High investments in construction projects that stem from rapid urbanization, the promising tourism industry, and the expansion plans of a variety of commercial establishments, like hotels and spas are among others expected to lead to a global towel warmer market growth. From the perspective of the tourism sector of the European Union (the EU) which reportedly contributes to 10% of the gross domestic product (GDP), the commercial application segment of the market is expected to hold a robust share of the market. In view of above its contextually pertinent to note that in 2018 the number of international arrivals registered in the EU was 536 million which accounted for 30% of global receipts. Additionally, a strong economy, high investments in R&D leading to digital innovations, and the rising capacity of consumers to avail a variety of services associated with tourism has the potential to drive the demand for bathroom fixtures like towel warmers which in turn would facilitate the growth of towel warmer market.
Final Consumption Expenditure of Households by Consumption Purpose, Restaurant and Hotels
In millions of euro at current price (EU-28 COUNTRIES)
The tourism industry is expected to drive the growth of the global towel warmer market
As an export category, tourism is the 4th largest which reportedly leads to a myriad of advantages to the entire economy of the EU. It has been reported that an additional 56 cent of value-added in indirect effect on other industries has resulted from the generation of 1 EUR of value added by tourism. Further, at least one personal tourism trip has been undertaken by 64% of the EU residents. Further in 2018 around 1.1 billion trips with overnight stays were made by the EU residents amongst which 7 out of 10 trips have been spent in their own country of residence. Additionally, stays in other European countries Europeans during 2018 lasted on an average of 1 week. Further irrespective of the losses incurred by a variety of establishments due to the COVID 19 pandemic, a few prominent hotel chains have announced their plans to invest in expansion strategies to increase their regional presence. With plans to operationalize 50 hotels under a variety of brands in Romania, French hospitality group Accor has announced its plans for expansion with 7 new properties to be established in 2020. In January 2020, it was announced that NH Hotel Group had entered into an agreement with Covivio which is known to be key European real estate operators. This agreement will reportedly consolidate NH Hotel Group’s commitment to the luxury hotel segment concomitantly the reinforce its position in the competitive markets of eastern Europe and France as per the company.
Further in February 2020, Dalata Hotel Group has been reported to consider expanding its business beyond Britain and Ireland into continental Europe. In March 2020, EasyHotel which is known to develop, own, and operate ‘super budget’ hotel had reportedly aimed to raise £11m for its international expansion and brand growth. As a part of the European expansion strategy, the group has plans to invest in Spain. On the other hand, tourism is a complex ecosystem of many players, which when coupled with high penetration of internet, adoption of IoT, streamlining of guest experience management, among others have led to robust Smart Hospitality Market around the world. This market has been forecasted by Knowledge Source Intelligence to grow at a CAGR of 13.14% attaining a market size of US$12.727 billion by the year 2025 from US$6.067 billion for the year 2019. This also an example of how the semiconductor industry can positively impact the growth of these markets. These estimates further reassert the potential growth of the tourism industry in the next few years. Moreover, the tourism industry also encompasses a variety of services which necessitate the use of towels making it a strategic imperative to keep adequate provisions for fixtures like towel warmers which is poised to lead to healthy market growth during the forecast period. For instance, the inclination to avail various personal care services such as sauna, massage, as well as rising old age population among others have resulted in the healthy scope of global spa services market which Knowledge Source Intelligence had estimated to be of a market value of US$19.429 billion for the year 2019.
Number of Passengers From Asia Cruising Source Region
Source: APEC Economic Study
The APAC region is expected to hold a substantial share in the global towel warmer market leading to its market growth
As noted by the World Tourism Organization that despite the recovery of international tourism is sluggish, in countries like China the demand for domestic tourism is rising which had registered a rebounder of the national air capacity to approx. 90% of the level of 2019, in July 2020. Moreover, the APAC regions are expected to reach the levels of 2019. Further according to the Asia-Pacific Economic Cooperation (APEC), the APEC economies represented 30.4% of ocean cruising destination passengers. Asia and China represented around 15% of the market share of ocean cruising destinations for passengers. Whereas Asia accounted for around 15% of the source market regions for passengers in 2018. The APEC also notes that global cruise industry capacity based on existing and new cruise ship capacity will grow from 27 million passengers in 2018 to 39 million by 2027 which is almost an increase of 50%. Genting Hong Kong Limited (HKG: 0678) which is a holding company that operates cruise and resort businesses had as of 2017 three brands and 9 ships which accounted for 4.1% of the global cruise industry. Further, the organization has 6 cruise ships on order which would account for 11,400 additional berths. Besides in 2018, Australia had led the percentage of a country’s population cruising in a given year, which otherwise is known as penetration rate which was in the order of 5.4%. With regards to cruise liners, it is important to note that they encompass a diverse range of facilities under one roof which is anticipated to contribute to the global hotel towel warmers market. Further with regards to investments, in September 2020, Aquarius International Hospitality Development (AQI) which is an investment firm based out of Bangkok has reportedly announced the investment of US$250 million into a series of hotel and real estate investments in Southeast Asia and Thailand and as part of its major expansion across the region.