What is Hotel? Definition, Importance, History, Category

  • Post last modified:16 April 2023
  • Reading time:36 mins read
  • Post category:Hotel Management

What is Hotel?

A hotel is an establishment that provides lodging and usually meals and other services for travelers and other paying guests. It provides paid lodging, usually on a short-term basis. Hotels often provide several additional guest services such as a restaurant, laundry, a swimming pool, or childcare. Some hotels have conference services and meeting rooms and encourage groups to hold conventions, functions, and meetings at their location.

A hotel may be called an establishment where the primary business is to provide to the general public lodging facilities and which may include one or more of the various services such as food, beverage, laundry, uniformed services, etc. Hence, the hotel can also be called home but with a vested interest which includes commercial activities.

Hotels are found in almost all cities. Hotels operate twenty-four hours a day, seven days a week. The principal factor that determines the guest’s attitude towards a hotel is service although other amenities such as room, food, and beverages are of equal importance as tangible determinants.

Definition of Hotel

Hotels are defined in numerous ways from early times to today. Some of the important definitions for hotels are:

A hotel refers to a house of entertainment for travelers. -Reader’s Digest Dictionary

A hotel is a place where all who conduct themselves properly, and who can pay and ready to pay for their entertainment, are received, if there be accommodation for them, and who without any stipulated engagement as to the duration of their stay or as to the rate of compensation, are while there, supplied at a reasonable cost with their meals, lodging, and other services and attention as are necessarily incident to the use as a temporary home. -Common Law

A hotel is an Establishment held out by the proprietor as offering food, drink, and if so required, sleeping accommodation, without a special contract to any traveler presenting himself who appears able and willing to pay a reasonable sum for the services and facilities provided and who is in a fit state to be received. -Hotel Proprietors Act, 1956

The building provides lodging, meals, and other services to the traveling public on a commercial basis. -Encyclopedia Britannica

A hotel or inn is defined as a place where a bona fide traveler can receive food and shelter, provided he is in a position to pay for it and is in a fit condition to be received. -British law

Importance of Hotels

  • Hotels play an important role in most countries by providing facilities for the transaction of business, for meetings and conferences, and for recreation and entertainment. In that sense, hotels are as essential to economies and societies as adequate transport, communication, and retail distribution systems for various goods and services. Through their facilities, hotels contribute to the total output of goods and services, which makes up the material well-being of nations and communities.

  • In many areas, hotels are important attractions for visitors who bring with them spending power that the locals and who tend to spend at a higher rate than they do when they are at home. Through spending by visitors hotels thus often contribute significantly to local economies both directly and indirectly through the subsequent diffusion of the visitor expenditure to the Govt. coffers and to other recipients in the community.

  • In areas receiving foreign visitors, hotels are often important foreign currency earners and in this way may contribute significantly to their countries’ balance of payments. In countries with limited export possibilities, hotels may be one of the few prime sources of foreign currency earnings.

  • Hotels are important employers of labor. Thousands of jobs are provided by hotels in the many occupations that make up the hotel industries in most countries; many others in the industry are self-employed and proprietors of smaller hotels. The role of hotels as employers is particularly important in areas with few alternative sources of employment, where they contribute to regional development.

  • Hotels are also important outlets for the products of other industries. In the building and modernization of hotels, business is provided for the construction industry and related trades. Equipment, furniture, and furnishings are supplied to hotels by a wide range of manufacturers.

    Food, drink, and other consumables are among the most significant daily hotel purchases from farmers, fishermen, food and drink suppliers, and gas, electricity, and water companies. In addition to those engaged directly in hotels, much indirect employment is, therefore, generated by hotels for those employed in industries supplying them.

  • Hotels are an important source of amenities for local residents. Their restaurants, bars, and other facilities often attract many local customers and many hotels have become social centers of their communities.

History of Hotels

The past, present, and perhaps future of the hotel industry are closely linked. Today’s industry is the result of centuries of social and cultural evolution. Comfortable, sanitary lodging was once considered only the privilege of the wealthy, but with the industrial revolution and the spread of democracy, hospitality is not a luxury anymore and now has become available to the common man.

