The hospitality industry provides accommodations, meals, and personal services for both the traveling public and permanent residents. Hotels have been in existence for as long as people have needed to travel distances requiring an overnight stay. These structures were built along trading routes followed by travelers long before the first roads were built. The earliest lodging places, called inns, most likely offered little more than a sheltered area, usually by a source of water. In many parts of the world, it was the custom for people to offer their homes as a resting place for weary travelers. In the past, Muslim inns were called manzils, meaning "the place where the traveler descends." Religious structures also provided lodging for the traveling faithful. Biblical references to inns, such as the one encountered by Mary and Joseph, were known as khans. In France, inns were called cabarets, buildings with many rooms, or hotelleries, from which the word hotel was derived.

As the Roman Empire expanded more than 2,000 years ago, the first great system of roads was constructed and travel became more frequent. Inns sprang up to accommodate the large numbers of travelers going from town to town. Later, travelers could also find lodging at monasteries. Eventually monasteries developed separate dormitory lodgings for such visitors, and it was the regular responsibility of some of the monks to tend to the guests' needs. The Le Grand Saint Bernard Hospice in the Swiss Alps, featuring the famous St. Bernard dogs, was founded in 961 A.D. by Augustinian monks specifically as an inn for travelers. This huge stone structure was one of the earliest identified inns and had up to 80 beds and could shelter a total of 300 persons.

Hotels and inns began to flourish in England in the middle of the 14th century. Roads were improved and travel increased, giving rise to more inns, many of which offered meals in addition to lodging. By 1446, there were enough establishments to warrant the English government's regulation of the profession, and this did much to establish standards for comfort and cleanliness. In England, some inns of the 15th and 16th centuries were noted for their lavish rooms.

In America, the first public inn was built in Jamestown, Virginia, in 1607. Most of the early American hotels were established on the East Coast, where travelers from Europe would disembark. Inns, taverns, and ordinaries, as they were called in the Southern colonies, appeared along canals, rivers, seaports, and roads. As the country expanded into the Western territories, farmhouse inns were maintained along the stagecoach routes. Large, often elaborate hotels were built in the larger Eastern cities, such as New York and Boston. Catering to the wealthy, these hotels featured dining rooms, ballrooms, shops, billiard and sitting rooms, and other amenities, in addition to many clean, well-appointed rooms.

The rise of the railroads increased the demand for hotels and inns in both Europe and the United States. Having a railroad stop was usually a boon to small towns. Hotels were typically located close to the train station. They also grew larger to accommodate the increasing numbers of travelers.

As lodgings developed, they began to offer more than a bed, a meal, and a roof over one's head. People began to have parties and meetings at inns. The size of the average hotel increased. The largest hotels would have hundreds of rooms. During the 19th century, many luxury hotels were established to cater to the well-to-do traveler. Often as large and as opulent as palaces, these hotels de grand luxe appeared in the major cities of the United States and Europe. The Ritz hotels of London, New York, and Paris, the Palace Hotel of San Francisco, and the Waldorf Astoria of New York were famous for their luxurious accommodations.

Until the 20th century, travelers had little to choose from between the luxury hotels on the one end and the inexpensive hotels, which were not always as clean or as comfortable, on the other. This changed when Ellsworth Statler began building his chain of mid-priced Statler Hotels, which set a new standard for the quality, amenities, and service the middle-class traveler could expect. Statler's hotels featured clean, comfortable rooms, each with a private bath, telephone, radio, full-length mirror, and closet, for a modest price. Coordinating linens, china, and silverware were used in each Statler hotel restaurant, as well as standardized recipes.

Freestanding (or self-contained) restaurants once were associated almost exclusively with hotels. Prohibition and the 1920s dramatically altered that association. Before the Volstead Act, which outlawed the consumption of alcohol in the United States, hotel guests could relax with a drink in the downstairs bar or restaurant. Denied their drinks during Prohibition (1920–1933), they left their hotels in the evening to scout the neighborhood for one of the many speakeasies that served liquor illegally. Most of the speakeasies provided food as well, both to cover their illegal activities and also to please their customers. Thus, Prohibition helped drive a wedge between the hotel and the restaurant, two institutions that traditionally had coexisted for mutual profit.

