Hotel Industry

  • Post last modified:2 October 2021
  • Reading time:14 mins read

A definition of the hotel as a business entity was presented by hotel operators during the consideration of the hotel business to authorities of the National Recovery Administration, in Washington in 1933. This definition, as formulated by Stuart McNamara was as follows:

Hotels provide accommodation, meals and refreshments for irregular periods for those who may reserve their accommodation either in advance or on the premises. In broad terms, hotels provide facilities to meet the needs of the modern traveller.

The dictionaries define hotel in several ways: a place which supplies board and lodging’, ‘a place for the entertainment of the travellers’, ‘a large city house of distinction’, and ‘a public building’.

The common law states that a hotel is “a place where all who conduct themselves properly, and who, being able and ready to pay for their entertainment, are received,

The hotel industry is part of the service industry, & the large hotel industry can be broadly responsible to provide food & shelter. The establishments, which offer only accommodation, are called as lodge & the properties serve food only are called as restaurants. In Australia and Canada, a hotel may also refer to a pub or bar. In India, the word may also refer to a restaurant since the best restaurants were always situated next to a good hotel.

A hotel is an establishment that provides paid lodging, usually on a short–term basis. The provision of basic accommodation, in times past, consisting only of a room with a bed, a cupboard, a small table and a washstand has largely been replaced by rooms with modern facilities, including en–suite bathrooms and air conditioning or climate control.

Additional common features found in hotel rooms are a telephone, an alarm clock, a television, and Internet connectivity; snack foods and drinks may be supplied in a minibar, and facilities for making hot drinks. Larger hotels may provide a number of additional guest facilities such as a restaurant, a swimming pool or childcare, and have conference and social function services.

As being part of the service industry, the hotel industry has many characteristically differences between itself & other industries. Hotel businesses are open 365 days a year and twenty–four hours a day. No, we do not have to work all of them but we do tend to work longer hours than some other industries.

Those on their way to senior positions in the hospitality industry and many others, for that matter, often work ten to twelve hours per day. Evenings and weekends are included in the workweek–so we have to accept that we may be working when others are enjoying free time. The hospitality industry depends heavily on shift work.

Early in your career, depending on the department, you would be likely to work one of four shifts. Supervisors and managers often begin at 8 A.M. and work until 6 or 8 P.M., there are four shifts, beginning with the morning shift, so you may be getting up as early as 6 A.M. to get to the shift starting at 7 A.M. The mid-shift is normally from 10 A.M. to 7 P.M.; the evening shift starts at 3 P.M. and goes on until 11:30 P.M.; and finally there is the graveyard shift, which begins at 11 P.M. and lasts until 7:30 A.M. well, success does not come easily.


History of Hotel Industry

The hospitality industry is the oldest commercial activity in the world, catering to all needs of the travelling industry. The origin & development of the hospitality industry is a result of the tourism industry. When a person is away from his home, he needs accommodation, which cannot be carried along with. The primitive lodging houses or inns used to cater to the needs of the traveller. Throughout the world, such establishments were known by different names like Ryokans in Japan, Coffee Houses in the USA & Dharmashala/Sarai in India.

The word hotel is derived from the French word hotel (coming from hôte meaning host), which referred to a French version of a townhouse or any other building, rather than a place offering accommodation .a hotel is an establishment that provides paid accommodation & meals on a short–term basis.

According to British laws, a hotel is a place where a “bonafide” traveller can receive food and shelter provided he is in a position to pay for it and is in a fit condition to receive. The invention of currency & the wheel are the two main factors that led to the emergence of hospitality activity as a commercial activity. From the modest ancient inns to present-day hotel properties that provide all possible luxuries to the guest, the hotel industry has come a long way. The evolution of the hospitality industry can be divided into 3 groups as:

Ancient Era

Earlier hotels or inns (as they were called as) used to provide the provision of basic accommodation, consisting only of a room with a bed, a cupboard, a small table and a washstand were run by the husband and wife team for the travellers. They also provided modest wholesome food and thirst quenchers like wines, alcohols, etc the basic purpose of travelling was limited to religion or survival.

In the olden days, people used to travel on horses & therefore there was a stable provided by the host for the horses. The entertainment and recreation was provided by the host’s wife or his children. This condition prevailed for several hundred years until the industrial revolution of England, which changed the purpose of travel to become business, related which was earlier mainly religious, or educational.

