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I'd like to know the market share of hotel property management systems in the US and worldwide
Hello! Thank you for your question about the market share of hotel property management systems (HPMS) in the U.S. and worldwide. The short version is that after searching extensively through market research reports, I was unable to find statistics on the market size of HPMS in the U.S., though the data was available for the global market. Likely, this is because the top software makers are global companies and they have not publicly reported their sales segregated by country. I was also not able to find quantitative data on the market segment called "boutique hotels," though I did find some qualitative information that you may find useful.
In brief I was able to learn that the global HPMS market is estimated to be $3.6-3.8 billion with approximately 187,000 hotels using HPMS worldwide. Globally, the top 10 vendors by market share are:
1. Amadeus - 7%
2. Sabre (makers of SynXis) - 7%
3. Oracle (makers of MICROS) - 6%
4. Intuit - 4%
5. Salesforce - 4%
6. Sage (makers of ACCPAC)- 3%
7. SAP (makers of SAP Hotels)- 3%
8. Microsoft (makers of Microsoft Dynamics) - 3%
9. Agilysys - 2%
10. Infor (makers of Infor Hospitality)- 2%
Below you will find a deep dive of my findings. Thank you for the opportunity to research this topic.
METHODOLOGY
I focused on searching for market research reports within the last 2 years that quantitatively define the market size (in terms of numbers and dollars) of the hotel property management systems and software. IBIS, Apps Rule the World, Infor, and Grant Thorton are the four organizations I found that have recently published such a report. Their reports included information on market penetration and size that was segmented by country, however, the breakdown of market share by company was only reported in global terms. I did learn, however, that the U.S. is a top country in terms of penetration of the market, which means it's possible that the global data outlined below, can be quite similar to what occurs in the U.S. The reports also did not segment the quantitative data on market share by hotel type, though many trends on various other segmentations such as size, were included. To give you some sense of the market for boutique hotels, I included some qualitative information.
SIZE OF THE OVERALL MARKET
In 2015, the estimated size of the hotel property management software industry worldwide was $3.6-$3.8 billion. The report "Emerging Clouds in Hotel Technology" estimates this includes 187,000 hotels and forecasts a growth rate of 17% from 2015-2018. According to the report, it is estimated that the current penetration of HPMS in the U.S. hotel industry is as high as 80-85%, while penetration is somewhat lower in countries, such as Italy and Germany, which have many more smaller, independent hotels.
THE TOP PLAYERS
Apps Run the World performs market research in order to determine the market share of particular software and other software application statistics. According to their 2015 report, "Top 10 Leisure & Hospitality Software Vendors and Market Forecast 2015-2020", the top software company was Amadeus with 7% of the market share and $350 million in revenues within the Leisure & Hospitality product sector. A summary of the Top 10 follows, including percentage of the market share and recent developments follows:
1. Amadeus - 7% - acquired Navitaire from Accenture in Jan. 2016
2. Sabre (makers of SynXis) - 7% - acquired TrustHouse for hotel reservation system in Europe
3. Oracle (makers of MICROS) - 6% - counting on Cloud sales to offset eroding license sales
4. Intuit - 4% - converted QuickBooks customers to subscription-only model
5. Salesforce - 4% -acquired Demandware in May 2016
6. Sage (makers of ACCPAC)- 3% - aligned with Salesforce for Cloud innovation
7. SAP (makers of SAP Hotels)- 3% - acquired Concur, causing its subscription revenues to soar
8. Microsoft (makers of Microsoft Dynamics) - 3% - June 2016 announced plans to buy LinkedIn, which will strengthen its Cloud applications market
9. Agilysys - 2% - SaaS revenues have increased 27% year over year
10. Infor (makers of Infor Hospitality)- 2% - acquired GTNexus for eMarketplace solutions in 2015
This accounts for 41% of the leisure and hospitality market, with hundreds of smaller applications making up the remaining 59% of the market worldwide.
