Hotels (except Casino Hotels) and Motels — U.S. Industry Primer

NAICS 2022 code 72111

(NAICS = North American Industry Classification System, the standard code set the U.S. government uses to group businesses. A five-digit code like this one is a "NAICS industry"; the six-digit codes beneath it are "national industries.")

Short page — single-child pass-through. This five-digit industry (72111) contains exactly one national industry beneath it, 721110, and the two cover the same businesses. Everything of substance — the four-party brand/owner/operator structure, the public and private ways to invest, and the demand, regulation, and risk picture — is in the 721110 primer. This page gives the level's own headline stats and points you there.

1. Overview

NAICS 72111 is the business of renting rooms by the night: full-service hotels, limited- and "select-service" hotels, resorts, and roadside motels (casino hotels are a separate code). Rooms are the core product, but these establishments also sell food and drink, meeting space, parking, and recreation [3]. Because this five-digit industry has only one child, its scope and figures are effectively identical to code 721110 — read that primer for full detail.

The single most important idea to carry into it: the famous names — Marriott, Hilton, Hyatt, Wyndham — usually do not own the buildings that carry their signs. A brand licenses the name and reservation system, an owner holds the real estate, and an operator runs day-to-day. That split is why there are two very different ways to invest — buying the fee-collecting brand companies, or buying the hotel real estate (directly or through a REIT) — with very different economics [5].

2. What's inside — and why this level equals its one child

The 72111 industry contains a single national industry:

There is no second child to blend in, so the rollup is a pass-through: 72111's definition, dollars, and dynamics are 721110's. For context, 72111 sits under the broader group 7211 (Traveler Accommodation), whose other members — casino hotels (721120) and "other" lodging such as bed-and-breakfast inns and hostels (72119) — are excluded here and carry their own totals [3].

3. How big it is

Federal statistics for this five-digit industry (our ground-truth figures; dollar amounts reported in thousands and converted). Because 72111 has one child, these match the 721110 numbers.

Undercount caveat. These payroll-based counts capture employer businesses well — hotels are overwhelmingly private, taxpaying, employer firms, not a hobbyist or government-dominated sector — so the level is not meaningfully undercounted. The genuine measurement subtlety is different: the $206 billion is revenue booked at the hotels themselves (rooms, food), not the fee revenue of the big brand companies, which is booked under their corporate structures in other codes. So the brand giants' influence is far larger than these establishment totals suggest. Establishment and firm counts also do not equal the number of properties, rooms, or ultimate real-estate owners.

4. Investable universe — where value concentrates

With one child, all of the value sits inside 721110, split into three groups (full tables and tickers are in that primer):

• Brand companies ("asset-light" franchisors) — license brands, run loyalty programs, collect royalty and management fees; own little real estate. This is where the largest public market values sit.
• Hotel real estate investment trusts (REITs) — own the buildings, hire brands and managers, and pass most income to shareholders as dividends.
• Private owners — the majority of the industry: tens of thousands of independent and franchisee owners, third-party management companies, and private-equity/real-estate funds [7][4].

5. How the money works

A hotel sells a perishable service — an unsold room tonight cannot be sold tomorrow — so pricing and occupancy shift constantly. Performance runs on three numbers: occupancy (rooms sold ÷ rooms available), ADR (average daily rate = room revenue ÷ rooms sold), and RevPAR (revenue per available room = occupancy × ADR, the headline efficiency measure) [7]. Hotels carry high fixed costs and high operating leverage: a building and staff must be paid whether occupancy is 55% or 75%, so profits swing hard with RevPAR — the core reason the business is cyclical. The brand companies instead earn fee-based, capital-light income, which holds up better in downturns. See 721110 for the full economics.

6. Demand drivers

Room demand comes from leisure travel, business/corporate travel, meetings and conventions, international inbound visitors, and project-based lodging (healthcare, construction, government, emergencies). It tracks the broader economy closely because lodging is discretionary for both households and companies, and it is sensitive to interest rates (which drive both new supply and financing costs) . Full detail — including the soft-inbound-but-recovering-group-demand picture heading into 2026 — is in 721110.

7. Regulation

Hotels are regulated as public accommodations and local real estate, not as a financial industry. Key touchpoints: the Americans with Disabilities Act (ADA, accessibility) [12]; the Federal Trade Commission's "junk fees" rule requiring all-in pricing for short-term lodging, effective May 12, 2025 [10]; the FTC Franchise Rule governing brand-to-owner disclosures [11]; state and local transient occupancy ("bed") taxes; and local labor, zoning, fire, health, and liquor rules. See 721110 for specifics.

