Global Lodging Industry

The Global Hotel industry (NAICS Code # 721110) is an estimated $664 billion dollar industry that specializes in short-term lodging and hospitality for clientele that includes but is not limited to business and leisure travelers, tourists, couples, families, day visitors, and vacationers (MarketLine, 2014). The industry operates many different lodging facilities that include motels, hotels, resorts, spas, and lodges. It is of importance to note though that Casino hotels are not included at all in this industry segment and fall under their own industry due to their primary business being gambling and the plethora of regulations that come with it.

Source: (Hospitalitynet, 2013)

The industry overall is vast and extremely competitive.

To start below is a quick overview of the different products offered by the industry.

THE MANY DIFFERENT PRODUCTS OFFERED BY THE INDUSTRY

 Hotels: lodging establishments for travelers and business clients to provide them with single or multiple night lodging. Often offer amenities such as meeting rooms, bars, and restaurants.

 Lodges: a specific type of hotels classified due to their locations near ski slopes and mountainous areas. These lodging facilities are usually for travelers on vacation.

 Motels: a specific type of hotels classified due to their locations near major roadways and highways. These lodging facilities are usually for travelers for a single night stays.

 Resorts: large style vacation lodging accommodations designed to keep guests on the facility grounds by offering a wide-range of options for rest and relaxation. Very popular and plentiful in beach areas and regions isolated from the normal hustle and bustle of

The reason for the different ownership models comes primarily from the large capital investment costs required in the industry. It is also important to note as well that companies, such as Marriott International, can have hotels or certain brands/divisions that fall under different ownership models and not just have their entire company operate under just a single one.

FOUR PRIMARY OWNERSHIP MODELS FOUND IN THE INDUSTRY

 Full Ownership: one hundred percent complete ownership and control of the business. This type of ownership though requires huge investment and risk on the part of the owner.

 Management Contract: individual(s) operate a hotel or the business for an owner via an agreed upon contract to split the profits/revenues of the business. Under this model the manager(s) perform all the day-to-day operations but have little risk in the business.

 Franchise: Franchisors license their brands to franchisees who manage the day-to-day operations of a hotel or hotels. Under these agreements franchisees pay royalty fees to the franchisors, are subject to their rules and oversight for operating the business, and are tied to the risk of the