Another report by Infor titled, "Vendor Landscape: Hotel Management Property System" examined the top software performers in a qualitative, rather than quantitative way. According to their assessment, these are the top 5 vendors:
~ Agilysys
~ Micros (Opera, being one of its most popular solutions)
~ Cenium (which is developed on Microsoft Dynamics)
~ Infor (has a wide variety of solutions)
~ PAR-Springer Miller (its flagship product is SMS Host, and it has recently developed a more affordable and scalable Cloud-based solution called Atrio.)
"Emerging Clouds in Hotel Technology" categorized the top software companies by their reach, with the top global players being Oracle (Micros) and Infor. Regional players include Protel, Itesso, and PAR Springer Miller. It also listed top national performers in the following countries:
~ UK - Guesline
~ France - Quathore/Vega
~ Italy - GP Dati
~ Spain - Tesipro
According to them, many new vendors, who mainly focus on cloud start-ups, market their solutions to both chain and independent hotels, and tend to become popular in limited hotel segments instead of across the industry.
HPMS MARKET CHARACTERISTICS
~ Hotel Size: Hotel size is perhaps one of the most significant factors, with hotels having less than 20 rooms being much less likely to have a PMS, whereas nearly 100% of large hotels (>100 rooms) have a PMS.
~ Ownership: Hotel chains are more likely than independent hotels to have PMS and can often have stipulations within the franchise to have a PMS, sometimes even from a designated supplier.
~ Star Rating and Facilities: Hotels rated 3 stars and higher are more likely to have a PMS. Their wider array of facilities can increase their need for this type of management system.
~ Occupancy: Occupancy rates of less than 30% and seasonal hotels are less likely to have a PMS.
~ Location: Hotels in metropolitan areas are more likely to have PMS due to their tendency to have more online bookings, which translates to savings when using a PMS.
Boutique Market:
Segmentation by "boutique hotel" was not broken out in the statistics found on HPMS, however, I was able to find some baseline figures on the industry itself as well as some qualitative information on HPMS for boutique hotels.
According to the IBIS Market Research Report, "Boutique Hotels in the US" , the boutique hotel industry, which includes "intimate, luxurious and upscale hotel environments that feature unique architecture and design", is a $7 billion industry, with approximately 1,500 businesses in the U.S.
There are tools, blogs, and articles that comment upon using HPMS within boutique hotels. One comprehensive resource located was softwareadvice.com whose business is to review various software and make recommendations. They have 69 boutique hotel management software in their database. They cite the following as some of the highest rated: Maintenance Connection, Propertyware, innRoad, frontdesk Anywhere, Bigfoot, Webrezpro, InnQuest Software, RoomKeyPMS, GuestPoint, Resort Data Processing, Skyware, and Maeistro.
FUTURE GROWTH OF THE HPMS MARKET
Despite the high penetration of the market, opportunities for the HPMS market are expected to continue to grow. Apps Run the World forecasts that the Leisure & Hospitality applications market is expected to reach $5.5 billion by 2020, compared with $4.9 billion in 2015 at a compound annual growth rate of 2.4%. There are several reasons for this. One is cloud-based technology. This approach is continuing to grow and become more popular in the hotel industry, and some say that the industry is at the tipping point for adoption of cloud-based solutions. One researcher predicted that cloud-based PMS would account for the bulk of new IT spending in 2016. It is also predicted this this segment will continue to show strong growth in the next 2-3 years.
Another source of opportunity is the replacement of on-site systems. For major hotel chains, this occurs on a 5-7 year cycle, while it is a 10-15 year cycle for independent hotels. Consolidation of hotel companies can also be another driver because when two companies merge a new solution can often be required in order to merge data management. Expansion into online booking is another factor causing the need to upgrade.
CONCLUSION
To wrap it up, globally the HPMS market is $3.6-3.8 billion, with approximately 187,000 hotels using HPMS worldwide. The top vendors by market share are Amadeus, Sabre, Oracle, Intuit, Salesforce, Sage, SAP, Microsoft, Agilysys, and Infor. After extensively researching your questions, the market share for the U.S. and boutique hotels was not publicly available because the data has not been publicly reported by these segmentations, though we know that there are high numbers of HPMS users in the U.S., so the top vendors are probably similar to the top vendors globally. I did learn about top software, using qualitative information, for boutique hotels.
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