Luxury Hotel Market Expected to Reach $181.5 Billion by 2034

According to a new report published by Allied Market Research, titled, “Luxury Hotel Market," The luxury hotel market size was valued at $113.1 billion in 2024, and is estimated to reach $181.5 billion by 2034, growing at a CAGR of 4.9% from 2025 to 2034.

The rise of bleisure travel—where business and leisure converge—is significantly reshaping the luxury hotel industry. As professionals increasingly extend their business trips to include leisure time, luxury hotels are uniquely positioned to cater to this evolving demand. These travelers seek not only high-speed connectivity and well-equipped meeting spaces but also spa services, fine dining, and curated local experiences—all under one roof. Luxury hotels that offer a seamless blend of work and relaxation are becoming the preferred choice, especially among executives and entrepreneurs who value comfort, privacy, and premium service. Additionally, remote and hybrid work models have blurred the boundaries between work and vacation, encouraging longer stays at high-end properties. Hotels are responding with flexible check-in policies, customized wellness packages, and co-working lounges that cater to both productivity and indulgence. This shift is not only driving higher occupancy rates but also increasing per-guest spending, making bleisure travel a key factor for the luxury hospitality segment.

However, volatile international travel policies significantly restrain the growth of the luxury hotel market by creating uncertainty for both travelers and operators. Frequent changes in visa rules, quarantine mandates, or entry restrictions—especially since the COVID-19 pandemic—have discouraged high-spending international tourists from making long-term travel plans. For instance, IATA reported that in 2022, global passenger traffic remained 27% below 2019 levels, largely due to inconsistent government regulations. Luxury hotels, which heavily depend on affluent international travelers, especially in tourist hubs like Paris, Dubai, and Bangkok, face revenue dips when these travelers delay or cancel trips. Moreover, the administrative burden of policy compliance increases operational costs for hotels. These disruptions limit occupancy rates, hinder forward bookings, and reduce confidence in the luxury travel segment’s reliability, making recovery uneven across regions.

Experiential micro-destinations present a significant opportunity in the luxury hotel market by catering to the growing demand for authentic, intimate, and culturally immersive travel experiences. Unlike mainstream tourist hubs, these lesser-known locations—such as remote coastal villages, mountain retreats, or heritage towns—offer exclusivity and personalized engagement with local traditions, nature, and community. Luxury travelers increasingly seek meaningful experiences over conventional luxury, making micro-destinations ideal for bespoke accommodations that integrate regional architecture, cuisine, and activities. Developing boutique resorts or eco- luxury lodges in these areas allows hotel brands to differentiate themselves and tap into new market segments. Additionally, such destinations often face less competition and have lower land and operational costs, enabling better margins and long-term brand loyalty. As high-net-worth individuals prioritize privacy, sustainability, and unique storytelling, experiential micro-destinations offer a compelling way to deliver all three, positioning luxury hotels as curators of once-in-a-lifetime experiences beyond traditional urban or resort settings.

By type, the business hotels segment held the major luxury hotel market share in 2024. These hotels cater to executives and professionals with tailored amenities such as high-speed internet, conference rooms, express check-in, and proximity to business districts. Despite temporary slowdowns due to remote work trends, business travel is rebounding, especially in financial and tech hubs. The segment is expected to retain its dominance during the forecast period, supported by growing international trade, resumption of in-person conferences, and demand for premium accommodation that blend work and comfort.

By category, the chain segment dominated the luxury hotel market in 2024 and is anticipated to maintain its dominance during the forecast period. Chain hotels benefit from strong brand recognition, standardized service quality, loyalty programs, and extensive global reach, making them a preferred choice among both business and leisure travelers which is expected to boost the luxury hotel market growth. Its financial stability and ability to invest in technology, sustainability, and staff training further strengthen market hold. Major players like Marriott, Hilton, and Hyatt continue expanding their luxury portfolios in

emerging economies, by enhancing guest experiences with innovations like mobile check-ins and AI-driven services, thus reinforcing their competitive edge.

By region, North America dominated the luxury hotel market in 2024 and is anticipated to maintain its dominance during the forecast period. The U.S., in particular, accounts for a significant share due to major metropolitan hubs like New York, Los Angeles, and Chicago, which attract both leisure and corporate travelers. The region also leads in adopting smart technologies and sustainable practices, thus enhancing guest experiences in luxury properties with the ongoing luxury hotel market trends.

The luxury hotel market is segmented into type, category, and region. By type, the luxury hotel market is segmented into business hotels, airport hotels, suite hotels, resorts, and others. By category, the luxury hotel market is divided into chain hotels and independent hotels. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Key players in the luxury hotel market report include Kempinski Hotels SA, InterContinental Hotels Group, Hyatt Corporation, The Indian Hotel Companies Limited, Jumeirah International LLC, Four Seasons Holdings Inc., ITC Hotels Limited, Jardine Matheson Holdings Ltd, Marriott International Inc., and Shangri-La International Hotel Management Ltd.

Key Findings of the Study

• By type, the business hotels segment was the highest revenue contributor to the market in 2024.
• By category, the chain segment was the highest revenue contributor to the market in 2024.
• By region, the North America was the highest revenue contributor to the market in 2024.