Hotel and Hospitality Management Software Market

Market Overview

The global Hotel and Hospitality Management Software Market size was valued at USD 3.67 billion in 2023. It is expected to reach USD 6.21 billion in 2032, growing at a CAGR of 6.22% over the forecast period (2024-32)

Hotel and hospitality management software (HMS) helps hotels in daily operations, such as manage reservations, point of sale transactions, guest check-ins, and coordinate housekeeping. It also enhances the guest experience using CRM (customer relationship management). Currently, it has become crucial for the hotel and hospitality industry to improve its tourism services.

To establish a place in the competitive e-market, it has become imperative for the hotels to build a correct IT infrastructure for the hotel management systems. Furthermore, the hospitality and tourism sectors have emerged as the key drivers in the competitive economy, especially in emerging economies where growth has shifted from goods and products towards the services sector.

With increasing tourism, the burden of hotel management operations such as booking reservations, transactions overload, restaurant and catering management and, customer relationship management is anticipated to surge. To ease such operational overload, hotel and hospitality management software (HMS) has gained traction in the hospitality industry. HMS market is imperative and likely to gain great importance in the coming years.

The Rise in the Tourism Industry

According to the first UNWTO World Tourism Barometer of the year, international tourism ended 2023 at 88% of pre-pandemic levels, with an estimated 1.3 billion international arrivals. A 5% growth was observed from the previous year owing to prominent factors such as increasing growth of the middle class in developing markets, technical innovations, innovative business models, inexpensive travel expenses and visa facilitation, international visitor arrivals. This led to a relatively strong global economy, further bolstering the hotel and hospitality management software market. The Asia Pacific recorded the highest growth in tourist arrivals followed by Africa. However, Europe accounts for more than half of the world’s international arrivals. The Middle East led recovery in relative terms as the only region to overcome pre-pandemic levels with arrivals 22% above 2019. Europe, the world's most visited region, reached 94% of 2019 levels, supported by intra-regional demand and travel from the United States. Africa recovered 96% of pre-pandemic visitors and Americas reached 90%. Asia and the Pacific reached 65% of pre-pandemic levels following the reopening of several markets and destinations. However, performance is mixed, with South Asia already recovering 87% of 2019 levels and North-East Asia around 55%.

The Rise in Hospitality Technology

• Technological advancements in hotel management are revolutionizing the hospitality industry by providing significant competitive advantages to hotels. These technologies cater to the diverse needs of both guests and staff, enhancing overall operational efficiency and guest satisfaction. For guests, modern hotel management technology facilitates a wide range of services that are increasingly in demand. Business travelers, in particular, expect seamless access to email and the internet, making high-speed Wi-Fi a necessity. Hotels are leveraging technology to offer integrated solutions that streamline guest experiences, including digital access to hotel information, interactive site maps, comprehensive restaurant menus, and curated guides to local attractions. Technology also enables guests to easily retrieve messages, order room service, and manage their stay through mobile apps or in-room tablets. This integration enhances convenience and personalization, contributing to a more enjoyable and efficient stay.
• For hotel staff, technology simplifies and automates various operational tasks, leading to improved efficiency and productivity. Property Management Systems (PMS) allow for streamlined check-ins and check-outs, real-time room availability updates, and efficient handling of reservations. Enhanced communication tools facilitate better coordination among staff, while advanced analytics offer insights into guest preferences and operational performance, aiding in strategic decision-making. As technology evolves rapidly, hotels must continuously adopt new innovations to stay competitive. The hospitality industry is witnessing a surge in the implementation of cutting-edge technologies such as artificial intelligence (AI) for personalized guest experiences, Internet of Things (IoT) for smart room controls, and data-driven insights for optimizing operations. Hotels that proactively embrace these advancements can differentiate themselves from competitors, attract tech-savvy travelers, and adapt to shifting market demands.

Deployment and Integration of the Software Systems

Deployment of the software systems can become a hassle with a lack of correct IT infrastructure in the hotels. For instance, for the deployment of nation-wide hotel reservation systems, there is a long road ahead for the hotel industry to get IT standardization put in place. Nowadays, amid hotel alliances, organizations do not agree upon data exchanges between them. If such issues about hotel industry standards are settled by agreements, then B2B (business to business) and B2C (business to customer) systems would provide benefits to both enterprises and customers.

HMS integrates many hotel industry systems such as Property Management system, Front Office system, Enterprise Information Portal(EIP), Enterprise Information System (EIS), Customer Relationship Management(CRM), and Supply Chain Management system (SCM). Such integration would be an immense task unless a robust IT infrastructure to handle unpredictability is installed.

The Impact of COVID-19 on Tourism

The pandemic had compelled a lockdown across the world. Initially, it had temporarily shut down public places such as hotels, tourist spots, clubs, restaurants, and others. Further, the tremendous travel restrictions both domestic and international across the globe restrained the growth of the market. As stated by the UNWTO, International arrivals dropped by 72% over the first ten months of 2020 and caused a loss of approximately 1.1 trillion USD in International receipts thereby, significantly hampering the adoption of the hotel and hospitality management software market.

Regional Analysis

The positive outlook is reflected in the latest UNWTO Tourism Confidence Index survey, with 67% of tourism professionals indicating better or much better prospects for 2024 compared to 2023. Some 28% expect similar performance, while only 6% expect tourism performance in 2024 to be worse than last year.

