Demand for hotel furniture, fixtures, and equipment (FF&E) is soaring. According to the FF&E Market Demand Index (2Q, 2024), published by Wood Couture and TOPHOTELPROJECTS, hotel spending in the Americas will reach nearly $10.2 billion by 2027. The United States is capturing the bulk of that revenue – more than $7.1 billion. Why this incredible growth?
Hotels are innovating their public spaces, guest rooms, and amenities to capture a greater share of the post-pandemic surge in leisure and business travel.
What is FF&E?
FF&E includes the physical items and accessories residing inside hotels, resorts, restaurants, and other hospitality establishments. These items, separate from a building’s structural components, create an inviting, comfortable, and functional environment for guests, says interior design firm VAL Hospitality.
FF&E contributes to a positive guest experience “by creating welcoming atmospheres, ensuring the functionality of amenities, and providing the comfort guests expect,” notes VAL Hospitality. Upgrading FF&E improves the visual appeal of the space while also enhancing brand identity.
How many rooms and when?
Just how many new rooms needing FF&E are planned? The FF&E Market Demand Index reveals that 284,255 rooms are in the U.S. pipeline for construction by 2027. Of those, 202,704 are expected to be four-star, first-class rooms, valued at nearly $4.7 billion, and 81,550 five-star, luxury rooms, valued at $2.4 billion.
Data also disclose that the cost per key for these new rooms varies widely from roughly $16,000 for a “lifestyle” four-star room to over $58,000 per key for an “ultra-luxury,” five-star room in the U.S. and Canada.
FF&E spending: United States by 2027
Source: Wood Couture and FF&E Market Demand Index (2Q, 2024)
New hotel rooms in pipeline
Source: Wood Couture and FF&E Market Demand Index (2Q, 2024)
What drives these innovations, which ultimately spur demand for FF&E? In its report “Hospitality Furniture Market,” Allied Market Research notes that: “Consumers, particularly millennials and Gen Z, increasingly prioritize experiences and aesthetics when choosing hospitality venues. There is a growing demand for unique and stylish furniture designs that contribute to a memorable guest experience.”
Meanwhile, the American Hotel & Lodging Association’s (AHLA) 2024 State of the Industry Report reveals that the hospitality business is booming, particularly events and meetings where “groups will demand memorable events that foster human connections.”
AHLA reports that U.S. hotel occupancy is expected to reach 63.6% in 2024, 3.4% shy of 2019’s recorded level (65.8%) and a significant improvement over 2020’s historic low (43.8%). The 2024 projection for U.S. hotel occupancy is a slight improvement over 2023’s level (62.9%).
AHLA further reports that the preliminary results from the Q4 2023 Encore Planner Pulse survey show that 47% of meeting professionals plan to increase their budgets in 2024, and 40% expect their budgets to remain flat—a similar outlook compared to early 2023.
The survey also found an increased interest in the individual, societal, organizational, and cultural impact of events. How does this play into FF&E upgrades? Eventgoers want more than a white-walled room with an accordion divider. Lush furnishings in communal spaces, relaxing restaurant decors that promote lingering, and theme-inspired bars help satisfy these interests.