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In this article

The Top 10 Sectors of the Hospitality Industry

SNATIKA
Published in : Tourism and Hospitality . 11 Min Read . 1 year ago

Introduction

The hospitality industry is a 3486.77 billion U.S. dollar global industry according to Statista. It employs hundreds of thousands of employees. It is a major source of income in many tourism-dependent countries and localities. This giant industry is also providing economic benefits and employment opportunities for other interrelated industries. This is why understanding the correlation between the hospitality industry and its sub-sectors is important. At first glance, the hospitality industry seems like a single set of businesses that provide accommodation to travellers. However, several sectors fall under this hospitality industry umbrella that are directly or indirectly dependent on the operational processes of the industry. In this blog, we will discuss the sectors of the hospitality industry and explore their scope.

What is the hospitality industry?

The hospitality industry is a cluster of businesses and services that are targeted towards travellers like tourists, business travellers, international students, explorers, and the like. Different sectors provide their services or products to the same customers across different timelines. Due to globalisation, urbanisation, and their effects, the travel, stay, and consumption patterns of travellers have become increasingly complex and difficult to predict. Nowadays, the hospitality industry serves travellers throughout their journey. Here are the important sectors of the hospitality industry according to COTHM.

Top 10 Sectors in the Hospitality Industry

1. Travel agencies

A traveller's journey begins the moment they plan their trip. Nowadays, you can plan and book your flights, hotels, and tickets for your planned destinations through travel agencies and online hotel booking sites. There are both online and offline service providers in this sector. It is a $432 billion industry (Source: Statista). Key online booking sites like Airbnb and Booking.com are some of the Silicon Valley giants in this category. Several large and small online platforms are providing this service according to the personal niche that a traveller might be interested in. For example, some travel agencies provide pilgrimage packages, while others offer honeymoon packages and tourism packages. Both online and offline service providers make profits from the travelling spirit of customers, regardless of their intent.


Related Blog- Trends in the hospitality industry


2. Transportation services

Transportation is the lifeblood of the tourism and hospitality industries. Without transportation facilities, nobody can travel, which will result in a huge loss for these industries. This was especially witnessed during the pandemic when tourism and travel were restricted for months. Transportation includes all modes of travel like air travel, road and railway transport, taxi and bus services, autos, ships, boats, and cruisers. Often, travel agencies will take care of all your travel and accommodation if you avail of their services. However, for trips that have not been properly planned, other travel services offer cost-effective solutions. A myriad of travel booking websites and enterprises are working in conjunction with the transportation industry. Even bike and car rental services are running in this category. Some travel destinations, like Ladakh in India, are famous among motorists for a beautiful and long-riding experience.


Related Blog- Modern transportation and tourism growth


3. Accommodation facilities

This is the most visible sector of the hospitality industry. It consists of every type of hospitality facility, from small B&Bs, hotels, lodges, hostels, and homestays to unconventional accommodations like tree houses, heritage homes, camps, etc. Depending on your budget and intention of travel, there are multiple solutions in the hospitality industry. Recently, luxury resorts, cottages, and spas are making the most of their profits. Reporting on remote working, staycations, leisure travel, and working from hospitality facilities has become the norm. With in-house kitchens, swimming pools, and indoor and outdoor sports areas, these facilities offer a luxurious stay to their guests.

 

Solo travellers prefer hostels, where you pay only for your sleeping spot. These facilities are popular among tourists who are looking to build their network or those who are short on budget. Even more, individuals flock to hostels for the culture and fresh experiences they offer.


Related Blog- How Smaller Properties are Changing Hospitality Industry


4. Hotels, restaurants, bars, and cafes

After deciding where to sleep during their travel, a traveller's immediate concern is food. Most travellers appreciate tasty local food or beverages they find near their lodging facility. This is why hospitality facilities often have integrated kitchens, restaurants, bars, and cafes. This gives them an advantage over other facilities, which are dependent on beverages to serve their customers. Even outside the scope of a hospitality facility, the food and beverage industry is mostly dependent on travellers. Tourists bring economic benefits to the locality, and more such food-related markets emerge. Globally, the food and beverages market is valued at $6,327.35 billion in 2022 according to The Business Research Company.


