Globalization and Hospitality Industry
Table of content
Introduction
1. Globalization and its definition
2. Globalization and Hospitality Industry
3. Challenges brought by Globalization
3.1 Globalizing marketing
3.2 Global promotion
3.3 Global advertising
3.4 Global e-marketing
3.5 Global pricing
3.6 Global ethics
4. Strategies and tends toward Globalization
Conclusion
References
World maps define
national boundaries, but those lines belay the increasingly clear nature of the
global economy. As recently as 30 years ago the international enterprise was a relatively
rare phenomenon, and the term multinational was seldom heard (Gomes, 1991). Today, many companies have transcended
the multinational phase and operate as trans-national or global companies. These
labels reflect a major shift in the structure of the world market for goods and
services - a shift to a competitive framework that has far-reaching impacts for
almost all industries. Experts have predicted that by the year 2015, global corporations
will control approximately half of the world’s assets. Сompanies are in the process of internationalizing the production of a
vast array of manufactured goods, with mega-companies controlling factories all
over the world.
Globalization has become an umbrella word for
a number of political, sociological, environmental and economic trends which present
challenges on a worldwide scale. The world as it was known long time ago, does not
exist any longer, now we experience “shrunk" world
(Dr. M.Cho, 2005). The globalization of business and lifestyles is characterized
by communicating over vast distances in foreign languages, frequent travel to overseas
countries, dealing in many currencies, and coping with a variety of political and
social systems, regulatory environments, cultures and customs. While these aspects
of globalization are easy to identify, understanding the underlying current and
future trends can be problematic. Analysis, however, reveals that a number of issues
are reshaping the global hospitality industry, although there are clearly some complex
questions that are still to be resolved:
·
International expansion with common product and brand
position;
·
Sales and marketing programs that fully capture global
economies of scale;
·
Organizational structures that allow global delivery
of services with local operational control;
·
Cross-border employee training to support operations
(Cline R.S. n.d.).
Globalization is typified by the rapid movement
of people, information and capital across national borders worldwide in ways that
would have been difficult to envision not too many years ago. Yet 'globalization,'
accepted though it is as a fashionable force, is a big concept requiring careful
definition. As many experts you as many definitions you will get, therefore in this
paper I will challenge to point out different definition of globalization and what
is behind it. This paper will outline such issues as globalization vs. Internationalization
and its difference. Globalization has huge influence on Hospitality Industry, and
it brought lots of challenges, consequently Hospitality Industry should and does
keep up with rigid business by defining strategies and tends toward Globalization.
1. Globalization and its definition
In order to understand
globalization, after defining it, we should have a look at how it got started. “During
the 1970s the word “globalization” was never mentioned in the pages of the New
York Times. In the 1980s the word cropped up less than once a week, in the first
half of the 1990s less than twice a week - and in the latter half of the decade
no more than three times a week. In 2000 there were 514 stories in the paper that
made reference to “globalization”; there were 364 stories in 2001 and 393 references
in 2002.
Based on stories
in the New York Times, the idea of being “anti-globalization" was not
one that existed before about 1999. Turning from the newspaper to the internet,
“globalization” brings up 1.6m links through the use of the Google search engine,
and typing in “anti-globalization" brings up 80,000 links.
Type in globalization
and inequality and there are almost 500,000 references, 700,000 references to globalization
and environment, almost 200,000 links to globalization and labour standards, 50,000
references to globalization and multinationals, and 70,000 references to globalization
and cultural diversity and search of globalization and the IMF yields 180,000 suggestions.
The search for better
and cheaper ways of doing business always seems to be an unstoppable force that
drives multinationals to locales that offer the greatest “incentives" - subsidies,
low taxes, low wages, and easy access to markets" (S. Fischer, 2003).
These locales almost
never include the home country whose very success has made it unattractive due to
high wages and societal protectors such as labour unions which struggle for working
rights and employment law.
