodgings, restaurants, bars, entertainment options, recreational activities, and shops, which can all be accessed without leaving the premises.

Serviced Apartments

Popular among business travelers, serviced apartments are apartment-style lodgings, where guests benefit from a full range of services, such as room service, housekeeping and laundry services. Most serviced apartments also offer additional amenities, while the apartments tend to be larger than most hotel rooms.

Hostals

Often confused with hostels, a hostal is a form of accommodation primarily found in Spanish-speaking regions. They resemble a budget hotel, offering either private bedrooms or apartments, while they may also have a bar, restaurant and/or café. Most hostals are family-owned, and guests may sometimes share bathrooms with others.

Hostels

A hostel is a form of accommodation, typically aimed at those on a budget, where multiple guests sleep in different beds in the same living space. Effectively, guests pay for a bed, rather than a private room, and hostels hold a particular appeal for those looking to meet new people. Guests will usually share kitchen and bathroom facilities.

Video: What Is A Hostel? 

Apartment Hotels

An apartment hotel is essentially an apartment building that operates hotel-style services. It provides a similar experience to renting an apartment, albeit with the option to check-in and check out on-demand rather than signing a fixed-term contract. These hotels will generally also provide basic housekeeping services.

Boutique Hotels

Often promoted based on aspiration and luxury, boutique hotels are hotels situated within relatively small buildings. In most instances, they provide guests with upmarket rooms and high-quality services. They often have a particular theme and are commonly found in trendy urban areas.

Condo Hotels

A condo hotel is a condominium building that operates as a hotel, allowing guests to rent a condominium unit for a short period. They are almost exclusively found in cities, are especially popular in the United States, and combine the holiday home experience with hotel-style service features.

Eco Hotels

The basic definition of an eco-hotel is a hotel, which has taken steps to embrace sustainable living practices to minimize the environmental damage they are responsible for. They may prioritize the use of local products, adopt recycling measures, focus on energy saving, and use sustainable bed linen and towels.

Guest Houses

Typically, a guest house is a private house, which has been converted to provide guest lodgings. It is common for the guest area to be kept completely separate from another area, where the owner may live. Some guesthouses provide additional services, but many are operated on a self-service basis.

Holiday Cottages

A holiday cottage, also known as a holiday home, is simply a cottage or small house left to people temporarily for holiday purposes. Essentially, a guest pays to use the property for a short period of time. They are especially common in the UK, US, and Canada, and a key advantage is the freedom they offer guests.

Pensions

Pensions are a form of the guest house, similar to bed and breakfasts, while providing more meals throughout the day. In most cases, guests have an option of different plans, such as full board, where they get breakfast, lunch, and dinner, or half board, where they may get breakfast and dinner, without the lunch.

Pop-Up Hotels

A pop-up hotel is a name given to a hotel that is housed within a non-permanent structure. Typically, pop-up hotels exist for a short period of time only. They are most commonly associated with outdoor events, but pop-up hotels may also be established for a particular time of year, such as Christmas or the summer.

Roadhouses

Finally, roadhouses are relatively small establishments situated next to a road to attract passing customers. In some ways, they combine the features of a motel, B&B, and inn. They often offer several private guest rooms, similar to a B&B, and may also have a restaurant and/or a bar.

Hotel industry - Quote Julia Sugarbaker

Significance of Star Ratings in the Hotel Industry

Within the hotel industry, star ratings are used to measure the quality of hotels. Although there is no international standard for defining what star ratings mean, the most popular version of this system is associated with the Forbes Travel Guide, where hotels are rated based on established criteria.

Star ratings carry huge significance within the hotel industry because so many customers take the time to research hotels before making a booking. Although word of mouth and feedback from other customers are important, star ratings can carry extra weight because evaluators have experience with many different properties.

The significance of hotel star ratings is further highlighted by the steps that those in the hotel industry take to achieve higher ratings, and this is for a good reason. Moving up a star rating can help hotels to generate more bookings and charge higher rates while moving down can have the exact opposite effect.

You can learn more about how star ratings work, how they can influence customers, and view a breakdown of what each star rating means by reading “The Hotel Star Rating System: Types, Benefits, Significance, Examples”.

Hotel Marketing Trends and Strategies

Hotel marketing is crucial in helping owners maximize bookings and revenue. After all, it is the main way in which those in the hotel industry can reach out to potential guests, conveying their unique selling proposition, brand values, and why guests should choose to stay with them.