There is also an increasing trend in customer loyalty for well-known hotel chains. Here, customers visit exclusively a facility maintained by a brand and eat or drink from only that brand. Popular examples of this kind of hotel chain will be Starbucks, McDonald's, and KFC. These chains are also relying on tourists and travellers for their business.


Related Blog- 6 Key Strategies for Efficient Facility Maintenance


5. Meeting halls, events management facilities, and event service providers

Public and private gatherings are a norm anyone will encounter throughout their lives. However, only a few will understand that behind these gatherings, several businesses are flourishing. There is no shortage of meetings, conferences, exhibitions, rallies, expos, and small and large private events all around us. Even weddings are some of the overlooked events that bring business and profits to several small companies. All these fall under event management. On a larger scale, investment expos hosted by governments bring thousands of foreign investors to a city. Many such specific expos, like the automobile expo, pet shows, and competitions, do the same. On the other hand, political rallies are also a major contributor to the economic benefits of the hospitality industry.


Often, those who attend these events come from afar and are prospective customers of all local businesses. Indeed, the wedding industry is a highly profitable business for event managers, decorators, beverage facilities, photographers, and videographers. According to Allied Market Research, global wedding services are expected to reach $160.5 billion in 2020 to $414.2 billion in 2020. It brings guests from different cities. These marriage halls and hospitality facilities share a common customer base.


Related Blog- Trends in Destination Weddings and Event Planning


6. Tourism information centres and destinations

It is the most important sector of the hospitality industry. Tourism is also a large term with several sub-industries, like the hospitality industry. Both these industries complement each other with their customer bases and the businesses that fall within them. Tourism can take different forms. It can be adventurous, like climbing Mount Everest or going on a safari in Africa. Or it can be calm and relaxing, like on a beach in Hawaii or at the Library of Congress among 173 million reading materials. The tourism industry is constantly evolving. Natural destinations, historical destinations, adventurous travel, solo travel, and couple- or group-travelling are all terms in the tourism industry.


However, the main part of tourism lives inside its office space. Here you can access information about tourist destinations in a place, how to get there, how much the travel costs, etc. These are the places where you can find information more reliable than online. You can book tickets, keep your belongings safe, or call in an emergency. You can also include visa and passport verification facilities in this category. These are the hubs of international travel. These facilities, which are regulated by the government or embassies, give you the necessary legal and travel advice while visiting a foreign country.


Related Blog- Local Partnerships in Hotel Management: Benefits and Best Practises


7. Attractions and Recreation

Attractions and recreational facilities are popular tourist destinations within a locality. These are the landmarks in a city like the Eiffel Tower in Paris or Victoria Peak in Hong Kong. They can also be Disneyland or Hollywood in the case of recreational facilities. Tourists visit travel destinations to experience, understand, or quench their curiosity. The rise in popularity of digital media is affecting people's travel mindsets. Social media posts induce curiosity and inspire people to travel often and visit these destinations. Theme parks, water parks, wildlife sanctuaries, historically significant places, monuments, and UNESCO World Heritage sites are all examples of this category.


Recreational facilities offer you activities that you can do instead of watching someone else, like in a movie theatre. This personal experience attracts tourists of all ages to these locations and facilities. Some recreational facilities also offer wellness services like spas, fitness, and yoga classes. However, indulging in these activities is according to the personal taste of individual tourists.


Related Blog- Revenue Diversification in Hospitality: Exploring Non-Room Revenue Streams

8. Sports and Entertainment

The sports and entertainment industry is also linked to the hospitality industry in several ways. Individual sports figures, teams, clubs, and tournaments attract hundreds of thousands of fans to different cities, nations, and even continents! Popular sports like soccer, football, cricket, the Olympics, the Commonwealth, F1 races, and Motocross rallies bring a huge number of sports tourists to the host city or country. More than 5 million tourists visited FIFA World Cup 2018 host cities in Russia according to TASS news agency. The emergence of premier league tournaments in these sports in recent years has only popularised this type of tourism. Similarly, entertainment personalities like singers, concerts, and competitions attract a large number of fans who follow them to different locations. On a similar note, cinema halls, concerts, and festivals are some of the popular entertainment industry facilities or services that are directly or indirectly dependent on the hospitality industry.


