How increased air travel is fueling the hotel industry

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Worldwide, the hotel industry relies on the airline industry to literally carry its demand. Sure, there are drive markets with little reliance on airlift, but the vast majority of the industry depends on guests arriving via airplane.

Following the inception of commercial flight back in 1914, it required more than 75 years for annual air passenger volume to hit the 1 billion passenger mark in 1990. Fifteen years later, global passenger count hit 2 billion annually. The next billion only required eight years despite the global economic recession. Then, in 2017, a mere five years later, the industry surpassed 4 billion air travelers.

Despite the impressive growth over the past two decades, we are only at the beginning of the vast expansion of the travel industry. Driven by emerging markets and a shift in population demographics, the International Air Transport Association expects 7.8 billion air passengers by 2036 and then an astounding 16 billion by 2050.

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For those who scoff at such robust expectations, consider this: Thirty years ago, a small airport in the Middle East handled 4.3 million passengers annually. Today, it is one of the busiest facilities in the world, handling more than 88 million passengers in 2017—Dubai International Airport. The hotel industry in Dubai has grown in similar fashion, from fewer than 5,000 rooms in 1988 to more than 86,000 today. The industry has seen similar growth across the globe, from major countries like China and Brazil, to smaller destinations like Iceland and Vietnam, to robust cities like Nashville and Austin, Texas.

There likely will be some economic hiccups along the trend line, but the overarching trend is both daunting and exciting for the entire travel sector, and certainly for hotels. With increased access to new markets and existing markets around the world, more people are traveling and people are traveling more often. Today, the average member of the traveling population takes fewer than one air trip per year. By 2050, that rising demographic segment will average more than 2.5 plane trips per year.

The exponential growth in air travelers will obviously lead to a future need for hotel rooms—lots of them. Beyond that is the economic impact with more jobs, more tourism spending and more real estate development, not to mention a very bright future for a much larger hospitality industry. 

Stephen R. Hennis is president of Hotelogy, a hotel research company. He can be reached at [email protected].

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