Do you want to learn more about hotel marketing? In the articles “The Latest Hotel Marketing Trends in the Hotel Industry” and “Essential Hotel Marketing Strategies,” you find the latest hotel marketing trends and strategies.

Hotel Revenue Management

Hotel revenue management enables owners to predict demand levels and optimize distribution and pricing to maximize financial results. Direct bookings are the best way of maximizing profits. According to the Hotel And Other Travel Accommodation Global Market Opportunities And Strategies To 2031 by Research and Markets, the direct online bookings market will gain $226.6 billion of global annual sales by 2026. In the article “What is Hotel Revenue Management?”, you will find out more about hotel revenue management, the reasons it is so valuable to hotel owners, and the necessary conditions for implementing a hotel revenue management strategy.

Hotel Technology Trends

Hotel technology has advanced in leaps and bounds in recent years. Not only are “smart” systems entirely prevalent, but guests can expect to enjoy more interactive experiences than ever before. In the article “The Latest Hotel Technology Trends,” you find the latest hotel technology trends and what these might signify for the hotel industry.

Consumer Trends in The Hotel Industry

The world is moving faster than ever as shifting social attitudes, new technologies, and economic and demographic changes all drive seismic shifts in how we live, do business, and work. Nowhere is this more obvious than in hotel industry trends. Some hotel industry trends may come and go, while others become enduring features.

Staying on top of trends is vital to reap the profits of early adoption. In the article “Hotel Industry Trends: Keep Up With The Latest Developments!” you find the latest movements.

Hotel Management

The hotel industry is one of the fastest-growing sectors in the 21st century. Hotel management plays a vital role in this industry, and such a business comes with many responsibilities. Only the most qualified people can take on such roles so if you are ready for this exciting job opportunity, that will help you grow personally and professionally.

You should refer to this informative guide, ‘Hotel Management: Everything You Need to Know About Managing a Hotel!’, for first-hand information on how to start a career in the highly competitive hotel industry.

Understanding the Different Hotel Industry Positions

Success in the hotel industry means ensuring that all departments work effectively. Within any given property, people are working in a large number of different hotel positions, and it is beneficial to have an understanding of which jobs exist and what those people are actually doing.

In “Hotel Positions: Overview of All Positions Within a Hotel” you will find a concise breakdown of the key hotel job roles and their main responsibilities.

Tips to Boost Your Hotel Career Prospects

The hotel industry can be extremely competitive, so those exploring hotel careers need to find ways to stand out from the pack. In particular, there are several steps you can take to make sure you develop the right skills, network with the right people, perfect the application process and impress during your interview.

Read “Hotel Careers: Tips to Find a Job in the Hotel Industry” for advice on some of the steps you should take to maximize your chances of landing the hotel job you are looking for.

Job Boards for Finding a Job in the Hotel Industry

Hotel jobs can be varied, rewarding, and engaging, and many will also offer excellent long-term prospects. Nevertheless, finding the role that best suits your preferences and skill set is important. One of the best ways to pinpoint the right job within the hotel industry is to turn to dedicated hotel job boards, and a wide range of these services are available online.

The article “Hotel Jobs: The Best Hotel Job Boards to Boost Your Career“ contains 10 examples.

Channels to Find Hotel Management Jobs

The hotel industry can be extremely competitive, especially when searching for hotel management jobs. For this reason, it can be important to use various methods to find jobs to apply for, ranging from hotel websites and job boards to social media and professional recruitment agencies.

In “Hotel Management Jobs: List of Channels to Find Your Dream Job,” you will find information about the best channels to aid your search for a management position in the hotel industry.

Hotel industry - Quote César Ritz

Find Hotel Vacancies With These Chains

If you are looking for a new job in the hotel industry, it may be best to identify potential roles and apply for hotel vacancies using the websites of some of the top hotel chains. In most cases, large hotel companies will include a ‘Careers’ section on their website, providing all the information you need.

By reading the “Hotel Vacancies: List of Hotel Chains to Start Your Career” article, you will learn more about the process of applying for hotel vacancies, along with a list of some of the most successful chains.

Finding Your Next Hotel Manager Position

The hotel industry can be highly competitive, meaning any available hotel manager job is likely to have multiple applicants. To give yourself the greatest chance of landing the role you want, it can be crucial to understand the nature of hotel management and what the job will entail.

