HVAC Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024-2030)

HVAC Market Trends & Drivers

Increasing Preference for VRF Technology

• The VRF technology can raise and bring down the temperature in different areas simultaneously. This is achieved by controlling the amount of refrigerant that is provided to the fan coil units located in a building.
• This technology provides several benefits, such as cost-effective installation, energy savings, and design flexibility.
• The real estate market and regulatory environment are evolving, with sustainability having a considerable impact on the value, operating costs, and marketability of properties. Buildings that are environment-friendly and suit the requirements for health, safety, and comfort are becoming increasingly popular.
• The environmental and financial implications of depending on fossil fuels and inefficient systems will increase as the focus on decarbonization and cleaner air rises.
• VRF systems heat and cool buildings more cleanly and efficiently than conventional thermal control technologies.
• Since they are completely powered by electricity, they allow for a reduction of operating costs and improvement of occupant comfort without the combustion of fossil fuels. This also allows building owners and managers to achieve sustainability and the now-prestigious green certifications.
• Furthermore, the integration of IoT in HVAC systems is a major opportunity for appliance manufacturers. IoT helps in managing control systems, collecting data that it stores in the cloud, as well as upgrading temperature control processes for improved efficiency, and running a predictive maintenance plan.
• IoT sensors, in particular, can help improve indoor air quality (IAQ). Constantly monitoring humidity, temperature, CO2, volatile organic compound (VOC), and noise levels can enhance the equipment’s comfort score, by pointing out issues that might harm work settings without immediate addressal, particularly in commercial facilities. As a result, IoT sensors are installed uniformly throughout facilities to track and control pollution levels and air quality.

Growing Hospitality Industry Drives Market

• Hotel transaction volume across Europe reached just over $6.87 billion during the first six months of 2022. With almost $1.98 billion of transacted value, the U.K. remained the most-active hotel investment market in Europe during the first half of 2022 (+40% compared to H1 2021).
• Investors have shown continued confidence in the U.K.’s core markets, with several notable portfolio deals being closed, such as Tristan’s acquisition of a majority stake at Point a Hotels and KSL’s investment in Pig Hotels U.K. (brokered by Cushman & Wakefield).
• Moreover, in France, the strong attractiveness of the Parisian hotel market and the popularity of resorts have allowed for the healthy growth of transaction activity during H1 2022, with the value reaching nearly $921 million (+10%).
• Noteworthy deals include Club Med Alpe d'Huez, Club Med Grand Massif Samoëns Morillon, and Crowne Plaza Paris Neuilly (brokered by Cushman & Wakefield).
• Additionally, with about $730 million of transaction value during H1 2022, Germany stands among the top five most-active markets in Europe.
• Overall, the top five European hotel markets in H1 2022 (the U.K., Spain, Italy, France, and Germany) accounted for about 81% of the transacted value, compared to 68% in H1 2021.
• Moreover, due to the presence of beaches and heritage places, APAC is one of the most-famous tourist destinations. Moreover, it is preferred since it is cheaper than other travel destinations.
• Many countries are revoking the travel restrictions imposed during the pandemic and promoting tourism. For instance, Thailand’s government plans to revise immigration rules to make it convenient for long-term tourists to stay in the country, as part of a strategy to boost investment and tourism revenue once the pandemic eases.
• Similarly, the Philippines is famous for its pristine white beaches. With the ease in travel restrictions, over 100,000 fully vaccinated tourists arrived in the country from visa-free countries and regions in March 2022. With the gradual reopening of tourism, thousands of Filipinos found employment.
• Moreover, with the reduction in the infection count, the country is reopening to tourists, which hints at a massive demand for HVAC systems at hotels, resorts, entertainment venues, amusement parks, and other facilities associated with recreation and leisure.

High Upfront Cost

• The high upfront cost is a key factor hindering the market growth. In buildings requiring the deployment of multiple HVAC systems, the complexities associated with the installation process are significant.
• The pipework and specific installation requirements of ducted systems which vary based on different manufacturers, make initial installation a complex, tedious, and costly job.
• Furthermore, the life expectancy of an HVAC system depends on its proper installation, which is the most complex step of the whole process. HVAC systems especially VRF systems require regular inspection and maintenance by trained personnel, due to their complicated design.
• Moreover, with superior control of these systems, piping and control systems must be installed as per manufacturers’ specific instructions.
• Pressure testing, changing of filters, and cleaning of fan coils are very critical for the maintenance of HVAC systems. Thus, high maintenance costs due to the complicated design of HVAC systems may restrict the market growth during the forecast period.

HVAC Systems & Services Industry Outlook

Offering Insights

• The services category is projected to grow at a higher CAGR of 5.9% during 2024–2030 as well as it held a larger market share of 55.6% in 2023. This is ascribed to the increasing demand for HVAC services for the proper operations of HVAC systems.
• It has been observed that HVAC systems that do not undergo regular maintenance result in energy wastage and time consumption—almost 20% higher than those serviced on a regular basis.
• In addition, an HVAC system that is not maintained or serviced can be characterized as a less-equipped system in terms of air filtration.
• The dirty filters and coils of such systems harbor mold or bacteria, which further cause health hazards for people residing or working in the vicinity.
• Additionally, it should be noted that a properly installed HVAC unit can have 15–25 years of service life if maintained regularly. Contrarily, without proper upkeep, HVAC systems could fail in 10 years or less.
• Consulting services also include a visual inspection, carried out by an HVAC technician, who identifies the potential issues in the system, before recommending its thorough maintenance.

