Has the financial crisis of 2007-09 negatively impacted the hotels, restaurants and leisure industry?

There has been a recent growth in the hotels, restaurants and leisure industry which basically include casual dining and fast food restaurants, hotels, motels, resorts, cafes, nightclubs, pubs, bars and other leisurely activities. The growth in this industry is directly linked with the growth in personal disposable incomes globally, the reasons for which may be industrialization, urbanization and investments in companies globally. The hotels, restaurants and leisure industry grew by 5.6% in 2011 to reach a value of $2413.9 billion representing a compound annual growth rate of 3.7%. The restaurant industry was the most lucrative in 2011, with total revenue of $1644 billion. This represents the 68.1% of the industry’s total value. A reason for the trend of eating out could also be linked to the fact that people have lesser time to cook home food for themselves and usually prefer take-outs and dining in at their favorite restaurants be they fine dining ones or fast food chains. 

In the wake of the financial crisis of 2007-2009 and the recent economic recessions, the consumer spending on hotels, restaurants and leisure activities declined. This caused the operating costs of these companies to rise. Hence in times of financial distress spending on this industry reduces, while in times where people have greater disposable incomes and lesser debt spending on the hotels, restaurants and leisure industry increases. However this may not be true for all restaurants and hotels, while fine dining places suffer, fast food chains hold up much better in times of economic distress. According to Forbes despite the financial crisis of 2009 McDonalds managed to increase its sales by 7.7% worldwide, 4.5% in the US and 13.2% in the Asian Pacific, Middle Eastern and African market. 

In terms of size, the US fast food industry is the largest in the world, spawning global fast food brands such as McDonalds, Burger King and Subway and dunkin stock. In 2010 only, the fast food industry generated total revenue of $184 billion in more than 300,000 restaurants employing more than 3.9 million people. The influential US restaurants include Chipotle Mexican Grill, Buffalo Wild Wings, Cheddar’s Casual Café, Yard House, Panda Express and the like. There are numerous US restaurants, hotels and fast food chains that are influential and dominating worldwide. When talking about the global hotel industry, these hotels contributed whopping $144 billion of revenue in 2014 alone. Additionally, the annual growth rate of the hotel industry from 2009-2014 was 2.5% on average. It is predicted that over the next five years the hotels industry will expand as operators invest in boutique hotels, spa resorts and overseas operations. Marriot International, Hilton Hotels and Intercontinental hotels are the global markets leaders in the hotel industry. When looking at the US specifically, it is believed that the hotels industry is doing exceptionally well and there shall be no second hotel recession as there was previously. This can be said with certainty because there are a large number of business travelers as well as tourists to the US every year. The business travelers prefer Hilton Hotels while Marriot Hotels attract the leisure travelers.