Related Blog- The Rise of Hostels: Understanding the Changing Hospitality Industry Landscape


9. Technology

As was mentioned earlier, in the digital era, technological solutions have become a major part of the hospitality industry. Online services, software, SaaS companies, and small businesses are all dependent on technology. Due to the reach and popularity of the internet, technology has become a critical part of all hospitality facilities' operations. According to a Statista report, market size of the smart hospitality sector worldwide has reached $13.9 billion. From contactless check-ins to smart homes and AI-powered lighting, cooling, and perfection systems, technology has become a part of the hospitality industry. On the internet, recommendation software, digital marketing solutions, and booking services are plentiful. Virtual reality solutions are slowly making progress in the tourism industry. Nowadays, you can chat online with smart bots and clear all your doubts without speaking a single word with customer service.


Related Blog- Technology’s Influence on Tourism and Hospitality Management


10. Cruises

Cruises are large, somewhat huge floating vessels that employ all the above industries. It is like a mini island, offering all the recreational activities and luxury services while also providing transportation between two or more different tourist destinations. The cruise industry revenue worldwide grew to over $27 billion according to Statista. Luxury cruise ships have party halls, swimming pools, spas, and restaurants, as well as convention and cinema halls. They have casinos, sports and fitness centres, and accommodation facilities. It is a mini-hospitality industry in itself. Moreover, they offer a beautiful travel experience on the oceans for luxury tourists. Most of the tourism packages are available on cruise ships and luxury yachts around the world.

 

There are also review sites like Google Maps that provide you with not only the necessary information but also share experiences, warnings, and tips from those who have previously been there. As technology becomes more popular, it becomes available at your fingertips through your handheld devices and apps. It is the hospitality industry sub-sector that is going to have even more aggressive growth in the coming years.


Related Blog- The Future of Ecotourism


Conclusion

The hospitality industry is not just about hotels and travel agents. It has evolved over the years and has become one of the largest industries, employing hundreds of thousands of people in its sub industries. These industries, working together, form the giant hospitality industry. It can be largely categorised into ten industries. Travel, agencies, transportation, services, accommodation, food and beverages, event management, tourism, attractions and recreational destinations, sports and entertainment, technology, and luxury cruises All these industries employ a myriad of facilities, ranging from simple shops and service providers to luxury ships and resorts.

 

Even package providers that serve luxury tourists, pilgrims, business travellers, education tourists, sports tourists, and medical tourists form a significant part of the hospitality industry. In recent years, due to the explosion in popularity of the internet and social media, online services have found their own place in the hospitality industry. A range of technological solutions from booking, bookkeeping, and hotel management software to automation, smart facilities using artificial intelligence solutions, and AI chatbots are increasing in popularity. Third-party reviews are rising in popularity as online services like Google Maps and reviews on online booking sites are also useful for tourists and profitable for businesses that use them.

 

If you are a manager in the tourism and hospitality industries, you will need a prestigious Masters degree to make it big in the industry. SNATIKA offers online Masters degree programs from the United Kingdom exclusively to senior professionals in the tourism and hospitality industries. If you have managerial experience, you can avail yourself of this golden opportunity with a myriad of other benefits, like dual qualifications and the shortest duration. Visit SNATIKA to know more about the UK Masters in Tourism and Hospitality Management.


Related Blog- Why You Need a Masters in Tourism and Hospitality Management




Citations

COTHM, Maria. “What Are the Sectors of the Hospitality Industry?” COTHM Dubai, 31 Oct. 2022, cothm.ae/what-are-the-sectors-of-the-hospitality-industry.


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