Growth in hospitality sector creates new opportunities for the furniture industry

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According to recent CSIL research carried out with focus on 16 Western pean countries, the total value of the European market for contract furniture and furnishings in 2016 was euro7.5 billion while total production was 9 billion.

The sector was expanding in 2016 with yachting, luxury retail, and the hospitality sectors (hotels, bars and restaurants) being the fastest growing segments while sectors dependent on public funds, such as schools and hospitals, were much less dynamic.

CSIL has also carried out detailed research on the global development of hotel rooms, a sector significant for tropical hardwoods due the relatively large amount of higher end furniture and finishing materials used. CSIL estimate that in 2016 the total global stock of hotel rooms was 16 million with most recent growth in the Asia-Pacific region.

Between 2012 and 2016, the share of hotel room in the Asia Pacific region increased from 22% to 26%, while the share declined in pe from 30% to 28% and in North America from 41% to 38%. The share of hotel rooms in Africa, the Middle East, and South and Central America remained stable with values ranging between 3% and 5%.

CSIL estimate that 650,000 hotel rooms were under construction globally in 2016, of which 40% were in AsiaPacific, while North America accounted for 29% and Europe only 10%. However, demand for new hotel rooms is expected to remain high in all regions with the glow flow of tourists forecast to increase 3% per year on average until 2030.

While Asia-Pacific has seen the most recent growth, the US continues to be the leading world market for hotel furniture and furnishings, accounting for 36% of total global demand in 2016. The Asia-Pacific region is now the second largest market, accounting for 28% in 2016, overtaking Europe which accounted for 26%, followed by Africa and the Middle East (7%), and Central and South America (3%).

Total sales of hotel furniture and furnishings were at a similar level in the United States and China in 2016, in the region of US$5 billion in each country.

Other large markets with demand between US$1 billion and US$5 billion are Germany, the UK, Japan, Canada and Russia. Countries currently with smaller markets but where demand is rising rapidly include Australia, UAE, Thailand, Indonesia, Singapore, and the Philippines.

CSIL estimates that the rate of worldwide construction of hotel rooms is likely to have increased nearly 10% in 2017 to 710,000, with Asia-Pacific accounting for 37% of the total, North America for 33%, the Middle East for 12%, Europe for 10%, Africa for 5% and South America for 4%. CSIL expect that this rapid rate of growth will continue in 2018.

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