1-2 An Overview of The Hospitality and Tourism Industry

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Overview

The hospitality and tourism industry has changed more than a little since the first motel, in San Luis Obispo, California, was opened in 1925. (Its rooms went for $2.50 a night.) Today, there are more than four million guest rooms in the United States, and tourists and businesspeople spend about $550 billion each year on travel. The industry includes giants like Marriott, Hilton, Six Flags, and Disneyland and Walt Disney World, on down to out-of-the-way bed-and-breakfasts and roadside attractions like the Liberace Museum (in Las Vegas), and the Cadillac Ranch (Amarillo, Texas).

Today, the industry directly employs more than seven million people. (For example, consider a waiter in a restaurant in Palm Springs, California, which is in the middle of the desert: His job wouldn't exist if it weren't for the fact that Palm Springs is a tourist destination.) Accountants, nurses, salespeople, lifeguards, park rangers, street cleaners, car rental agents, blackjack dealers, caterers, cruise directors, the actress in the Snow White costume, the clerk in the t-shirt shack, the tennis pro, the golf course groundskeeper-the industry employs these folks and many, many more. The industry today is interconnected by technology. Computer systems now allow people to reserve airline tickets, rental cars, hotel rooms, and tours-all at the same time. These computer systems are called computer reservation systems (CRSs) or global distribution systems (GDSs).
Although many in the industry work in behind-the-scenes positions, those on the front lines-travel agents, front desk clerks, tour guides, and so on-must be enthusiastic and articulate. And in most any position, you'll need to have a love of service and a strong attention to detail. In the end, your job is about how satisfied you've made the customer.

The Internet

The biggest change in the travel industry in recent years has been the rise of the Internet. It used to be that you had to speak with your travel agent, or call hotels and airlines directly, to make your travel plans. But as Internet usage spread, it became possible to use the new technology to research destinations and compare prices yourself, or visit websites that provide all that information in one place. Indeed, companies such as Expedia and Travelocity have become quite profitable doing just that. More and more lodging reservations are made online, and that number is sure to grow in coming years. One of the changes brought by the Internet has been to make the travel agent and reservations clerk less necessary to making travel plans. According to industry experts, the Internet has also raised the number of rooms occupied per night-but it's also caused lower revenue per room, as the ease of Internet comparison shopping and Internet-only promos have increased competition among hospitality providers.

Niche Markets

As in many other industries, the big players in the hospitality and tourism industry have become vastly more efficient due to technology and management advances in recent years. These days, smaller players just can't compete on price. So how can smaller hotels, motels, and tour operators compete with bigger players who pay half what they do for supplies? For many smaller players, the answer is finding a market niche that is not adequately served by the big players and becoming a specialist in providing services for that niche.
Although some market niches are already served by big industry players (think: golf resorts, or tour operators who put together trips to New York City to see Broadway plays), there are plenty of niches that smaller players focus on. If you love travel and have a passion for a certain place or activity, it's likely you'll be able to find a company that operates in that niche. The only problem is that many of these companies will be so small that they'll rarely have an open position for you to fill. Hospitality and tourism is a big, hard-to-pin-down industry that actually consists of 15 or more specific sectors, including car rentals, restaurants, convention and meeting planning, airlines, state and national parks, convention and visitor bureaus, and tour operators. That's way too much for us to look at here, though, so we'll stick to the following core sectors of the industry:

Lodging

The lodging sector, which serves both vacationers and business travelers, makes well over $100 billion in revenue annually and consists of hotels, motels, bed-and-breakfast providers, hostels, and the like: places where you can stay the night. Lodging types include budget accommodations (e.g., EconoLodge, Super 8, and Motel 6), midpriced lodgings (e.g., Sheraton, Marriott), and high-end luxury hotels (e.g., W Hotels, Ritz-Carlton), as well as hostels, campgrounds, and bed-and-breakfasts. Major players in this sector include Carlson Companies, Cendant, Hilton, Marriott, Starwood Hotels & Resorts, Accor, and Choice Hotels.

Resorts

These are destinations built around a specific activity (e.g., golf or skiing), attraction (e.g., Walt Disney World), or target demographic (e.g., Club Med destinations for singles and families, respectively). Unlike the lodgings sector, this sector is focused squarely on the vacation market. Big players here include Walt Disney Parks & Resorts, Club Med, Sandals, Fairfield Resorts, Bluegreen Corp., Intrawest Corp., Vail Resorts, and American Skiing Co.

Gambling

Las Vegas, Reno, and Atlantic City used to be the only places that came to mind when you mentioned the word "casino," but in recent years this sector has been growing in places from Louisiana to North Dakota and from Florida to California. Gaming businesses include casinos, riverboat casinos, racetracks, and racetrack casinos (or "racinos"). Casinos can be stand-alone attractions, or can be combined with lodging facilities (and in some cases, such as Vegas's New York New York, nongambling attractions) to make gambling resorts. This sector employs hundreds of thousands of people in the US. Big players here include Harrah's, MGM Mirage, Caesar's, Mandalay Resort Group, and Trump Hotels & Casino Resorts.

Attractions

This sector comprises all the places you might visit as your main destination while on vacation, as well as all those places you might stop to check out on your way to your primary destination. In other words, everything from amusement parks (for instance, Disneyland) and roadside attractions (such as the Salem Witch Museum) to notable natural landscapes (the Grand Canyon), famous or historical buildings (Graceland, the Alamo), and in some cases entire towns or cities (Branson, Missouri). Big players in this sector include the National Parks Service, Walt Disney Parks & Resorts, Busch Entertainment Corp., Paramount Parks, Universal Parks & Entertainment, Six Flags, Cedar Fair, and ClubCorp.

Travel Agencies and Travel Packagers

Travel agents and packagers help travelers plan their business trips and vacations. Travel agents help business travelers and tourists plan and purchase everything from airline tickets and car rentals to resort stays and attraction tickets. Travel packagers put together trips for individual tourists or groups of tourists, arranging for everything from hotel stays and restaurant reservations to tours guides, theater reservations, and sports lessons. Smaller travel agencies and packagers are more likely to focus on a single market, activity, or location. For example, one travel packager might focus on singles tours, another might offer only surf tours, and another may concentrate on tours of Asia. Major players in this category include American Express, Cendant, Expedia, Orbitz, Travelocity, Carlson Wagonlit Travel, WorldTravel, Maritz Inc., and World Travel Specialists Group.

Cruise Lines

Cruise lines, like airlines, are primarily about getting passengers from place to place; however, cruise ships are essentially floating resorts, with all the activities and amenities of resorts. Major players here include Carnival, Royal Caribbean, Norwegian Cruise Lines, Royal Olympic, and Star Cruises.

Conclusion

In sum, the outlook in the hospitality and tourism industry varies depending on the position and sector you're interested in working in. What is certain is that the industry will continue to grow as we move forward in The Age of Globalization.

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