Historical Development - HA 105: Supplemental Slides...

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Unformatted text preview: HA 105: Supplemental Slides Historical Development of the Lodging Industry The 70s, 80s, and 90s 2001: The Quadruple Whammy Historical Development of the Industry Historical Development of the Lodging Industry When did the modern hotel industry as we know it have its beginnings? Following World War II more Americans owned cars recreational travel = a pastime roadside hotels sprang up Who was Kemmonds Wilson? How did Holiday Inn begin? Summer of 1951 Kemmons Wilson took a road trip with wife Dorothy and their five kids Charged $2 extra per child making their $6 room cost $16 Hotels left a lot to be desired in terms of cleanliness and facilities Im going to build a chain of hotels and never charge for children as long as they stay in the same room as their parents and Im going to built a brand name that you can trust! Ill build 400 of these things across the country His wife laughed at him Kemmons took notes during their trip, measuring rooms and noticing everything about the places they stayed. By the time he got back to Memphis, he knew what he wanted. He hired a draftsman to draw up the plans. It so happened that the draftsman watched an old Bing Crosby movie while he was working, and he sketched the name of it at the top of his plans. Wilson saw it, liked it, and stuck with it. Holiday Inn was born. The Original Holiday Inn (Memphis 1952) The 400 th Holiday Inn opened in 1962 Ramada, Howard Johnson, Marriott, Hyatt, and Radisson were formed in the late 1950s and early 1960s. These successful chains, along with earlier established brands such as Hilton and Sheraton, expanded with aggressive franchising in the late 60s and early 70s. Following in the footsteps of Holiday Inn The early 1970s: Boom Time What caused the boom in the expansion of the hotel industry in the 1970s? Interstate highway system neared completion New suburban markets emerged Easy capital was available Aggressive franchising by major brands expanded market presence with little capital investment 1972 - demand for hotel rooms surged 18.9% What did this surge in supply lead to? Market Segmentation Where one hotel company attempts to identify smaller, distinct segments within larger target markets and develops products and services aimed specifically at satisfying the needs of these groups of travelers. With the acquisition of Ritz (95/98) Marriott was represented at every price-point in the market. The political and economic turmoil that developed in the mid 1970s had a massive negative effect on the lodging industry. 1974 Oil Embargo Ensuing energy crisis and gas rationing Crippled the travel industry Demand in 1975 fell below 1974 levels....
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Historical Development - HA 105: Supplemental Slides...

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