With such vast variety
of product, companies need to keep customers’ loyalty, thus forced to go internationally.
People nowadays aggressively travel, therefore expecting to find known product or
service worldwide. Business world works in a jungle way - “either you have
dinner or you are dinner”.
What is Globalization?
There are nearly
as many definitions of globalization as authors who write on the subject. One review,
by Scholte, provides a classification of at least five broad sets of definitions:
Globalization,
as internationalization. The “global" in globalization is viewed “as simply another adjective
to describe cross-border relations between countries.” It describes the growth in
international exchange and interdependence.
Globalization,
as liberalization. Removing government-imposed restrictions on movements between countries.
Globalization
as universalization. Process of spreading ideas and experiences to people at all corners of
the earth so that aspirations and experiences around the world become harmonized.
Globalization
as westernization or modernization. The social structures of modernity (capitalism, industrialism, etc.)
are spread the world over, destroying cultures and local self-determination in the
process.
Globalization
as deterritorialization. Process of the “reconfiguration
of geography, so that social space is no longer wholly mapped in terms of territorial
places, territorial distances and territorial borders.” (Najam, A., Runnalls, D., Halle, M., 2007)
Values can play
a role in defining globalization. A definition of globalization as "Americanization"
or, perhaps, the "McDonaldization," of the world presents globalization
as a process driven by American consumer culture that rolls over other cultures.
On the other hand, another definition of globalization highlights its cross-cultural
impact, taking into account the nature of globalization as a way cultures interact
and learn from each other. Globalization is the acceleration and intensification
of interaction and integration among the people, companies, and governments of different
nations (Rothenberg, L.E., 2002-2003).
The term “globalization”
is widely used to describe the increasing internationalization of financial markets
and of markets for goods and services. Globalization refers above all to a dynamic
and multidimensional process whereby national resources become more and more internationally
mobile while national economies become increasingly interdependent. (OECD’s Handbook on Economic Globalization Indicators,
p.11 cited by C.S. Carson (2006)).
Out of all these definitions the one which state
that Globalization is the system of interaction among the countries of the
world in order to develop the global economy and refers to the integration of economics
and societies all over the world, involving technological, economic, political,
and cultural exchanges, which made possible largely by advances in communication,
transportation, and infrastructure, is the most common one. Having in mind different
areas of business, we can define globalization in a dissimilar way, but no matter
how it is described, globalization will drive us toward something innovate and unexplored,
which we will have to face and deal with.
The hospitality
industry is by nature an international one. As international trade and business
expand, there is little question but that international linkage will become even
more important for the industry in such competitive business environment. Defining
the international hotel industry is not an easy mission. Broadly, the international
hotel industry can be defined as an industry that exports hospitality services and
generates export income. In a sense the hotel industry has always been international,
because most hotels have received foreign guests at one time or another. As the
industry has evolved over the years, its structure has become increasingly more
complex with respect to range, ownership, management, and affiliation. There are
many models one may observe, such as independently owned and operated properties;
properties that are independently owned and operated with chain affiliation; chain-owned
and-operated properties; independently owned, chain-operated properties; franchised
properties; referral group properties and others
(Gee, 1994).
Table 1.
Characteristics of Globalization in Tourism
(Feige 1998: 111)
ECONOMY
|
Horizontal and vertical integration strategies of
tourism enterprises
Foreign investment in hotels and tourist attractions
("global tourism markets")
Global players and strategic alliances (air companies,
hotels, tour operators)
Global tourism management
Global competition of holiday resorts
|
TECHNOLOGY
|
Global booking systems
Standardized technologies in transport systems
|
CULTURE
|
Global tourist: uniform traveller behaviour
Creation of "global tourist village"
|
ECOLOGY
|
Tourism as "global syndrome of ecology problem"
Climate changes and their effects on destinations
|
POLITICS
|
Increasing importance of international tourism organizations
Necessity for global coordination and regulation
of passenger circulation
Sustainable development as quality and dominant idea.
|
Most of sub industries
of hospitality industry were influenced by globalization. Here are some examples:
Hotels: in the period between 1980 and 1998 the global accommodation capacity
increased from 8 to 15.4 million beds. The largest increase took place in Europe,
it accounts for 38.5 percent and is followed by the USA accounting for 33.5 percent.
