Electromechanical devices are elemental in applications used in a variety of industries due to their capability of controlling high power electrical devices by making use of a small amount of power (AC or DC, whichever is applicable). Furthermore, its wide recognition for being highly efficient, energy-friendly and long life has reinforced its demand in a myriad of applications that are inclusive of but not limited to, automotive, computer interfaces, home appliances, industrial process controllers, lighting control systems, motor drives control, protection systems of electrical power systems, telecommunication, traffic control, among others, which in turn is poised to drive the market to new heights. Nevertheless, the employment of solid-state relays (SSRs) as a substitute is expected to hinder the growth of the market to a certain extent.
International Tourism, Expenditures (Current US$)
In Trillions of US$
Source: World Bank
The growing unpredictability of weather stemming from climate change and the rise of temperature in areas that previously never required climate control installations is partly expected to drive the electromechanical devices market during the next few years. Concomitantly increasing the market share of temperature controller applications are factors such as rising urbanization, growing competitive offers made by climate control system manufacturers, among others, and growing disposable income that is expected to further drive the market to new horizons. Moreover, despite the economic slump due to COVID 19, tourism and business travel are expected to rebound when the market normalizes which will in turn lead to high occupancy of the various commercial establishment of all sizes leading to reinstallations as well as new installations. Moreover, the construction industry is also expected to witness a healthy growth due to the planned expansion of businesses as well as a variety of projects that are in the pipeline of several hotel and hospitality businesses. Thus, the aforementioned drivers along with the consequential estimated developments are expected to partly result in the growth of the market share of the end-use industry of consumer electronics.
With regards to tourism it should be noted that according to The World Tourism Organization (UNWTO), 2019 recorded an arrival of 1.5 billion international tourists which is reportedly an increase by 4% from the previous year. This reaffirms the cognition of tourism as the leading and resilient economic sector. Even though the uncertainties of Brexit and collapses of Thomas Cook and other social tensions which 2019 was fraught with ultimately resulting in relatively slower growth impacting developed economies, the estimated growth in the year 2020 is forecasted to 2% to 4% which is substantiated by the latest UNWTO Confidence Index which reflects a vigilant optimism. Further, regionally the Middle East has emerged as the fastest-growing region for international tourism arrivals in 2019 which reportedly grew at almost two times the global average (+8%). On the other hand, with international arrivals growing 55% of the APAC region showed an above-average growth. Additionally, with respect to Europe, despite a relatively slower growth of 4% it continued to lead in terms of international arrivals numbers, which accounted for 743 million international tourists in 2019 that is reportedly 51% of the global market. Arrivals in South America dropped partly due to political and social unrest.
Air Conditioning Machines Comprising a Motor-Driven Fan and Elements for Changing the Temperature and Humidity, Incl. Those Machines in Which the Humidity Cannot Be Separately Regulated; Parts Thereof (Export)
In Thousands of US$
Source: International Trade Centre
Despite the aforementioned uncertainty tourism spending was reportedly strong, with France reporting the strongest increase in international among the top ten markets whereas the USA led the growth in absolute terms. Moreover, with regards to the European Union (EU), the contribution from the tourism sector to its GDP was to the tune of 10% approx., which reportedly made EU the world-leading destinations for tourism. This is further substantiated by the recorded 563 million arrivals and registered 30% of global receipts in 2018. Buttressed with digital innovation tourism also has resulted in spillover effects to the European economy whereby 56 cents of value addition occur as an indirect effect on other industries from the generation of 1 EUR by tourism. On the other hand, 64% of EU residents reportedly invested in at least one personal trip in 2018.
The same year also reportedly recorded 1.1 billion trips with overnight stays which encompassed 7 out of 10 trips spent in their country of residence. Now fast-forwarding to the present, regardless of the downward-draft in the hotel and hospitality business, major hotel chains have plans to expand their physical presence in the coming years. For example, in February 2020, it was reported that Rosewood Hotel Group along with its brands namely KHOS™, New World Hotels & Resorts™ and Rosewood Hotels & Resorts® has reportedly embarked on a growth path with a new opening in the world's most attractive destinations and along with a hand-selected pipeline of projects which includes 10 new hotel transactions in 2019. Again, during the same month, it was reported that French hospitality giant Accor (Euronext Paris: AC, LSE: 0H59) had plans to grow M Gallery Hotel Collection.
Moreover, France's Accor ( Euronext Paris: AC, LSE: 0H59), Singapore's Far East Hospitality, Thailand's Centara Hotels & Resorts (BKK: CENTEL), and U.S.-based Marriott International (NASDAQ: MAR) are moving ahead with their plans of expansions which were initially scheduled to coincide with the staging of summer Olympics in Tokyo. Further, in the same month, it was announced that the largest hotel chain in Colombia, had reportedly raised $8.7 million in a new round of funding which was led by Kaszek Ventures. The hotel that was established in 2018 has now more than 4,500 rooms and the investment will support the expansion of hotels in Colombian and beyond. Moreover, in February 2020, it was announced that Hilton’s full-service Collection brands – Curio Collection by Hilton and Tapestry Collection by Hilton has development plans that include the first opening in Europe by Tapestry Collection and the hundredth property opening by Curio Collection. The 3rd quarter of 2020 will witness the curio collections opening that will reportedly encompass The Emerald House Lisbon, Curio Collection, Navy Pier Chicago, The Fellows House Cambridge. Combining the room number of both the brands they have 120 properties in their pipelines. Therefore, such expansions will not only address the estimated tourist influx but also will result in increasing demand for consumer electronics with climate control applications which, in turn, is expected to drive the growth of the electromechanical relay market to a new echelon.