Grand Tour

French revolution witnessed the golden age of travel. In 1670; Richard Lassel introduced the term Grand Tour in his book named as Voyage to Italy. The tourists of the grand tour were the young wealthy tourists who could afford the multiple years abroad. The Grand Tourists were mainly interested in visiting culturally important cities – Paris (France), Rome, and Venice (both in Italy) were the important destinations. Florence and Naples (both in Italy) were also popular destinations.

The Grand Tourist would travel from city to city and usually spend weeks in smaller cities and up to several months in the three key cities. Paris was definitely the most popular city as French was the most common second language of the British elite, the roads to Paris were excellent and Paris was a most impressive city to the English.

As the goal of the Grand Tour was educational, upon their return to England, Tourists were supposedly ready to being the responsibilities of an aristocrat. As this tour often lasted for several years, it was a good business opportunity for the hotels in the above–mentioned cities.


Growth of Hotel Industry

A country, which provides adequate accommodation facilities as per the requirements of the tourist markets, fulfils one of the basic conditions of tourism development. Tourism is largely dependent on the range and type of accommodation available at the destination. Accommodation is a core area of the tourist industry and plays a distinctive role in the development of this ever-expanding industry.

Modern Era

The industrial revolution changed the face of travel from travel for religious or health reasons to pleasure and holiday travel. Hence, there was a need for quick, luxurious and clean service. By 1800 AD, the U.S.A. was the leading in the development of modern first-class hotels whereas European hotel operated only luxury establishments to cater only to aristocrats.

The American hotels were for anyone who could pay nominal rates. This factor had a great effect on the hotel industry. In 1794, a City hotel building was erected in New York It is interesting to note that this was New York’s first skyscraper. At the beginning at the 20th century, the hotel industry was confronted with the challenge of serving a new generation.

Throughout the nineteenth century, several luxurious hotels were built like The Palace in San Francisco (800 rooms), Sultan hotel in Jakarta (1104 rooms) & Grand Sierra Resort in Nevada (1995 rooms) & many more.

Characteristic of the Hospitality Industry

  • Intangibility: The products of hospitality cannot be touched or seen but are experienced
  • Heterogeneity: Standardization of hospitality products is difficult
  • Perishability: As the demands keep on changing, perishability (very low shelf life) is the crucial thing.

Hotel Grading System

Accommodation for tourists is one of the most important elements of the total tourist product. It is an individual component also as it can be sold even without selling the entire tour package. Being an individual service product, it is intangible and often bought in advance. Thus, the tourist at the time of booking the accommodation cannot inspect or accept or reject as he is not able to see it in advance.

Thus, it is necessary to book it through reliable sources, which could give accurate information for both the tourists and the travel agents and thus may need supervision and control. An individual tourist operator needs to gather information about the provision of accommodation to the tourist before the tourist sets off on his journey and when he reaches his destination.

Grading separates accommodation into different categories or grades based on judgments on the amenities and facilities of a particular accommodation unit in a form, which enables the user to choose the quality of accommodation, he requires. This may refer to the physical facilities, food and other services of the establishment, various amenities provided, etc. The establishments are graded individually or collectively by way of giving those numbers, letters or symbols.

Food services, entertainment, view, room variations such as size and additional amenities, spas and fitness centres, ease of access and location may be considered in establishing a standard.

The more common classification systems include ‘star’ rating, letter grading, from ‘A’ to ‘F’, diamond or simply a ‘satisfactory’ or ‘unsatisfactory’ footnote to accommodation such as hostels and motels. Systems using terms such as Deluxe/ Luxury, First Class/ Superior, Tourist Class/ Standard, and Budget Class/ Economy are more widely accepted as hotel types, rather than hotel standards.

Some countries have ratings by a single public standard – Belgium, Denmark, Greece, Italy, Malta, Netherlands, Portugal, Spain and Hungary have laws defining the hotel rating. In Germany, Austria and Switzerland, the rating is defined by the respective hotel industry association using a 5–star system – the German classifications are Tourist (), Standard (), Comfort (), First Class () and Luxury (***) with the mark Superior to flag extras beyond the minimum defined in the standard. This system has influenced the European Hotel stars rating system.

In France, the rating is defined by the public tourist board of the department using a four-star system (plus “L” for Luxus) which has changed to a 5– Star system from 2009 on. In South Africa and Namibia, the Tourist Grading Council of South Africa has strict rules for hotel types granting up to 5 stars.


Classification of Hotels

  1. Hotel Classification by Star System
  2. Hotel Classification by Locations
  3. Hotel Classification by Number Of Rooms
  4. Hotel Classification by Type of Plan
  5. Hotel Classification by Type of Clientele
  6. Hotel Classification by Length of Guest Stay
  7. Hotel Classification by Ownership

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