Unit managers and corporate managers
both face new challenges in addressing
the structural changes necessary to
remain internationally competitive.
International Journal of Contemporary Hospitality Management, Vol. 3 No. 4, 1991 pp. 21-24
© MCB University Press, 0959-6119
Throughout the 1980s the hospitality industry has been
slowing evolving from one that was highly fragmented and
dispersed to one that is becoming more consolidated. This
consolidation has not been in the form of the emergence
of just a few large firms who dominate the industry, as
was predicted during the last decade. Instead, the
consolidation has been achieved through the use of
strategic alliances both by the buyer and by the seller. This
industry-wide structural change has been accompanied by
changes within the firms themselves. They have evolved
from highly centralised organisations to decentralised
bodies. It is the purpose of this article to provide an
overview of these changes and suggest their implications
for managers.
The overview arises from interviews with over a dozen
European hospitality executives over the past six months.
The interviews were with hotel and food service
companies, members of supplier organisations, association
executives and educators. The aim of the interviews was
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[