In the nineties most hotels, around 70,000, were opened in south Asia, a 45 percent
growth was achieved in East Asia and in the Pacific Ocean. Six Continents Hotels
has established strategic partnerships with 47 global air carriers. Radisson
Hotels, which are part of Carlson Group travel companies, expanded with
the help of international strategy based on SP with local hotels worldwide, such as Edwardian Hotels in Great
Britain and Movenpick in Switzerland (Tipurić 2002: 212).
Tour operators:
global distribution network of tour operators and travel
agencies is one of the most consolidated businesses. The German TUI, former Preussag,
features on the list of the largest corporations. Preussag entered the European
travel market only in 1997 when it purchased TUI, the biggest German tour operator.
One year later it bought Thomas Cook and Carlson UK and in May 2000
the major British tour operator Thomson. Due to anti-monopoly regulations
Preussag was forced to sell Thomas Cook. C&N Touristik was founded in 1998 when
the German company Karlstadt Quells decided to start cooperation between its TO
NUR Touristic Gmbh and Lufthansa's charter air company Condor Flugdienst Gmbh. They
purchased Thomas Cook, whom they were forced to sell, if it wanted to overtake Thomson.
They decided to stop using the name C&N since Thomas Cook sounds better (Klančnik 2003: 55). In addition, in
the year 2000 TUI formed a strategic partnership with the French tour operator Nouvelles
Frontierres by purchasing 13 percent of its shares. It also entered into a SP
with the leading Italian tour operator Alpitour by buying 10 percent of its
shares (Tipurić 2002, 212).
The air travel
industry: air companies are merging worldwide. The five
major alliances are: Star Alliance, Oneworld, Wings, Qualifier and Global Sky Team.
Everything started with the appearance of hubs offering services to millions of
passengers from smaller emissive markets, such as Frankfurt and Vienna. Deregulation,
the measure allowing flights out of the domestic country, made it possible for air
companies to fly from everywhere and in all directions which is the most evident
proof of globalization (V. Peric, 2005)
Globalization has
positive and negative impacts on the Hospitality Industry.
Table 2. Positive and
Negative Impacts on the Hospitality Industry (3. Challenges brought by Globalization
Globalization is,
in one way or another, related to or has relevance for the many challenges world
is facing today and the discontents experienced by its population. Whether the challenge
is educational, economic or political, the rise of a global economy is rendering
national economies obsolete and creating markets that transcend national boundaries.
These changes are rippling across our lives and focusing attention on our education
systems, producing economic displacement, and engendering intense reactionary movements.
As we move into the future we can expect that national economies will become part
of macro-regional economies (European Union and North American), and that competition
across these economies will result in, among other things, upward pressures on the
skill sets of our labour force, increases in transnational labour and its movements,
and increased public health issues for all nations.
Dramatic changes
of the business environment of hotel chains due to globalisation, advances in information
and communication technology, and increased focus on shareholder value call for
modern forms of marketing. Relationship marketing and its practitioner's equivalent
customer relationship management are the promising, but disputed replies to these
challenges (Medlik, S. 2001).
Dealing with world-wide globalization trends
is new to all of us. Everything is in a state of flux: demands, labour, know-how
and capital are all flowing to where the biggest hopes for future lie, with the
resultant standardization of production technologies, business strategies, marketing
plans and management styles. Although tourism production is tied to local conditions,
the tourism industry cannot avoid being affected by globalization. Tourist products,
and even whole destinations, are becoming interchangeable; continental and inter-continental
transport networks determine the direction and speed of development; distribution
channels and reservation systems are increasingly a decisive factor in success
(Muller, H. 2001).
