III. Industry Analysis
[Company Name]directly or indirectly competes with all Bed and Breakfasts nearby our Bed and Breakfast locations. Competition will come from inns, motels and hotels.
Industry Statistics & Trends
The Bed and Breakfast and Hostel Accommodations industry is expected to perform at a slightly slower rate over the five years to 2021 than the past five-year period. The resurgence of travel rates since the recession is expected to continue, while travel spending is projected to increase over the next five years as the economy improves. Consumer spending is expected to increase 2.4% per year on average over the next five years. IBISWorld estimates that over the same period, international arrivals will increase at an average rate of 4.4% per year, while domestic travel will increase an average of 1.6% per year. The influx of tourist dollars will likely bolster revenue for bed and breakfasts (B&Bs) and hostels.
However, heavy competition from alternative forms of accommodation, particularly those facilitated by websites like Airbnb, will continue to weigh the industry down and lower growth rates. While it is unlikely that a mass exodus of enterprises leaving the industry to operate exclusively through Airbnb will occur, a number of nonemploying establishments that are unable to afford the investment it takes to develop a large and effective internet presence may exit to capitalize on Airbnb’s exposure. Furthermore, as millennials comprise a larger portion of the workforce and, in turn, consumer spending, many larger hotel chains have also expressed interest in entering the Bed and Breakfast and Hostel Accommodations industry to increase their overall market share in the travel accommodation sector. These trends are expected to result in slower revenue growth over the next five years, despite relatively consistent trends that are expected to facilitate growth. Over the five years to 2021, revenue is forecast to increase an annualized 1.9% to $3.2 billion.