In “Hotel Manager: Tips to Find Your Next Hotel Manager Job!” you will find important information about the necessary skills, qualifications, and experience you need and what to can expect from being a hotel manager.

Tips for Hiring the Best Hotel Industry Staff

Within the hotel industry, making sensible hiring decisions can have a huge bearing on whether or not a property is ultimately successful. However, several steps should be followed to identify the positions that need to be filled and ensure you hire the right hotel staff for those positions.

Read “Hotel Staff: How to Hire the Best Staff for Your Hotel” for more information on the importance of hiring, the signs you need to hire new staff, and seven specific tips for recruiting the right people for the right roles.

A Global List of Hotel Schools

If you’re interested in finding out more about a career in the hotel industry, a course of study at a hotel school might be what you’re looking for. In “Hotel Schools: Global List of Hotel Management Schools”, you’ll learn about the advantages of attending a hotel school and the topics you might study. You’ll also be able to read about some of the top schools in the hotel industry and the courses they offer, from short subjects to full degree programs. You can learn about everything from hotel health and safety to running your hotel.

A List of The Most Popular Hotel Management Courses

A hotel management course can really kick-start your career in the hotel industry, building skills and expertise while also allowing you to develop your professional networks and industry contacts.

In “Hotel Management Course: List of The Most Popular Courses”, you’ll learn everything you need about training for management roles in the hotel industry. You’ll learn why a career in hotels is a great idea and how hotel schools can help you. You’ll also find out about the top educators in the field and the kinds of courses they offer.

Hotel Industry Course: Learn Skills for the Hotel Industry

The hotel industry can provide excellent career opportunities, but many require particular skills. Meanwhile, for more advanced positions in the industry, it may be necessary to obtain certain qualifications. Thankfully, many educators offer hotel courses to teach these skills and provide these qualifications.

You can read our “Hotel Course: A List of Courses & Hotel Educators” article to learn more about the nature of these courses, which academic institutions offer them, and how they can assist you in your career.

Video: Different Types of Hotel Positions Within The Hotel Industry

Below is a video where hotel manager Wilson shows you different hotel positions within the hotel industry.

Practical Guide on Revenue Management & Hotel Marketing Strategies

Hotel marketing offers many strategies that hotel owners must be aware of if they want to succeed in this business. You must use the most effective hotel marketing and revenue management strategies to attract as many guests as possible. In the ‘Free Handbook: Revenue Management & Hotel Marketing Strategies’, hotel owners will get all the tips and tricks on the best marketing strategies.

Hotel Industry FAQs

The hotel industry is a term that encompasses elements of the hospitality sector that provide lodging, food and drink, and other guest services. The hotel industry primarily focuses on the needs of travelers and can range from budget hotels in small towns to big-city luxury resorts.

The hotel classification system is categorized based on a range of factors, including amenities, service level, price, and quality of accommodations. While there are many different classification systems, the most popular are target markets like business, leisure, and family. Star ratings range from one to five stars. The classification known as type includes various options such as luxury, budget, boutique, and more.

The hotel industry is in a growth period as it moves forward after previous dips. But the growth is solid and shows adaptation to the new market conditions. This growth is moving along at an even faster pace thanks to increased demand for global travel, the diversification of lodging choices, and technological advances.

The hotel industry contributes billions to the global economy. The full size is estimated to be in the millions when various properties are counted all over the world. But, of course, the size in any specific area will vary.

Hotels are a vital component of any traveler’s journey. A hotel provides tourists and other travelers with food, accommodation, and perhaps most importantly a sense of safety or familiarity. Hotels also help to boost a region’s income from tourism and the growth of international trade and travel alike.

While the hotel industry is closely associated with travel, tourism, and hospitality, it is focused on guest accommodation and services related to overnight stays. Nevertheless, a wide range of different accommodation types is usually placed underneath the hotel industry umbrella.

Want to Learn More About Related Industries?

The hospitality industry is part of the travel industry, and the hotel industry is part of the hospitality industry. All these industries have in common that they are large service industries worldwide and increasingly important in the modern age. But what is the difference between the travel and tourism industry? And what are all hospitality sectors within the hospitality industry? In the following articles, you learn more about related industries.

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This article is written by:

Martijn Barten

Hi, I am Martijn Barten, founder of Revfine.com. With 20 years of experience in the hospitality industry, I specialize in optimizing revenue by combining revenue management with marketing strategies. I have successfully developed, implemented, and managed revenue management and marketing strategies for individual properties and multi-property portfolios.