Market segmentation.pdf

Market segmentation.pdf - 112 UDC 338.48:711.557(680...

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Urbani izziv, volume 24, no. 2, 2013 112 UDC: 338.48:711.557(680) DOI: 10.5379/urbani-izziv-en-2013-24-02-003 Received: 2 April 2013 Accepted: 24 May 2013 Jayne M. ROGERSON Market segmentation and the changing budget hotel industry in urban South Africa Market segmentation is a critical driver of change in the hotel industry, resulting in the appearance of differen- tiated forms of hotel property developments, including budget hotels. International research on budget hotels is mainly limited to North America and Europe, with some more recent studies on emerging economies. This article examines the role of budget hotels within the wider restructuring of the South African hotel industry following the country’s re-entry into the global tourism economy after its democratic transition. Historically, the South African hotel industry became dominated by one- and two-star budget accommodation as a result of the country’s liquor legislation. With the reconfiguration of the hotel industry after 1990 to target the growing international tourism market, the role of budget hotels changed. This analysis examines the diminished role of budget hotels in South Africa’s hotel economy, the shift- ing nature of the budget hotel and location patterns of budget hotels from  1990 to the present. It shows that post-1990 budget hotels are mainly concentrated in large cities and secondary centres of South Africa, and that in small towns the former liquor-focused budget hotel has been replaced by other forms of accommodation. Key words: segmentation, hotel industry, budget hotels, South Africa
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Urbani izziv, volume 24, no. 2, 2013 113 Market segmentation and the changing budget hotel industry in urban South Africa 1 Introduction Dallen Timothy and Victor Teye  (2009) point out that in lodging services the largest share of scholarly work focuses on the business management side of accommodation, mostly studying it from a hospitality management perspective. Al- though this approach is extremely important, accommodation researchers have overlooked the broader role of accommoda- tion as part of national and global tourism systems. Arguably, as pointed out by Colin Michael Hall and Stephen Page (2006: 108), tourist accommodation assumes “an important function in cities.” Among others, David Solnet et al. (2010) draw at- tention to the vital roles played by hotels in tourism systems, and Slavoj Medlik and Haydn Ingram (2000) highlight their significance in offering facilities for urban leisure and enter- tainment, business transactions, conferences and meetings. De- spite the core position assumed by hotels in cities and tourism systems, it is remarkable that hotels are little researched by both urban and tourism scholars, especially in comparison to other urban functions such as housing, retail or office devel- opment  (Shoval  & Cohen-Hattab, 2001). A review of exist- ing social science literature on urban hotels reveals a number of studies by scholars across a range of disciplines including business, human geography, economics, sociology and tour- ism. Several themes are observed, including the historical
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