With economic growth, particularly in developing countries, such as Brazil, China, Thailand, Indonesia, and India, the disposable income of people is rising. Along with this, the development of commercial infrastructure, including office buildings, recreational zones, and hypermarkets/supermarkets, is being strongly pursued, majorly to cater to the rising urban population.
Both these factors are expected drive the uptake of commercial air conditioners (AC) to 25.4 million units by 2030. The rise in the sales volume of the global commercial AC market, which stood at 17.6 million units in 2019, will be at a CAGR of 3.5% between 2020 and 2030 (forecast period).
In 2030, the variable refrigerant flow (VRF) division is projected to hold the largest share in the commercial AC market, in terms of sales volume, on account of the fact that compared to other cooling appliances, they are easier to install, cost-effective, and energy-efficient. Because of their lower power consumption and more-effective cooling, they are swiftly replacing chillers in commercial spaces.
New installations dominated the commercial AC market during the historical period (2014-2019), because new infrastructure projects are being initiated in preparation for upcoming events and as part of the development of smart cities. With new buildings coming up, the demand for new AC installation is also increasing around the world.
During the forecast period (2020-2030), the hospitality division would witness the highest CAGR, of 4.7%, in the commercial AC market, as the tourism sector is growing. According to United Nations World Tourism Organization (UNWTO), international tourism activities rose by 7% in 2017, compared to the previous year, and the trend is projected to continue in the near future. FIFA World Cup 2022 and 2026 as well as World Expo 2020 are expected to bring loads of people to the host countries, to cater to whom hotels are being constructed, which will create a high demand for commercial cooling systems.
In 2019, Asia-Pacific (APAC) was the largest commercial AC market, owing to its rapidly increasing population, especially in urban areas, which is making infrastructure development necessary. For instance, according to the World Bank, the urban population of India, which was 27.8% of the total in 2011, rose to 34% by 2018. The other important reason for the high demand for cooling equipment in the region is the surging purchasing power of people and average temperature.