There is still significant room for recovery across Asia. The reopening of several source markets and destinations will boost recovery in the region and globally. Chinese outbound and inbound tourism is expected to accelerate in 2024, due to visa facilitation and improved air capacity. China is applying visa-free travel for citizens of France, Germany, Italy, the Netherlands, Spain and Malaysia for a year to 30 November 2024. Visa and travel facilitation measures will promote travel to and around the Middle East and Africa with the Gulf Cooperation Council (GCC) countries to implement a unified tourist visa, similar to the Schengen visa, and measures to facilitate intra-African travel in Kenya and Rwanda.

Europe is expected to drive results again in 2024. In March, Romania and Bulgaria will join the Schengen area of free movement, and Paris will host the Summer Olympics in July and August.

Strong travel from the United States, backed by a strong US dollar, will continue to benefit destinations in the Americas and beyond. As in 2023, robust source markets in Europe, the Americas and the Middle East, will continue to fuel tourism flows and spending around the world.

International tourism hit US$1.4 trillion in 2023. The latest UNWTO data also highlights the economic impact of recovery. International tourism receipts reached USD 1.4 trillion in 2023 according to preliminary estimates, about 93% of the USD 1.5 trillion earned by destinations in 2019. Total export revenues from tourism (including passenger transport) are estimated at USD 1.6 trillion in 2023, almost 95% of the USD 1.7 trillion recorded in 2019. Preliminary estimates on the economic contribution of tourism, measured in tourism direct gross domestic product (TDGDP) point to USD 3.3 trillion in 2023, or 3% of global GDP. This indicates a recovery of pre-pandemic TDGDP driven by strong domestic and international tourism. Several destinations reported strong growth in international tourism receipts during the first ten to twelve months of 2023, exceeding in some cases growth in arrivals. Strong demand for outbound travel was also reported by several large source markets this period, with many exceeding 2019 levels.

The sustained recovery is also reflected in the performance of industry indicators. According to the UNWTO Tourism Recovery Tracker, both international air capacity and passenger demand recovered about 90% of pre-pandemic levels through October 2023 (IATA). Global occupancy rates in accommodation establishments reached 65% in November, slightly above 62% in November 2022.

Segmental Analysis

By Product Type

• CRS (Central Reservation System)
• Channel Manager
• Booking Engine
• Digital Services
• Property Management
• Other

Digital Services in the hotel and hospitality industry offers innovative guest experiences. Digital services such as virtual concierge provide guests with conversational and contextual assistance. It can record guests’ needs and preferences, such as room temperature preference, cab booking, or wake-up call, and enter any special dietary requirements. It can also optimize hotel website designs, search engine optimization, social media integration, and content management system to enhance digital solutions.

A property management system (PMS) facilitates the hotel’s reservation management and administrative tasks. It simplifies the main processes of hotels related to internal and external operations including front-desk operations, reservations, channel management, guest check-in/check-out, housekeeping, rate and occupancy management, and payment processing. Today's hotel PMS solutions help hoteliers deliver the experience that guests are expecting along with efficient management of their business.

By Hotel Type

• Business Hotel
• Resorts and Spas
• Boutique Hotel
• Others

Business hotels are designed in a way to suits the needs of business travelers. Business hotels are generally located in favorable places, in the center of the city, and have established transport links with railway stations, airports, exhibitions, and business areas of the city.

The hotels offer easy accessibility, Wi-Fi, and quick check in\out procedures, complimentary newspapers, and free local telephone calls. Hotel and hospitality management software provide exceptional service to satisfy the demands of today's corporate travelers. It enables a seamless check-in and check-out process, easy to navigate, and offers corporate rate logins, upgrades, and loyalty options to business travelers.

Impact of covid-19

The pandemic had compelled a lockdown across the world. Initially, it had temporarily shut down public places such as hotels, tourist spots, clubs, restaurants, and others. Further, the tremendous travel restrictions both domestic and international across the globe restrained the growth of the market. As stated by the UNWTO, International arrivals dropped by 72% over the first ten months of 2020 and caused a loss of approximately 1.1 trillion USD in International receipts thereby, significantly hampering the adoption of the hotel and hospitality management software market.

Recent Developments

• In May 2023 Oracle revealed its intention to extend the deployment of its Oracle Hospitality OPERA Cloud Property Management System (PMS) to an additional 2,000 Wyndham Properties & Resorts by year’s end, further advancing its global expansion. This system helps franchisees optimize daily hotel operations, enhance guest experiences, and drive revenue growth across numerous Wyndham-branded hotels utilizing OPERA Cloud.
• In April 2023 Amazon introduced Alexa Smart Properties (ASP) for Hospitality in Canada at the Fairmont Le Manoir Richelieu in Charlevoix, Quebec. The hotel has equipped each room with an Amazon Echo device. This service allows guests to request information that would normally be sought at the front desk and also enables Alexa to perform various tasks, including playing music, checking the weather, ordering room service or additional towels, adjusting room temperature and lighting, and facilitating check-out.
• In October 2022 Tripleseat teamed up with Curator Hotel & Resort Collection, a network of boutique and lifestyle hotels, to become their preferred technology provider. Tripleseat offers a cloud-based sales and catering management system designed specifically for small hotels. This partnership aims to simplify booking processes, boost efficiency, and drive sales. Moreover, Tripleseat's software is compatible with other technologies used by Curator, ensuring a seamless booking experience across the consortium.