NAICS 721110 Quarterly Industry Report
Hotels (except Casino Hotels) and Motels
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 721110Sector: Accommodation and Food Services (72)Updated: Q1 2026
About This Report
This industry profile for Hotels (except Casino Hotels) and Motels (NAICS 721110) draws on data from the U.S. Census Bureau[6], Bureau of Labor Statistics[10], FRED Economic Data[11], and SBA size standards database[8]. Published by Fair Market Value and updated quarterly, it provides valuation professionals, hospitality analysts, and business brokers with current market data. The editorial analysis reflects the independent assessment of FairMarketValue.com's research team, with all quantitative claims sourced to publicly verifiable databases.
Industry Snapshot
Key metrics for the hotels (except casino hotels) and motels industry.
NAICS Sector
72
Accommodation and Food Services
Industry Definition & Overview
Hotels (except Casino Hotels) and Motels (NAICS 721110) encompasses establishments primarily engaged in providing short-term lodging in facilities operating as hotels, motor hotels, resort hotels, and motels per the U.S. Census Bureau[5]. These properties may also offer food and beverage services, conference rooms, recreational amenities, laundry services, and parking to registered guests.
The Census Bureau[6] reports roughly 56,478 locations operated by about 44,739 businesses employing more than 1.1 million workers. Per FRED Economic Data[7], the 2024 average daily rate (ADR) reached $160.16, while revenue per available room (RevPAR) stood at $101.82 with December occupancy at 53.2 percent. Urban properties typically command ADRs of $140 to $250 per night compared with $90 to $130 for rural locations. Labor costs represent the largest expense category, with housekeeping, front desk, and maintenance staffing consuming 30 to 40 percent of total revenue.
Per the SBA Table of Size Standards[8], the size standard is $40 million in average annual receipts. Brand-affiliated properties carry franchise fees of 4 to 8 percent of gross room revenue plus mandated property improvement plan (PIP) expenditures. Competition from short-term rental platforms has reshaped the leisure travel segment, though business and group travel continues to anchor demand at full-service and select-service hotel formats. Federal ADA compliance[9] requirements apply to all properties built after January 1993, and fire safety mandates require hard-wired smoke alarms and automatic sprinkler systems for buildings over three stories.
What's Included in This Industry
- Guest room rental and nightly lodging services
- Food and beverage on-site operations including restaurants and room service
- Conference and meeting room facilities for business and group events
- Recreational amenities including pools, fitness centers, and spa services
- Concierge, front desk, and guest relations services
- Housekeeping and laundry operations for guest rooms and common areas
- Parking facilities and valet services for registered guests
- Property management and brand franchise compliance operations
- Revenue management and dynamic pricing systems for room inventory
- Sales and marketing including OTA distribution and direct booking channels
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Accommodation and Food Services | 72 |
| Subsector | Accommodation | 721 |
| Industry Group | Traveler Accommodation | 7211 |
| NAICS Industry | Hotels (except Casino Hotels) and Motels | 72111 |
| National Industry | Hotels (except Casino Hotels) and Motels | 721110 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 721120 | Casino Hotels | Casino Hotels combine lodging with on-premises gaming operations, sharing room revenue management and hospitality staffing models with standard hotel properties while adding gaming revenue streams |
| 721191 | Bed-and-Breakfast Inns | Bed-and-Breakfast Inns serve the same traveler accommodation market at smaller scale with personalized owner-operated service models and included breakfast amenities |
| 721199 | All Other Traveler Accommodation | All Other Traveler Accommodation covers guest houses, vacation rentals, and hostels that compete for leisure travel demand through platforms like Airbnb and VRBO |
| 722511 | Full-Service Restaurants | Full-Service Restaurants frequently operate within hotel properties as on-site food and beverage amenities, generating supplemental revenue and supporting guest satisfaction scores |
| 561510 | Travel Agencies | Travel Agencies drive booking volume and group travel demand for hotel properties through corporate travel management programs and leisure travel packaging arrangements |
| 561520 | Tour Operators | Tour Operators package hotel room blocks with transportation and activities, channeling group travel demand to properties in tourist destination markets and convention cities |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 10.6% | 6,033 |
| 2 | Texas | 10.1% | 5,755 |
| 3 | Florida | 6.4% | 3,647 |
| 4 | New York | 4.2% | 2,401 |
| 5 | Georgia | 3.9% | 2,206 |
| 6 | North Carolina | 3.4% | 1,946 |
| 7 | Virginia | 2.8% | 1,600 |
| 8 | Pennsylvania | 2.6% | 1,511 |
| 9 | Illinois | 2.6% | 1,498 |
| 10 | Tennessee | 2.6% | 1,490 |
% Of Establishments
0%
11%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
6,112
Total SBA Loans
$16.4B
Total Loan Volume
$2.7M
Average Loan Size
23 yrs
Average Loan Term
9.04%
Average Interest Rate
72,184
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: Per the SBA Table of Size Standards[8], Hotels (except Casino Hotels) and Motels (NAICS 721110) has a size standard of $40 million in average annual receipts for federal contracting purposes. SBA 7(a) loans[12] support property acquisition, renovation, and working capital for qualifying operators. The five-year averaging method smooths seasonal and cyclical revenue fluctuations common in the lodging sector. Additionally, 504/CDC loans[13] provide long-term, fixed-rate financing for major fixed assets such as real estate and equipment.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | GBank | 1,104 | $3.9B | $3.5M |
| 2 | US Metro Bank | 448 | $1.2B | $2.7M |
| 3 | Shoreham Bank | 280 | $852.7M | $3.0M |
| 4 | Readycap Lending, LLC | 280 | $712.7M | $2.5M |
| 5 | Bank of Hope | 224 | $665.4M | $3.0M |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 721110?
