The International Hotel Industry: The Age Of Globalization

The age of globalization has brought about changes in most industries and activities around the world. We are now living in a borderless world where the impact of physical borders has been reduced and where interactions among different nations have become more open and less restrictive. It is a fact that the hospitality industry has not been spared by the impact of globalization either. In fact, for the most part, the hospitality industry has benefited much from this age of globalization. The restrictions which physical borders and distance has posed in the past are no longer a significant barrier because the internet has made the globe smaller by making it possible to virtually access many tourist sites and consider their prospects. The advancements

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). Thus, the topic of globalization in hospitality industry is also very

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). Preble, Reichel, and Hoffman (2000) and Pine and Philips (2005) focused on the role of strategic alliances in the hospitality industry competitions. (See also Hwang and Chang, 2003) Strategic alliances are often formed with competing firms that possess complementary skills and resources (Varadarajan and Cunningham, 1995). Key resources include location, brand name, and customer base. Direct advantages for members are: quick access to new markets, technology, knowledge and customers, circumventing or co-opting regulatory barriers, absorbing a key local competitor, lowering risk by sharing costs, and benefiting from a partner’s political connections. Go et al. (1994) applied Porter’s diamond model to assess the competitiveness of the hotel industry. As already discussed in the previous sections, there are four main factors that determine competitiveness, such as the factor conditions and demand conditions. (See also Pine and Philips, 2005.) The observations of