Worldwide excess capacity in all departments
of tourism-carriers, accommodation, adventure and leisure parks, sport facilities,
cultural events, etc. -is a key driving force in globalization. Drops in tourism
figures in highly differentiated national economies (Austria, Switzerland, Germany,
etc.) are largely due to the fact that almost all national economies worldwide have
discovered tourism as a development-promoting factor and been drawn into the globalization
maelstrom through the competitive situation (A. Lockwood,
et.al, 2001).
3.1 Globalizing marketing
Formulating and implementing a global marketing
strategy is a complicated task. Expanding overseas will bring trouble sorting out
the many complex issues involved, even for those who have great experience in local
markets. Good market data on customers and competitors across the globe make the
task easier. But perceptive analysis of such data requires some managerial rethinking
about customers and competitors.
A strong argument for companies to standardize
marketing was made by Ted Levitt, who in 1983 argued that markets were globalizing
because of two factors: global communication and technology diffusion. With satellite
TV broadcasts beaming the same programs all over the world and with instantaneous
global communications, the world is moving inexorably toward greater homogeneity
of markets. At the same time, the increasing speed of technological innovation and
diffusion make today’s production soon outdated by the onslaught from global competitors
able to incorporate the latest product inventions. The joint effect of these two
forces makes product standardization not only possible but the preferred alternative. (Johansson, J.K., 1997)
Because of the soft and impressionistic data
that usually underlie a proposal for global marketing, the global marketers need
to develop and present a more qualitative argument in favour of global approach.
The focus should be the degree to which a convergence of preferences is under way
(W.J. Keggan, 2002). There are at least three important driving points in an analysis
of the global convergence of preferences:
2.
A major driver of changing preferences is new products
on the market.
3.
The new standard-setting products are first introduced
and tested in leading markets.
In addition to the analysis of common customer
needs there is also need to analyze competition. The analysis of global competitors
adds a level of complexity to the analysis of domestic-only competitors. The global
competitor usually has available a wider repertoire of competitive actions, which
makes for a stronger competitor and makes prediction more difficult. Global competitors
are always a threat to enter any local market where they at the moment might not
have a presence (Johansson, J.K., 1997).
Globalizing marketing involves global coordination
of marketing activities. It involves taking a global management perspective on the
marketing operation in any country. Most typically it involves a certain degree
of marketing standardization. There are several advantages and disadvantages of
marketing standardization.
Table 3. Advantages and Disadvantages of Marketing Standardization.
W.J. Keggan (2002)
Advantages
|
Disadvantages
|
Cost reduction. Cost reductions gained by scale economies
constitute the primary benefits from standardization. Because of the longer production
series there are considerable savings to be gained in manufacturing as well as
purchasing.
|
Off-target. Standardized products, services and promotional
mix are likely to miss the exact target in terms of customers’ preferences in
any one country, because customers in different countries have widely dissimilar
tastes and needs.
|
Enhanced customer preference. Positive experience
with product in one country naturally encourages a consumer to buy the same brand
elsewhere.
|
Lack of uniqueness. Of customization or exclusivity
is one of the overriding purchase considerations, a standardised offering is in
a weak position.
|
Improved quality. Since additional recourses can
be focused on the product development effort and design, the standardized product
or service is likely to be more thoroughly tested.
|
Sensitive to protectionism. Where country makers
are protected be trade barriers, local manufacturing may be necessary and the
scale benefits from standardization cannot be reaped.
|
Global customers. There are an increasing number
of global customers who demand uniform quality and services wherever it happen
to be and buy.
|
Strong local competitors. Globalization can also
fail simply because local competitors are capable and manage to mount a strong
defence.
|
Global segments. Standardization fits with the emergence
of global segments.
|
|
3.2 Global promotion
Global promotion involves a variety of activities,
ranging from in-store point-of-purchase displays and Sunday newspaper coupons to
satellite TV advertising to sponsorship of symphony orchestras and athletic events.
