The Travel, Hospitality, and Leisure industry encompasses several segments such as Food & Beverage, Hotel, Recreation, Travel, Leisure, and Tourism. The industry is characterized by a high level of personal care services to customers and depends on a diversified supply chain. It is both a capital and labor intensive industry. It relies on investments in fixed assets and its growth has a strong impact on employment.
It generates over $1.6 trillion in economic output, represents 2.8% of gross domestic product (GDP), and supports over 7.8 million American jobs. Its exports account for 11% of all U.S. exports and over 30% of all U.S. services exports.
Environment-friendly consumers will continue to shape the industry in the near future. Travel operators can expect continued pressure to implement more sustainable practices and will definitely obtain new clients if they keep on this path. In addition, emerging economies are the biggest drivers of growth within the tourism industry.
Regarding the scenario with Covid-19, travel restrictions around the world are delaying travel plans and shifting future trends. Thus, the industry can expect some changes in consumers’ demand for the near future. People will tend to travel a lot more within the borders, increasing domestic and regional travel. In addition, consumers are opting for longer trips, private accommodations instead of hotels and resorts, travel insurance, and travel advisors.
The Paid-in-Full Rate is when the SBA loan is fully paid off by the small business owner including interest, indicating financial strength.
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the small business owner.
For every 13 SBA loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
-SBA Loan Data from 2010-2019
-Non-Franchise Businesses taken into account: 10,112
The Travel and Hospitality Industry focuses on services that accommodate people typically leaving their current place of residence for a short period of time. This is typically for leisure as a vacation but could also be a business trip or other purpose for travel. Travel and Hospitality are also commonly recognized as the tourism industry.
The Travel and Hospitality industry has grown tremendously over the last few years as flights have become more affordable and people are more interested in spending their money on experiences over products. People are also inclined to travel as it is often promoted and shared within social media. According to the International Trade Administration,
Franchises in this space include but are not limited to hotels, travel agencies, and resorts. Within this industry, it is important for customers to find the best accommodation services to fit their needs. Some travelers are looking for places with more facilities and amenities for their entire family, while others may only be looking for a comfortable place to sleep away from home. With so many options available, travel agencies can support travelers find the best lodging for their budget and travel purposes. They can also help them create an entire travel plan from start to finish.
The digital landscape has shifted the Travel and Hospitality industry as people are now able to compare flights, lodging, and more with the click of a button. However, there are many other details travelers need to consider that they may not have the time for, in which a franchise travel agency will be able to support them.
Now, hotels must compete with online marketplace platforms like Airbnb. But there is still a large market of tourists and travelers who prefer staying in well-known hotel chains and concepts, for comfort and safety. Even if they are in a location far from their home, they can find a sense of familiarity within a hotel chain.
Another growing market within travel and tourism is cruises. Cruises are extremely popular as a “getaway” vacation as it is also accommodating to all ages. One of the largest markets for cruises is seniors 65 years or older who also have more time and disposable income to spend on these types of leisure activities.
Vetted Biz has reviewed over 2,900 businesses and franchises with 1,700 in our portfolio as viable investment opportunities. Of the businesses reviewed in the travel and hospitality industry, we have seen probably the widest range of investment amounts within this industry, from a small at-home travel agency starting at $1,795 to a full-sized hotel and resort complex at $220,133,000. On average, the royalty fee is around 5.2% and the marketing fee is approximately 2.3%.
Average Travel & Hospitality Percentage Fees
Standard Travel & Hospitality Franchise Industry Investment
This metric is the standard industry investment amount for a single unit franchise investment in this industry. Our research and analytics team analyzed over 79 franchise concept investment breakdowns in order to calculate this figure.
The Paid-in-Full Rate is when the SBA loan is fully paid off by the franchisee including interest, indicating financial strength.
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the franchisee.
For every 66 SBA franchise loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
-SBA Loan Data from 2010-2019
-Franchise Businesses taken into account: 5,274
Learn more about the Travel & Hospitality Industry
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