During the study, two offerings are covered:

• Equipment
• Services (Larger and Faster-Growing Category)

End User Analysis

• Commercial is the largest category, with more than 40% of the market share in 2023. This is because commercial buildings are generally big like office complexes, hotels, malls, educational institutions, etc., due to which they require extensive HVAC systems to regulate temperatures and air quality throughout the space.
• According to the 2022 UNWTO World Tourism Barometer, international tourist arrivals almost tripled from January to July 2022 (+172%) compared to the same period in 2021, and the sector recovered to almost 60% of the pre-pandemic levels.
• This increase in global tourism activities has resulted in a rise in the pace and count of infrastructure development projects in the hospitality sector.
• Global events, such as the Olympic Games 2024 in Paris, the Commonwealth Games 2026 in Australia, and the FIFA World Cup 2026 in the U.S., Canada, and Mexico, are further expected to drive the tourism industry in these countries. This is projected to raise the demand for HVAC systems in the hospitality sector.
• Furthermore, across the globe, there are more than 123 stadium projects either under construction or proposed, which are projected to be completed in the coming years. This would propel the demand for HVAC systems, especially in indoor stadiums and the enclosed areas, such as dressing rooms and VIP and corporate boxes, of outdoor stadiums.

The following are the end users covered in the report:

• Residential (Fastest-Growing Category)
• Commercial (Largest Category)
• Industrial

Asia-Pacific to Surpass USD 170 bn Value by 2030

• The sales revenue in APAC is predicted to reach $170 billion by the end of 2030. The rising average temperature, mainly in India, China, Japan, South Korea, and Indonesia, is expected to support the growth.
• Due to the hot climate in much of APAC, the need for air conditioning equipment is more here compared to North America and Europe.
• Moreover, the growing construction sector in APAC, chiefly India and China, is expected to propel the market in the region.
• Furthermore, the rising count of construction projects in the region, brings big growth opportunities for the players, especially in China. Some major construction projects underway in the People’s Republic are Shanghai Chip Manufacturing Plant (expected to be completed in 2024), Foshan Metro Line 4 (expected to be completed in 2026), and Jingcheng Wafer and Integrated Circuit Packaging Plant (expected to be completed in 2024).
• The growth in the APAC construction sector can be attributed to the increasing population and rising disposable income. China accounts for the highest population in the APAC region, followed by India and Indonesia.
• As of October 2022, China’s population stood at 1.45 billion, followed by India, with a population of 1.38 billion. The rising average temperature and the need to accommodate the increasing population are driving the demand for such appliances.
• Additionally, the growing tourism industry is expected to boost the equipment and service demand, as government bodies and organizations are promoting tourism in order to attract foreign exchange and promote their native cultures.
• Medical tourism is also trending in APAC, as regional countries offer cost-effective healthcare services.
• Moreover, the region is a hotbed for major sports events, which draw a large number of sportspersons and fans from across the globe, thus leading to the growth in the number of hotels. These factors are leading to commercialization on a massive scale, which will drive HVAC usage.

Further, regions and countries analyzed for this report include:

• Asia-Pacific (APAC) (Largest and Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Europe
  • Germany (Largest Country Market)
  • UK (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• North America
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • Kuwait
  • Qatar (Fastest-Growing Country Market)
  • Nigeria
  • Egypt
  • Oman
  • Bahrain
  • Israel
  • Turkey
  • South Africa
  • U.A.E.
  • Rest of MEA

Market Nature - Consolidated

Daikin Industries Ltd. is the largest player in the global market in 2023, led by the introduction of new, differentiated products for indoor air quality (IAQ) and ventilation and bolstering of its sales and marketing capabilities. In addition to expanding the sales of residential ACs in the Americas, Europe, and APAC, the company has recorded a robust demand in Europe for heat-pump-type heaters.

Moreover, the company is planning to expand the sales of high-value-added products, by promoting ventilation and air purification functions for the residential industry and a portfolio of heat reclamation ventilators that can be retrofitted and ultraviolet (UV) streamer units, which are highly beneficial in suppressing viruses and bacteria.

Midea Group Co. Ltd. accounted for the second-largest share in 2023, due to its brand building and effective retail strategies. With 34 production centers and over 150,000 employees in over 150 countries, the sales of commercial ACs and exports of heat pumps have risen significantly in the past few years.

Furthermore, Gree Electric Appliances Inc. of Zhuhai cornered a healthy share in the market. With the booming popularity of distributed air supply by floor-standing air conditioners, the company upgraded the air supply technology and heating technology of its split-type ACs and launched new products, such as Jewel floor-standing air conditioners, to achieve a huge customer base and generate higher sales.

HVAC Market Companies News

• Carrier Corporation launched the new-generation MiniCO2OL compact refrigeration units. These units are specifically designed for convenience stores and supermarkets to increase efficiency and serviceability, and provide faster delivery times to customers.
• Midea Group Co. Ltd. launched its latest energy-efficient water heater in India. It is built as a convenient and compact square-shaped design, suitable for kitchen & bathroom décor. It can be easily adjusted into an existing space, and also it provides comfort throughout the year.
• Samsung Electronics Co. Ltd. launched the DVM S2 variable refrigerant flow (VRF) outdoor AC unit with AI capabilities. To provide cooling, the VRF unit collaborates with the indoor AC units. The new DVM S2 lineup comes in heat pumps and cooling-only variants with power outputs ranging from 8 HP to 34 HP. The launch has expanded the product portfolio as well as the overall revenue of the company.
• LG Electronics Inc. launched its new range of AI Dual Inverter air conditioners. This new range of air conditioners comes with multiple in-built sensors and superior varied-speed dual rotary compressor technology to offer the best cooling. They are designed to deliver convenience and improve the health of consumers while being energy efficient.