to identify the changes taking place in the industry
structure in Europe, and to learn more about the strategic
management practices of these firms as they address
these changes.
Changing Industry Structure
It is perhaps helpful to take a brief look at the growth of
the hospitality industry before trying to explain the
changes in its structure. To understand these changes,
it is important to recognise that this industry is a secondary
one, that is, it is dependent on the activities of the primary
industries to drive its demand curve. As such, it can be
said that two of the major events affecting this industry
have resulted from technological advances. The first, the
automobile, developed in the early 1890s and, followed
by improved road systems 20 to 30 years later, resulted
in increased travel and thus the need for lodging and foodservice
facilities. The second advance, the jet aircraft
engine in the 1940s, had a significant impact on the
international aspect of the industry as world travel
expanded rapidly, beginning in the 1950s[1].
In both cases, the industry responded by trying to provide
services both along the traveller's route and at his or her
destination. While the automobile had the primary
influence on the development of the industry in North
America, jet aircraft had most influence in the international
arena. The growth of air travel required airline firms
operating internationally to enter the hotel business in
order to provide appropriate lodging for travellers at key
destinations. Thus, for example, with Pan American World
Airways came the growth of international hotel chains such
as Intercontinental. This development pattern existed
throughout the fast-paced travel growth years of the 1950s,
1960s and 1970s.
Many chains developed during this period basically by
expanding their product to as many locations as possible.
The product was fairly standardised and the management
had to be mostly concerned with providing the correct
level or standard of service. The manager's thinking was
directed inward to the guest's needs and the management
structure of such firms was highly centralised. There was
a well-developed culture of the hotelier and, in retrospect,
it could be said that those were the good old days.
Events Shaping Today's Industry Structure
It is well recognised that change must occur and the socalled
good life began to disappear with several events
which took shape in the early 1970s. The first was the
recognition by the capital-market community that the
history of excellent growth in the industry represented
a good investment. Thus, hospitality firms turned to the