Advances in transportation, enable people to travel greater distances faster and at less cost, paving the way for the tourism industry to flourish. From very modest origins, the hospitality and tourism industries have become two of the largest industries globally. A world without accommodation is indispensable in modern-day life.

Today the lodging industry is complex and diverse. To understand this, we will trace the history of hotels, from the inns of ancient times to modern luxury hotels, whose evolution has influenced as well been influenced by, social, economic, and cultural changes in society.

Taverns or Inns

The earliest hotels were called taverns or inns. They go back thousands of years, for as long as people have started traveling. The Hebrew word for an inn is malon and means a resting place for the night. The Greek word for the inn is kataluma and means an eating room or guest chamber. A man did not have to be in a building, it could be a level piece of ground near a spring where baggage could be unloaded, animals could be watered and tethered, and people could rest on the ground.


When large camel caravans would cross the deserts in Asia, there were hotels called caravanserais at which travelers rested and slept. Caravanserais were established along the more traveled routes as travel spread throughout the East. They usually consisted of a large building constructed around a courtyard. The lower floor was used to store goods and to provide stalls for the cattle. Usually, there was a well or large reservoir nearby. At times, bazaars and markets were held at or near the caravanserais. In those days of travel, the innkeeper provided very little for the traveler’s comfort.

Inns in Middle Ages

During the middle ages, there were few inns or hotels except in the cities. The church or the Lord of the Manor often established special guest offices for pilgrims and other travelers. As roads were built and horse-drawn stagecoaches began to carry passengers between towns and cities, inns were built at a point where the coaches stopped. The inns in the villages or at crossroads had limited and rough accommodations, seldom more than a common dormitory.

Inns in the Fifteenth Century

The fifteenth century brought about fresh importance for the inn. A new merchant class began to emerge due to an increase in trade. This meant more traveling was necessary; therefore a demand for more and better inns was created.

Most travels were still primarily by horseback, but toward the end of the 15th century, more comfortable wheeled carriages came into use. The roads were rough and difficult to travel-muddy in the spring, hot and dusty in the summer, and often impassable in the winter.

During the fifteenth century, many monasteries closed their guesthouses, thus creating a need for more lodgings. The inn also began to perform a definite function in the social life of the people in the area, as well as the traveler.

Inns in the Sixteenth Century

The inns of the sixteenth century changed little from earlier times, although they were large and somewhat spacious.

The accommodation has improved greatly, for now, a guest could often have a private bedroom furnished with heavily carved oak furniture. The ground floor consisted of a large hall called the parlor, which was used as a reception room as well as a place to serve meals. The upper floor was used for the guest rooms.

Inns in the Eighteenth Century

With more regular business, the innkeeper realized the importance of their inns and tried to offer more comforts to the weary traveler; they had better-furnished rooms, a generous supply of food and drink, waiters and serving maids eager to please the guests, and large stables for the horses. Not only would the public stagecoaches be found stopping at the inns, but also the private coaches of the wealthy.

There was a large increase in the volume of coach travel in the eighteenth century. Tollgates were set up on some roads to provide funds to repair and improve roads and bridges better roads and more comfortable coaches made travel much faster, more comfortable, and more appealing to a greater number of people.

Travelers found that most of the innkeepers greeted them with a smile, and were given good meals. If the stop was overnight, the inn offered an ideal comfortable bedroom that was neatly furnished usually with a four-poster bed, washing table mirror, etc. The inns that could not meet the traveler’s needs, either through mismanagement or just plain rudeness, did not stay in business for long.

As travelers from Europe ventured across the Atlantic to America, inns were built in towns and villages and along the roadside. They became gathering places for not only the traveler but also the local inhabitants. The inn was a place where people could refresh themselves after work or hold evening meetings and share the events of the day.

Emergence of Hotels

The past one hundred years have brought about dramatic changes in modes of transportation, as well as in lodging accommodations. People from all walks of life started to travel. As travel increased, the train services were launched and became more comfortable and faster. This was the time when the roadside inns started losing business as more people started to travel by train rather than the coach.