The global sales promotion, public relation, and publicity have also become powerful
promotional tools because of developments in global communications and the opening
up of new markets. Then there is participation in international trade fairs, direct
marketing, and personal selling, the last typically more localized, but still important
(W.J. Keggan, 2002).
Public relations professionals with international
responsibility must go beyond media relations and serve as more than a company mouthpiece
they are called on to simultaneously build consensus and understanding, create trust
and harmony, articulate and influence public opinion, anticipate conflicts and resolve
disputes. Public relations practices in specific countries can be affected by cultural
traditions, social and political contexts, and economic environment. In developing
countries, the best way to communicate might be through gongman, the town crier,
the market square, or the chief’s courts. Even in industrialized countries, there
are some important differences between PR practices. In the United States, much
of the news in a small, local newspaper is placed by means of the hometown news
release. In Canada, on the other hand, large metropolitan population centres have
combined with Canadian economic and climatic conditions to thwart the emergence
of a local press (Johansson, J.K., 1997).
Effective personal selling in a salesperson’s
home country requires building a relationship with the customer; global marketing
present additional challenges because the buyer and seller may come from different
national and cultural backgrounds.
Sales promotion laws and usage vary around the
world but may consist of any of the following: promotional pricing tactics, contests,
sweepstakes and games, premium and specialties, dealer loaders, merchandising materials,
tie-ins and cross-promotions, packaging, trade-shows, and sponsorship (W.J. Keggan,
2002).
Table 4. U.K. Institute of Sales Promotion.
Tactic
|
Germany
|
France
|
U.K.
|
Netherlands
|
Belgium
|
On-pack price reductions
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
In-pack gift
|
??
|
??
|
Yes
|
??
|
??
|
Extra product
|
??
|
Yes
|
Yes
|
??
|
??
|
Money-off voucher
|
No
|
Yes
|
Yes
|
Yes
|
Yes
|
Free prize contest
|
No
|
Yes
|
Yes
|
No
|
No
|
KEY: Yes-legally allowed;?? - under review; No -
not legally allowed.
|
The usage of direct mail, the most popular type
of direct marketing, varies around the world based on literacy rates, level of acceptance,
infrastructure, and culture. In countries with low levels of literacy, a medium
that requires reading is not effective. In other countries, the literacy rate may
be high, but consumers are unfamiliar with direct mail and suspicious of products
they cannot see.
3.3 Global
advertising
The most visible promotional activity is perhaps
global advertising. Global advertising can be defined as advertising more or less
uniform across many countries, often in media vehicles with global reach. In many
cases complete uniformity is unobtainable because of linguistic and regulatory differences
between nations or differences in media availability, but, as with products, localized
advertising can still be basically global. In contrast, multidomestic advertising
is international advertising deliberately adapted to particular markets and audience
in message and/or creative execution (W.J. Keggan, 2002).
There are several traditional problems facing
the decision maker in global advertising. One is how to allocate a given advertising
budget among several market countries. The other is the message to use in these
various markets. A third is what media to select.
But even before tackling these management decisions,
the advertiser needs to define the objectives of the advertising in the different
countries. And before doing that it is imperative that the decision maker identify
what can conceivably be expected from the global advertising effort. Thus, the logical
starting point in global advertising management is the assessment of the role of
advertising in the country markets and the alternative advertising media (Johansson, J.K., 1997).
Despite the drawbacks of standardized and translated
messages, global advertising has become an important alternative to adapted multidomestic
advertising. The technological advances in global communications, the growth of
global media, and the strength of global advertising agencies have combined to make
global advertising possible. And the possible spillovers from unified messages and
the increasing homogeneity of many markets have made global advertising desirable.
