MARKET: Definition & Size

Provide a very specific definition of your relevant market. Who are the people with willingness and ability to buy your product? List parameters that you are using to define the market (e.g., B2B or B2C, geographic, economic, demographic, any other descriptors). 

 

The travel and tourism industry is a 12 billion dollar industry for Atlanta.  Key lodging indicators suggests that Atlanta’s lodging market shows excellent growth potential and as such, should support the proposed venture.  Specifically, tourism related activity across the Atlanta region remains strong, spurred in part by a strong economy and the development of various new entertainment and attractions venues (such as the College football Hall of Fame, the new baseball and NFL football stadiums) which collectively have increased demand for leisure travel and business.  For example, at the end of 2014, Atlanta hotels were forecasted to experience a revenue per available rooms (RevPAR) increase of 12.7%. This is the result of an estimated increase in occupancy of 7.3% and a 5.0% gain in average daily room rates (ADR). The 12.7% growth in Atlanta’s RevPAR is better than the national projection of an 8.6% increase. Atlanta’s (revenue per available room (RevPAR) is expected to grow 6.0% through 2015. Specific lodging related projections for 2016 to 2018 are: 2016(ADR growth rate of 5%; RevPAR growth rate of 5.2%); 2017 (ADR growth rate of 4.2%; RevPAR growth rate of 3.2%); 2018 (ADR growth rate of 3.6%; RevPAR growth rate of 2.6%) (PKF Hospitality Research [PKF], 2015). 

The market is defined geographically, more specifically, the market can be defined as the Atlanta lodging Market. 

For your defined market, estimate market size in dollars (number of users X price per unit X usage rates). Invent and describe your methodology for making estimates on "number of users", "usage rates", and "price per unit". 

The Atlanta travel market exceeds 42 million travelers annually.  For the lodging industry, market size data can be obtained from each city’s convention and visitors’ bureau.  It can also be obtained from Smith Travel Research (STR) which collect daily lodging data.  Number of users is estimated based on averages obtained from Smith Travel Research, the premier data collection company for the lodging industry.  STR collects data on each lodging type, for each city and geographic region in the US and in several markets overseas.  Price per unit for the lodging industry is simply, average daily rates (ADR).  This is changed on a daily basis based on supply and demand.  Thus, price per unit for the lodging industry is always in flux.