Many inns had to close while others were able to remain open by catering more to the local people. Some inns became strictly taverns or coffeehouses. Some of these still exist today. London has a larger number of old taverns than any other large city in the world. They have changed with the times to survive and are the pubs that we know today.

Traveling by train brought the traveler into the heart of a town or city. Many hotels were built near railroad stations for the convenience of passengers. This was the beginning of hotels, as we know them. Many hotels that opened in the mid-to late-1800s are still as popular as they were when they first opened.

Hotels and the Government Policies

Many countries have recognized the vital importance of the accommodation industry concerning tourism and their governments have coordinated their activities with the industry by way of providing attractive incentives and concessions in the form of long-term loans, liberal import licenses and tax relief, cash grants for construction and renovation of buildings, and similar other concessions to the accommodation industry.

The United Nations Conference on International Travel and Tourism held in Rome in 1963 considered, in particular, problems relating to means of accommodation. The Conference acknowledged the importance of means of accommodation, both traditional (hotels, motels) and supplementary (camps, youth hostels, etc.) as incentives for international tourism.

The Conference recommended that governments should consider the possibility of including projects, particularly those relating to accommodation, on the list of projects eligible for loans from industrial or other corporations, and that, where required; they should establish special financial corporations for tourism. It also has recommended that governments should give sympathetic consideration to the possibility of granting special facilities and incentives for accommodation projects.

According to the WTO Report on ‘The Development of the Accommodation Sector,’ tourist accommodation is used to denote the facilities operated for short-term accommodation to guests, either with or without service, against payment of and according to fixed rates. For classification, all tourist accommodations have been divided into the following groups:

  • Hotels and similar establishments (the hotel industry proper) and,
  • Supplementary means of accommodation.

The first group usually includes hotels, motels, boarding houses, and inns, while the second includes registered private accommodation (rented rooms, apartments, and houses), camping/mountain huts and shelters as well as health establishments, that are sanatoria and convalescent homes.

Present Day Hotels

The concept and the format of the hotel have changed a great deal over the years. There are different types of hotels ranging from international hotels to resort hotels catering to the increasing and diversified demand of the clients. The size, the facade, the architectural features, and the facilities and amenities provided differ from one establishment to another. In addition, the landscape in a particular destination area also greatly influenced the architectural features of a hotel. The following are the main types of hotels:

  • International Hotels
  • Commercial Hotels
  • Residential Hotels
  • Resort Hotels
  • Floating Hotels
  • Palace Hotels
  • Capsule Hotels
  • Heritage Hotel’s
  • Guest Houses

Development and Growth of Hotel Industry in India

Hotel Industry in Medieval Period

In India too the development of the hotel industry is closely linked to travel. In India, travel was mainly on animals (mule, horse, and camel). For rest during their travel at strategic points Dharmashalas, Sarais, Chaupals of Panchayats, Choultry (in South India), and temples and religious places were provided by rich people such as Rajas, Kings, Zamindars, etc. Usually, free accommodation and food for travelers were given. During this period the state authorities needed to provide food and shelter to the wayside traveler.

Mussafir Khanas and Sarais

These developed during the period of Muslim Emporers. Many famous and well-known Musafir khanas and saris were established in the Sindh province during the Arab occupation, and also at Peshawar and Lahore. Delhi has always been traditionally hospitable, and we find overwhelming evidence of this in the innumerable saris and rest houses in this ancient city.

As per Shiab-al-din Alumrai, there were 2000 Khangabs and saris in Delhi and its suburbs. Most of these have not survived. Some of the famous saris in Delhi are Qutub Sarai, Ladha Sarai, Lado Sarai, Sarban Sarai, Daud Sarai, Kallu Sarai, Arab ki Sarai, Sheikh Sarai.

Sarais started developing into inns and western-style hotels with the coming of Britishers in important cities like Calcutta (Kolkata) and Bombay (Mumbai).

As early as the 18th century, there were excellent inns (taverns) in India. Some famous inns were: Portuguese Georges, Parsee Georges, and Paddy Georges. Some famous hotels of that time: Albion Hotel, victory Hotel, Hope Hall, etc.