NAICS 721110 covers establishments primarily engaged in providing short-term lodging in hotels, motor hotels, resort hotels, and motels per the U.S. Census Bureau[5]. Properties may range from economy roadside motels to luxury urban hotels. Facilities typically offer guest rooms, front desk services, housekeeping, and may include restaurants, meeting rooms, recreational amenities, and parking. Casino hotels are excluded and classified separately under NAICS 721120.
How large is the U.S. hotel and motel industry by employment and establishments?
The Census Bureau[6] reports approximately 56,478 hotel and motel locations operated by about 44,739 businesses across the United States. Total employment exceeds 1.1 million workers. Major chains including Marriott, Hilton, and IHG operate thousands of branded properties, while independent operators account for a meaningful share of total room inventory particularly in smaller markets.
What are the primary performance metrics for evaluating hotel investments?
Revenue per available room (RevPAR), average daily rate (ADR), and occupancy rate form the core performance triad used throughout the industry. Per FRED Economic Data[7], 2024 national ADR reached $160.16 and RevPAR stood at $101.82. Properties maintaining occupancy above 70 percent with disciplined rate management can achieve net operating income margins of 25 to 35 percent depending on service level and market positioning.
What is the SBA size standard for hotels and motels?
Per the SBA Table of Size Standards[8], the size standard is $40 million in average annual receipts calculated over the preceding five completed fiscal years. Hotels below this threshold qualify as small businesses for federal contracting preferences and SBA-backed lending programs including 7(a) and 504 loans commonly used for property acquisition and renovation projects.
What capital requirements should buyers expect when acquiring a hotel?
Hotel acquisitions involve substantial capital for property purchase, deferred maintenance, and ongoing renovation cycles. Brand-affiliated properties carry franchise fees of 4 to 8 percent of gross room revenue plus mandated property improvement plans (PIPs) that can run $5,000 to $25,000 per room per industry benchmarking data. Labor costs typically represent 30 to 40 percent of revenue, making staffing the largest single operating expense category.
How does location affect hotel valuations and revenue potential?
Location drives both pricing power and occupancy consistency. Urban properties in business districts or near major attractions command ADRs of $140 to $250 per night, while rural and highway properties average $90 to $130 per the Census Bureau[6]. Proximity to airports, convention centers, interstate highways, and demand generators like hospitals or universities affects occupancy stability and reduces seasonal revenue swings.
What regulatory requirements apply to hotel operations?
Hotels must comply with federal ADA accessibility standards[9] for all properties built after January 1993, including accessible guest rooms and visual fire alarms. Fire safety codes require hard-wired smoke alarms in each guest room and automatic sprinkler systems for multi-story buildings. State and local requirements include business licenses, food service permits for on-site restaurants, alcohol licenses, occupancy tax registration, and periodic health and safety inspections.
How has competition from short-term rental platforms affected the hotel industry?
Platforms like Airbnb and VRBO have expanded lodging supply in most U.S. markets, creating price pressure particularly in the leisure travel segment per the Bureau of Labor Statistics[10]. Economy and select-service hotels in tourist destinations face the greatest competitive impact. Full-service hotels with business travel demand, group meeting facilities, and loyalty program networks have proven more resilient. Many hotel operators have responded by emphasizing service quality, flexible cancellation policies, and direct booking incentives.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]Census Bureau data.census.gov
- [7]FRED Economic Data fred.stlouisfed.org
- [8]SBA Table of Size Standards sba.gov
- [9]ADA compliance ada.gov
- [10]Bureau of Labor Statistics bls.gov
- [11]FRED Economic Data fred.stlouisfed.org
- [12]SBA 7(a) loans sba.gov
- [13]504/CDC loans sba.gov
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