As the affluence of countries grows, new products and services appear, and customers
need more information. Advertising becomes more important and advertising expenditures
as a percentage of the GDP increase. For the global marketer, faced with increasing
spending needs in all markets, a coordinated effort with synchronised campaigns,
pattern standardization, and unified image across trade regions is usually more
effective and cost efficient than multidomestic campaign (W.J. Keggan, 2002).
3.4 Global e-marketing
E-marketing is a term that can be used to label
the potential of information technology and the Internet, and the impact on marketing.
E-marketing is perhaps the single most important new development in technology in
the entire history of marketing, particularly the ability to leap over distance.
In global marketing, strategies and practices reflected the importance of distance.
The most important variable impacting trade behaviour is distance. However, the
Internet is totally independent of distance. For the first time in history, the
world has become a level playing field. Anyone, anywhere in the world can communicate
with anyone else in the world in real time with no premium charged for distance.
E-mail is major new communication tool that supplements fax and telephone to eliminate
the barrier distance. E-mail is a marketing communication tool that offers unprecedented
power for one-to-one message for both B2B and B2C communication (Johansson, J.K., 1997).
The aim of marketing segmentation has always
been to create a unique value offer for as many customers as possible. Before the
Internet, this meant, in practice, creating an offer for a segment of the market
that was an aggregation of customers. Almost overnight, the World Wide Web has emerged
as a powerful new tool for accomplishing what in the past was only theoretical possibility
in marketing: creating marketing programs that target a segment as one. Another
major thrust of marketing in recent years has been relationship marketing. The Internet
has opened up immense new possibilities for creating a relationship with global
customers, potential customers, suppliers, and channel members. The end of segmentation
means that marketers can now focus on delivering value to the individual customer
(W.J. Keggan, 2002).
In addition to increasing volatility, the move
from an industrial to a post-industrial e-economy also represent the global marketer
with a new set of rules. Long established principles, such as the emphasis of retailers
in “location, location, location”, are passé. People in such rigid time prefer
to buy goods via the Web, instead of spending valuable time fighting traffic to
buy these goods somewhere in a town. Looking at the changing business principles
forced by the new e-economy, A. Rangaswamy summarized the situation in such way:
Table 5. A. Rangaswamy, “Toward a Model of eBusiness Performance”,
1999.
From To
|
Market share
|
Strategic control
|
Technology as driver
|
Seller-centric market
|
Buyer-centric markets
|
Physical assets
|
Knowledge assets
|
Vertical integration based on size
|
Vertical integration based on speed
|
Decreasing return to scale
|
Increasing return to scale
|
Firm-centric marketing strategies
|
Network-centric marketing strategies
|
In a similar vein, Andersen Consulting stated
that the new economy will force companies to adopt some new game plans. Among the
most important follow:
1.
Secure a dominant market position as quickly as possible.
2.
Form alliances based on their potential for market
access and synergies.
3.
Anticipate very high start-up investments.
4.
Defend positions through an ongoing process of innovations.
3.5 Global
pricing
Pricing globally is much trickier that pricing
in the home market. The level of price is often a minor headache compared with problems
of currency fluctuations and devaluations, price escalation through tariffs, difficult-to-access
credit risks, transfer prices, and price controls - all common issues in global
pricing. Many of the problems in global pricing concern host country institutional
limitations that constrain strategy. The problem is that of coordinating pricing
across countries, to satisfy multinational customers, without imposing a straitjacket
on local subsidiaries and illegally fixing prices for independent distributors.
The competitive analysis might be as simple
as finding out what global and domestic competitors in particular country maker
charge for their products and services. These prices tend to set the “reservation”
prices in the local market, that is, those limits beyond which firm’s product will
not be considered and people will avoid buying. The analysis can go further and
attempt to isolate the differential advantages that the firm’s product might have
over these existing offerings, so-called “perceived value" pricing (Johansson, J.K., 1997).
When a company operates in several nations,
the same product might appear on the market in different countries at widely different
prices. A global customer does not usually like to pay different prices for the
same product in different parts of the world.