Emergence of Hotels in India

Pallanjee Pestonjee (1840) started the first luxury hotel in Bombay. It was famous for its excellent cuisine, beers, and wines and its excellent management. Auckland Hotel (1843) was established in Calcutta. Later it was renamed as Great Eastern Hotel in 1858 and later renovated at a sum of Rs.10 lacs.

Esplanade Hotel (1871) was built in Calcutta by John Wakson (Britisher), a silk drapery merchant (also believed to be an architect and builder). The hotel had 130 rooms. Later, some Swiss and other families also owned hotels in India. One such example was Hotel Fonseca in New Delhi which was later demolished and Hotel Taj Mahal at Mansingh Road was built, there.

In 1903, JRD Tata constructed the Taj Mahal Hotel in Bombay. It was the first hotel of international standards and repute, built by an Indian for Indians.

Hotels and Policies of Indian Government

The Government realized the importance of tourism in 1962 when there was a drop in tourist arrivals. To upgrade the hotel industry, incentives were offered by the Department of Tourism (DOT). Hotel Corporations and Tourism Corporations were established. Ashoka Hotel Ltd. was constructed in, 1956 in a record time of one year. Later, the Union Ministry of Housing and Welfare constructed 3 hotels: Lodhi Hotel, Hotel Janpath, and Ranjit Hotel.

The Dewan Chaman Lall Committee was set up by the Govt. of India (Hotel Standard and Rate Structure Committee) to:

  • Lay down criteria for the classification of hotels given international standards.

  • Suggest guidelines for the promotion of tourism to India and within India.

  • Suggest improvements to the existing arrangements and availability of (sources for the promotion of national and international tourism.

  • Suggest a rate structure keeping in view the existing price structure in the hotel industry. Till 1963 hotels were mainly run by private operators and only rest houses and tourist bungalows were run by the Department of Tourism. Hotels at Puri, Aurangabad, and Ranchi were traditionally rum by the Railways and State governments. The State government also ran hotels at BrindabanMysore.

Formation of Three Corporations and ITDC

In 1964 three corporations were set up by the Government of India, viz.

  • India Tourism & Hotel Corporation,
  • India Tourism Corporation Ltd. and
  • India Tourism & Transport Corporation.

On 24th September 1966, the Government of India decided to merge these corporations and promulgated “India Tourism Corporation Amalgamation Order” 1966″ and formed a new corporation-India Tourism Development Corporation (ITDC) with an authorized capital of Rs. 5 crores. Soon ITDC took over tourist “bungalows at:

  • Mahabalipuram, Thanjavur, Madurai and Tiruchirapalli (Tamil Nadu)
  • Bijapur and Hassan (Karnataka)
  • Khajuraho, Sanchi and Mandhu (Madhya Pradesh)
  • Kullu and Manali (Himachal Pradesh)
  • Bodhgaya (Bihar) vi) Bhubaneshwar (Orissa)
  • Rashi Nagar (Uttar Pradesh)
  • Ghana (Rajasthan).

Category of Hotels

International Corporate Hotels

These are large chains, which are almost household words in the industry, such as Hilton, Inter-Continental, Hyatt, Holiday Inn, Sheraton, etc. Some of the groups are a combination of company-owned, franchise, and management contract operations while others are entirely owned by an individual or a company. Their main features include standardization of service, facilities, and price, and many chains endeavor to operate a hotel in most major capitals throughout the world. Major International Hotel Chains are:

Holiday Inn2,67,6771,375
Best Western1,61,7141,762
Days Inn1,32,0001,126
Motel 663,342551
Comfort Inn60,053662
Howard Johnson56,188451
Major International Hotel Chains

National Hotel Companies

Some countries have national hotel companies, which operate hotels at home and abroad, such as the Taj and Oberoi hotel groups. These are both Indian companies that are well-known outside India.

Small Hotel Groups

Not all groups of hotels are large or widely dispersed. Some companies own a group, which may consist of no more than four to five hotels, and they may be confined to a particular area such as the beach resorts.

