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Hotel Industry Becoming An International Business Force

Modern hoteliers are no longer the Mom and Pop guest houses of the past but international businesses employing thousands of people and…

Modern hoteliers are no longer the Mom and Pop guest houses of the past but international businesses employing thousands of people and generating millions in profits for investors.

The world hotel industry is changing from a collection of individually owned, family-run businesses into one increasingly controlled by large, multi-national corporations, according to a new report published last week.

The International Hotel Industry, published by Travel & Tourism Intelligence (T&TI<.>), reveals that more than a third of the world`s hotel bedrooms are controlled by the top 200 hotel companies in the world.

The study has identified the leading 12 companies driving consolidation in the industry and has found that their pace of growth has quickened in recent years. In the three years from 1995 to 1998, these top 12 companies grew at an average annual rate of 4.2%. But during the years 1998 to 2001, these companies achieved an average annual growth rate of 6.4%.

The report`s author, Andrew Sangster, said: The hotel industry is at last coming out of the shadows to be recognised for the industrial force it truly is. For too long the industry has suffered under the misconception both by investors and would-be employees that it offers few opportunities. The evidence is now here to change that.

Driving the consolidation in the industry is the growing importance of branding and the impact of new technology. The book highlights the impact these two key trends are having on the industry.

Brands have enabled hotel companies to charge customers premium price to their unbranded rivals in return for offering guests a consistent quality of service and hospitality, says Sangster.

In addition, the huge potential of technology, particularly the internet, is offering hoteliers more effective ways to market and sell their product. The high cost of this technology is accelerating the trend for hotel bedrooms to be controlled by fewer and fewer companies, explains the book in a dedicated chapter on the subject.

The growing internationalisation of the industry is also clearly highlighted in the study. The most international company, Bass, owner of the Holiday Inn and Inter-Continental brand names, is present in 100 countries. On average, the leading 12 companies have operations in 56 countries each.

The hotel industry is dominated by companies that are based in the USA: eight of the top 12 companies being based in that country. However, the remaining four companies in the top 12 are European and, so far, these groups are more than holding their own against their US rivals.

Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.