8. Consolidation

Consolidation has been mostly a brand-side story — Marriott's 2016 purchase of Starwood created the world's largest hotel company, while Choice's ~$8 billion hostile bid for Wyndham collapsed in March 2024 [13]. Even as brands consolidate, property ownership stays highly fragmented (44,768 firms) [1]. Federal concentration ratios for this level describe the owning/operating side and look only moderately concentrated: the top four firms held 18.2% of receipts, the top eight 23.0%, the top twenty 30.5%, and the top fifty 38.3% in 2022 [1]. The Herfindahl-Hirschman Index (HHI, a standard concentration measure) is suppressed in the federal extract, so no value is stated. The branding side is far more concentrated than these ratios imply.

9. Risks

The main risks are the same as 721110's: cyclicality and operating leverage (2020 showed the tail risk); rising labor, insurance, and property-tax costs; recurring capital demands (renovations, brand-mandated property improvement plans); interest-rate and refinancing risk for leveraged owners and REITs; competition from short-term rentals and online travel agency (OTA) commissions; and, for private owners, illiquidity and execution risk.

10. How to invest and outlook

Because 72111 is a pass-through to 721110, the routes are the same: brand/franchisor stocks for capital-light, fee-based exposure that holds up better in downturns; hotel REITs for direct exposure to the property cycle plus dividend income; diversified travel/leisure ETFs (there is no large pure-play "hotels only" fund); and, on the private side, owning or developing a single franchised hotel, or investing through private real-estate/private-equity funds and passive owner structures. The near-term outlook is low-single-digit RevPAR growth driven mostly by rate rather than occupancy, with restrained new construction supporting pricing; financing cost is the swing factor for owners [14][14]. For the full universe, tickers, and reasoning, see the 721110 primer — this level adds nothing beyond it.

---

Sources

1. U.S. Census Bureau, 2022 Economic Census — Concentration of Largest Firms (EC2200SIZECONCEN), NAICS 721110: receipts $206.19B, 44,768 firms, CR4 18.2%, CR8 23.0%, CR20 30.5%, CR50 38.3%, HHI suppressed (2022). https://data.census.gov/table/ECNSIZE2022.EC2200SIZECONCEN?codeset=naics~721110
2. U.S. Census Bureau, County Business Patterns 2023 (NAICS 721110): 55,895 establishments, 1,497,840 employees, $58.98B annual payroll, $14.29B Q1 payroll (2023). https://www.census.gov/data/datasets/2023/econ/cbp/2023-cbp.html
3. U.S. Census Bureau, NAICS 2022 Definition — 72111 / 721110 Hotels (except Casino Hotels) and Motels; exclusions 721120, 721191, 721199, 7212 (2022). https://www.census.gov/naics/?details=721110&year=2022
4. msourceideas / Umbrex, How the Hotel Industry Is Structured — brands, owners, operators, distribution (2024). https://msourceideas.com/how-the-hotel-industry-is-structured/
5. CoStar, Lenders take majority ownership of Aimbridge in debt restructuring; Aimbridge–Interstate merger (2025). https://www.costar.com/article/28284794/
6. Mews, Types of hotel ownership, management contracts, and franchise disclosure (2024). https://www.mews.com/en/blog/types-hotel-ownership
7. CoStar / STR, U.S. hotels post record ADR ($158.67) and RevPAR ($99.94) in 2024; occupancy ~63% (2025). https://www.costar.com/products/str-benchmark
8. U.S. Travel Association, Travel forecasts — business travel ~$317B (2025), group-travel rebound for 2026, youth-sports travel ~$40B (2026). https://www.ustravel.org/research/travel-forecasts
9. Deloitte / Hospitality Net, Declining international inbound travel — ~$175B in 2025, still well below 2019 in real terms (2025). https://www.hospitalitynet.org/news/4127015.html
10. Federal Trade Commission, Rule on Unfair or Deceptive Fees — took effect for short-term lodging May 12, 2025 (2025). https://www.ftc.gov/news-events/news/press-releases/2025/05/ftc-rule-unfair-or-deceptive-fees-take-effect-may-12-2025
11. Federal Trade Commission, Franchise Rule — required disclosures (FDD) and prohibited conduct. https://www.ftc.gov/legal-library/browse/rules/franchise-rule
12. U.S. Department of Justice, 2010 ADA Standards for Accessible Design — Title III public accommodations (2010). https://www.ada.gov/law-and-regs/design-standards/2010-stds/
13. CNBC / CoStar, Choice Hotels abandons ~$8B hostile takeover bid for Wyndham (2024). https://www.cnbc.com/2024/03/11/choice-hotels-surrenders-its-8-billion-hostile-takeover-attempt-of-rival-chain-wyndham-.html
14. CBRE, 2025 Global Hotel Outlook — modest RevPAR growth (2025). https://www.cbre.com/insights/reports/2025-global-hotel-outlook