Independent Hotels

These are hotels that” are privately owned or independent of any company. Many guests enjoy staying at an establishment of this type because of the individuality of the operation. The classical example will be Casino-cum-hotels of Los Vegas, Nevada, Macauoff China, Genting Highlands of Malaysia, and others.

Hotel Consortia

Independently owned hotels form a liaison which provides them with the advantages of shared advertising costs, bulk purchasing, and referral of bookings. The guest has the advantage of knowing each hotel in the consortium will be of similar standard and price. Best Western Hotels is an example of a worldwide network of independently owned hotels.

Major Hotel Groups in India

Many small and big Indian hotel groups are operating in various parts of India. Some of them are given below. Apart from India, some international hotel chains such as Sheratan, Hilton, Ramada, Sofitel, Meridien, Hyatt, and Mariott are either operating or planning to operate in India on a franchise basis.

  • Welcome Group: It is the hotel division of ITC Ltd. The logo represents a traditional Indian welcome in the form of Namaste in an open doorway with the slogan “Nobody gives you India like we do.” The motto of Welcome Group is “We enjoy people” Welcome Group has hotels in various cities such as Agra, Delhi, Aurangabad, Jaipur, Goa, Gwalior, etc.

  • Oberoi Hotels: Rai Bahadur M.S. Oberoi established Oberoi Hotel Pvt. Ltd. in 1946. Many hotels like Oberoi Intercontinental in August 1965 in New Delhi and Oberoi Sheraton in 1973 in Bombay were added. It is now one of the largest and most reputed hotel chains in India.

  • Hotel Ambassador: It is one of the flagship hotels belonging to Lala Ram Parshad who is considered one of the pioneers of the Hotel Industry in India (now managed by Taj Hotel in Delhi).

  • U.P. Hotels and Restaurants Ltd: Famous as Clarke’s Group of Hotels, it was established on 13th February 1961. It started with its flagship hotel Clarke Shiraz Agra. Later hotels – Clarke’s Awadh, Clarke’s Amer, and Clarke’s Varanasi at Lucknow, Jaipur, and Varanasi, respectively, were added to this chain.

  • Ritz Chain: A chain belonging to the R.N. Kapoor family with hotels in Mumbai, Hyderabad, Kolkata, and Coonoor (in South India). Specialized in Italian cuisine.

  • Spencers: Started a hotel business in 1912 in Calcutta. Purchased Connimera Hotel in Madras and opened West End in Bangalore, Malabar at Cochin and Trivandrum, Blue Mountains at Kotagiri in 1942, and Savoy in Ooty in 1943. Vegetarian hotels in Madras (Geetha, Ashoka, and Ajanta) and Hotel Arakua in Bangalore.

  • Sinclairs: A chain of hotels operating in the eastern part of the country with hotels at Darjeeling and Takadah.

  • Hotel Corporation of India (HCI): A corporation set up in 1971. It started with its first hotel in Bombay in 1974. Later hotels in Delhi, Srinagar, Rajgir, etc. were added to this group.

  • Leela Group: It has hotels in Mumbai and Goa.

  • Asian Hotels: The group has tied up with the Hyatt chain and has two hotels in Delhi. It plans to have a property in Jaipur and Agra.

  • Apeejay Surendra Group: It started with its first hotel Park Calcutta in 1967. Later a large hotel was added in Delhi, and a Resort hotel at Visakhapatnam was added to the group.

  • J.P. Hotels: The group has hotels in Delhi, Agra, and Mussoorie.

  • Palaces Converted into Hotels:
    • Maharaja Hari Singh Palace was the first to be converted into Oberoi Hotel.

    • Maharaja of Jaipur converted his palace Ram Bag into Hotel.

    • Maharaja of Udaipur was third in line (Taj) Lake Palace in Pichola Lake

    • Later Jodhpur Palace (Oberoi), Jaisalmer Palace, and Bikaner Palace were also converted into hotels.

    • Lakshmi Vilas Palace of Jaipur (of Majaraja Bhupal Singh). Ushakiran Palace of Gwalior.

