Hotels are more than a bed and a hot meal. They are frequently a linchpin for commerce. They can literally put a destination on the map as a commercial center or a distinctive place where visitors should come. Invariably, hotels are a key element in a community's economic base because they generate jobs and draw in visitor spending to the area, bringing in new money and support for many other businesses. The grocer who supplies the hotel's restaurants, the laundry that cleans the sheets and tablecloths, and the souvenir shops, restaurants, local attractions, and sightseeing companies frequented by tourists and business travelers all benefit. Indeed, through the ripple effect, it is estimated that what each visitor spends multiplies four times through the local economy.
In many parts of the world, a hotel has been the foundation for a tourism industry that turned a depressed area into a vital one, such as Kyong-ju in South Korea and Khajuraho in India. Closer to home, in Lake George, NY, the reopening of The Sagamore, a grand resort built in the Gilded Age, was a major event for the community, the largest single employer in the area. The Sagamore was the first hotel to remain open year round.
Employing some 1.6 million people in some 44,000 properties in the United States and paying out some $17.4 billion in salaries and wages, the lodging industry offers the greatest opportunity for jobs of any single segment in the travel industry in terms of numbers, future growth, and advancement. Indeed, the lodging industry, which totaled $57 billion in sales in 1989 (a year when 2.8 million new rooms went on the market), is expected to generate some 400,000 new jobs during the 1990s, in 1989 alone, 53,000 new jobs were created. The number of desk clerks, 113,000 in 1988, was expected to grow to 142,000, or by 26 percent, by the year 2000.
The growth in new properties has slowed since the boom of the 1970s and 1980s (an estimated 6,000 properties opened between 1985 and 1990), when building was propelled by real estate tax shelters. Hotel owners did not have to make money on rooms; they could get their money back through tax write-offs and then hope to see a profit when they sold the property at an appreciated value. "With construction costs currently amounting to $350,000 to $500,000 a room, that would mean a room rate of $420 a night in order to make money," said John Beier, regional vice president of Loews Hotels, New York. 'There will be a shakeout period."
So far, the shakeout has consisted of buy-outs rather than bankruptcies. For example, the mega-company Holiday Corporation-at its height a $ 5-billion company with 1,700 properties and 2000 employees worldwide-was acquired and broken up into Holiday Inn Worldwide, owned by Bass PLC, a British conglomerate, and The Promus Companies, Inc., which operates Embassy Suites and Homewood all-suites, Hampton Inns, and Harrah's Casinos/Hotels. Holiday Inn Worldwide now consists of Crowne Plaza, Holiday Inn, and Holiday Inn Express, which employ 1,700 people in the United States and 52,000 worldwide, another 1500 employees work in franchised hotels. Promus, meanwhile, still one of the largest hotel companies in the world, recently formed an international division to expand the company's operations in Europe and Asia-Pacific.
The lodging industry will expand for all the same reasons that the travel industry will expand the maturing of society into demographic categories that tend to travel, more dual-income families, and greater value placed on travel. Other factors also come into play the mobility of society (the fact that children tend to move away from parents, prompting much long distance leisure travel) and the specialization and globalization of commerce (which spur growth in business travel).
Continued growth in the hospitality field will accelerate the already rapid career advancement characteristic of the lodging industry. The lodging industry has a long standing tradition of taking people with minimal experience into specific entry level positions, training them, and moving them up through a hierarchy. It is not uncommon for someone to rise to a general manager's position within five to ten years. Among the success stories is the chairperson of Hyatt Hotels, Pat Foley, who started out as a front office supervisor in Seattle about 30 years ago, and Hyatt's president, Darryl Hartley-Leonard, who started out as a desk clerk at about the same time.
However, many people in the industry fear that a threatened shortage of skilled workers in the 1990s may prevent companies from realizing the full potential of growth in demand.
'The decrease in the size of families is a double-edged sword," declared one hotel executive. "Smaller families will probably mean a significant increase in per capita discretionary income which can be spent on travel and leisure. However, a decrease in the available workforce suggests a shortage that will affect all service industries.
"We will have to be more flexible in establishing split time and flex-time for our employees and exert a recruiting effort be-yond anything we have seen before because if we can't service the market, we will lose it."
Consequently, companies are stepping up efforts to hire from nontraditional sources, including retired, disabled, and economically and educationally disadvantaged groups. Hyatt Hotels Corporation, for example, launched a nationwide recruitment program of people with disabilities (and is instituting guidelines for "barrier- free" hotels). "Providing job opportunities for persons with disabilities is not only morally right, it also makes good business sense," stated Darryl Hartley-Leonard.
More hotels are also making the work and family problem easier for working parents. Twin Towers Hotel and Convention Center, Orlando, FL, opened a satellite public school within the hotel so that parents could have their children nearby. And to further spur people to pursue careers in hospitality, the American Hotel and Motel Association (AH&MA) is working to step up efforts by hospitality educators to recruit high school students into their programs.
The Oldest Profession
Long an esteemed profession in Europe, hospitality as a service industry is just coming into its own in the United States. Indeed, the AH&MA, representing about half of all lodging properties in the United States, at one point joined with the National Restaurant Association to mount an "Image Task Force" to create an industry wide "Image/Employee Recruitment" campaign.
Inn-keeping is probably the oldest "tourist" entity still surviving intact. The tradition of inn-keeping that served pilgrims and merchants thousands of years ago is still fundamental to the lodging industry. The essence of bed and board is preserved in bed and breakfast establishments (seeing a new revival), inns, motels, and the new class of so-called economy hotel.
However, hotels today take many different forms and offer many different services and facilities beyond bed and board. Many hotels are more like mini-cities, offering a full complement of services and a range of professionals to match. Hotels are restaurants, catering services, meeting and convention facilities, and sites for weddings, family functions, and other special events. They are sports facilities, retail malls, and tour operators. Many stage live entertainment; some are gambling establishments.
Far more than bed and board, the hotel business involves real estate, finance, food and beverage, tour packaging, meeting and convention planning, education and development, engineering, energy management, purchasing, architecture, interior design, maintenance, information management, franchising, entertainment, recreation, telecommunications, and computer systems. It also involves sales and marketing, administration, and public relations.