3.6 Global ethics
There is a question about the extent to which
the whole of ethics of marketing thinking and practice is accepted. In many newly
opened markets, customers are not used to the way of Western marketing, and many
can be expected to voice opposition to the unabashed trumpeting of a firm’s product.
It is not just the hard-hitting advertisements that cause problems; people might
find the “everything has a price" mentally abhorrent. Certain promotional activities
are likely to become regulated as the free-to-all euphoria in the new countries
recedes. It will be important for marketers to correctly read the mood of the populace
and to not engage in practices that will stir up negative sentiments. Ethical marketing
is likely to be enforces much in some of these countries than it is in the United
States (W.J. Keggan, 2002).
The marketer in China is likely to find it difficult
to protect a successful brand from imitators, at the same time as will challenge
the foreign influence of a global brand.
4. Strategies and tends toward
Globalization
Global hotel markets are expected to continue
to feel pressure from contracting economies and reduced leisure and business travel
across much of the world in 2009. However, despite declines across most major regions
of the world in 2008, operating performance in the global hotel industry remained
profitable as hoteliers focused on controlling costs and preserving the bottom line
(Ernst & Young LLP, 2009, New York).
The challenge, however,
is larger than efficiency alone. It is also about making the various components
of the system work together and towards a shared vision. As an initial step, one
could envisage choosing just one area with which to begin and establishing modalities
for deep and permanent links between institutions that are dealing with clearly
related issues (Najam, A., Runnalls, D., Halle,
M. (2007).
Besides all marketing
challenges stated before, there are numbers of others, including operating issues
(labour shortages, cost containment, increased competition), technological (interactive reservation systems, guest-room innovations, data mining,
yield management) and economic issues (dependence upon the nation’s economy).
All these issues
are challenging companies around the globe in a different degree; therefore they
are also managed in a different ways. A number of international hotel companies
have sought the economies of scale attendant to developing single brands and products,
and providing them in a uniform fashion to as many markets around the globe as possible.
Hospitality companies
that seek capital from the public marketplace (a trend which is clearly going to
continue and expand) trying to function as global enterprises. Hotel companies expanding
globally confront varying traditions, structures and attitudes to property investment
and valuation in different countries.
To compete, they
must pay closer attention to the trends of globalization. The industry must reflect
the requirements of the global village in many aspects of its operations, including
food, services, amenities, staffing policies and training.
“There is little
doubt that most markets in the current economic climate are challenging at best
and growth will be hard to come by most operators, “said Michael Fishbin, National
Director of Hospitality Services. “As a result, this year we will see hotel operators
continue to focus more of their energies on cost reduction, improving operating
efficiencies in their hotels, reaching out to guests via enhanced Internet communication
and strengthening their brands through an emphasis on green principles in activities
related to both development and operations," he added.
The message today
is that it is incumbent on all hotel organizations that have aspirations to develop
brand names across national boundaries to understand what globalization means. A
truly global enterprise will have the ability to react quickly to market opportunities,
no matter where they present themselves by applying business concepts that have
been proven in a context of a global undertaking.
For the larger well-established
international hotel companies that have circled the world in the quest for new opportunity,
globalization has been a strategic concept for a number of years. International
hotel companies have had to confront virtually all of the issues facing global enterprises
- and in many cases more. Unlike a manufacturer with an overseas plant, for example,
a hotel company must export its entire operating business to function in diverse
cultural and geographic settings. Hotel companies must have the capability of establishing
an entire business concept in dramatically different local environments.
In a world moving
more and more towards globalization, hotel organizations will need to communicate
more quickly, operate more productively, offer their employees greater opportunity
and deliver their customers enhanced benefits Those companies that address these
issues today will be better prepared for the global market space of tomorrow.
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February 2006, Frankfurt+ (OECD’s Handbook On Economic Globalization Indicators,
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Cline, R.S.
n.d. “Hospitality Adjusts To Globalization”, Arthur Anderson&Co.
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