    • Hotel Jai Mahal Palace, Jal Mahal, and Raj Mahal Palace in Jaipur are also converted or converted to hotels.

    • Chamundi Hill Palace has also been converted into a hotel.

    • Lalitha Mahal Palace of Mysore is a tourist hotel. Halcyon Castle of Travancore Maharaja is also converted into a hotel.

    • Bolghathy Palace near Cochin Port (Residence of former British Resident of Southern States) is also converted into a hotel.

Hotel as a Service Provider in the Modern Day

Gone are the days when people looked upon a hotel for a bed and food. Now it provides almost everything that a guest needs. Hotels have become service providers for guests in all possible ways. Competition has set into providing these services to woo the guests. Every big hotel chain/group has been spending crores of rupees to stay in this race.

Different services are rendered by the hotels, viz. Banquets, convention centers, exhibition centers, restaurants, catering services, secretarial services, corporate services, money changers, travel desk, butler service, valet service, internet service, facility for sports and games, massage parlor, health club, gym, shopping arcade, swimming pool, tourist limousines, airport service, etc.

These services are either wholly owned and run by the hotel, owned by the hotel and run on the franchise by experts in the field, or owned & run by outsiders but attached to the hotels. These services complement each other and also help in improving the occupancy rate of the hotels.

  • Banquet: Hotels provide a wide range of banquet menus. Weddings, parties, and business gathering all of which help in improving food sales and also work in attracting new customers.

  • Convention Center: Meetings, seminars, conventions, and other social gatherings are arranged which in turn attract group bookings, good occupancy, and food service.

  • Restaurant: Restaurants serving different specialty cuisine like Chinese, Korean, Italian, Continental, Mexican, and Indian (South Indian, Mughalai, etc.) are set up by hotels with the interiors suiting those places are run to cater to the different tastes of domestic as well as international tourists. Catering services are also undertaken at off-campus locations.

  • Secretarial Service: This is an essential service for corporate clients. The CEOs, M.Ds, and Chairpersons of different companies need this arrangement for expediting their notes, letters and agreements, communications, etc.

  • Corporate Service: This works as an extension to the corporate offices of the clients. All the services needed for handling corporate affairs are provided to make the corporate guest feel at an “office away from his office.” Internet Service is the latest addition to the corporate service list. This is available even in small and medium-sized hotels. The guest can connect his laptop to this service and perform his regular work/tasks.

  • Money Changers: Where there is a high proportion of foreign tourists/visitors, there will be the need for money to change services. Here the hotel exchanges the foreign currency for local currency. However, it cannot sell foreign currency. This service must function as per the foreign exchange rules and guidelines of the Reserve Bank of India from time to time.

  • Travel Desk: Provides car rental services, air & train ticketing and looks after the other travel needs of the guest. In some hotels, Concierge looks after this service too.

  • Butler Service: A personalized service is provided to the guest and his visitors exclusively. He provides the food and beverage and also wine service, looks after the visitors to the guest and helps in keeping the room tidy from time to time, and also arranges the wardrobe for the guest.

  • Valet Service: Also a personalized service, but limited to help at car parking and laundry facility, etc. in hotels.

  • Health Club and Sports and Games: This is provided not only in resort or leisure hotels but also in downtown & commercial hotels. The present corporate guest even though a busy person wants some time out for himself for health and pleasure reasons.

    Health club, Spa, Gym, Message Parlour, Swimming pool, billiards, bowling alley, tennis court, and mini golf course are some of the popular facilities. In some parts of our country health tourism has picked up at places like Himachal Pradesh and Kerala where health spas and ayurvedic treatments are provided. The tourist on vacation can go back to being a rejuvenated person.
Article Reference
  • M. Zulfikar (1998), Introduction to Tourism and Hotel Industry, Sangam Books Ltd.

  • S.K. Bhatnagar (2002), Front Office Management, Frank Bros. & Co. (Publishers) Ltd.

  • Alan T. Stutts, James Wortman (2005), Hotel and Lodging Management: An Introduction, Wiley.

  • Tom Powers, Clayton W. Barrows (2002), Introduction to the Hospitality Industry, Wiley.

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