More dramatic changes for the hotel profession came with the rise of the automobile. A new type of hotel appeared to accommodate the public's increasing mobility. Motor inns and travel courts, often built by farmers where their land faced onto one of the new roads, were being built all across the country to meet the needs of the motoring population. They offered far simpler accommodations than a hotel. Despite an early reputation as a gathering place for thieves and other undesirable people, motor inns, later called motels (formed from the words motor and hotel), soon drew off much of the business from the city-based hotels. Motels gained an image as inexpensive, simple lodging places offering convenient automobile parking for guests. However, modern motels have become larger, fancier establishments with conference and ballroom facilities, as well as other amenities comparable to larger hotels, so the quality distinctions between the two are almost nonexistent.

The hotels responded to this new competition by building or expanding their facilities to accommodate large meetings and conventions. More and more self-standing restaurants appeared, many offering simple, quick fare to motorists. The automobile made even the most remote locations accessible, and resorts were built to cater to every type of vacationer.

The biggest boom in the hospitality industry came with the end of World War II. More and more people were able to purchase cars, and with a healthy economy and growing amounts of leisure time, more people were traveling, dining out, and vacationing than ever before. Hotel chains such as the Statler and Hilton hotels were soon joined by chains of motels, such as Howard Johnson and Holiday Inn. Entire cities became devoted to the hotel industry, such as the gambling city of Las Vegas and seaside resort towns such as Atlantic City. The growth of the airline industry in the 1950s made long-distance travel even more practical and created a demand for new hotels, now located near the airports.

As the economy improved in the mid- to late 1990s, travel, tourism, and the hotel industry in general enjoyed an upswing. People were traveling more, often taking more frequent but shorter trips. Business travel increased, despite innovations such as fax machines, e-mail, and video conferencing. The positive outlook for the travel and tourism industry took a sudden downturn after the terrorist attacks of September 2001. The threat of more terrorism affected consumer confidence and corporate travel policies. Air transport and corporate and convention travel were particularly hard hit. Foreign travel to the United States was also affected. The economic downturn in 2008 further impacted the travel and hospitality industries. Although the leisure and hospitality industry had the highest unemployment rate among major industries in 2013, it has experienced steady growth in the years since. According to an Oxford Economics study, the U.S. hotel industry has added a total of 1.1 million jobs since 2015, employing 8.3 million people as of 2019.

In the last several decades the hospitality industry has become more consolidated. Today, more than 50 percent of the hotel and motel beds in the United States are controlled by about 25 companies. In 2019, the research group Statista reported the top 10 hotel companies by number of properties (in descending order) were Wyndham Hotel Group (Ramada Inn chain, Travelodge, Days Inn, Super 8, etc.), Choice Hotels International (Clarion, Comfort Inn, Comfort Suites, Econo Lodge, Quality Inn, etc.), Marriott International, Hilton Worldwide (DoubleTree, Embassy Suites, Hampton Inn, Hilton, Homewood Suites, etc.), InterContinental Hotel Group (Candlewood Suites, Crowne Plaza Hotels, Holiday Inn, Holiday Inn Express, Kimpton Hotels, etc.), Best Western Hotels & Resorts, G6 Hospitality (Motel 6, Studio 6), RLH Corporation (Americas Best Inns & Suites, Red Lion Hotels, etc.), Aimbridge Hospitality, and Westmont Hospitality Group.

In the past, hotels and motels were set up primarily to serve the wealthy traveler or the person going from place to place. Today, with places such as Disney World, Universal Studios, Club Med, and others, many hotels are no longer simply places to stay while visiting a certain location. They have become travel destinations in themselves.