Slowing Economy Analysis Of Chain And Independent Hotels Tourism Essay

Following the economic crisis in the last twosome of old ages, which has had an impact on all the concerns, has had an impact on the hotel industry every bit good. However, in order to last in the economic crisis, both the concatenation every bit good as the independent hotels have had to do assorted changes to its schemes and patterns in order to maintain their market portion by offering the best services to its clients while still endeavoring to last during the economic state of affairs.

However, both concatenation & A ; independent hotels have tried to vie to derive a competitory advantage and it can be said the Chain hotels have many advantages, but so make the mugwumps.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

In this study, we aim to critically analyze how Chain hotels and the schemes used by them are functioning to be better and demoing better public presentations than the independent hotels in this current slow economic system.

Cordial reception industry has being evolved since mediaeval century. Since so there has being considerable about of alterations and up-gradations in cordial reception industry. The cordial reception industries normally satisfy basic demands such as nutrient, vesture and shelter for travelers. Hotel industry developed from ‘INN ‘s ‘ to hotels in past decennaries.

During the industrial revolution in mid of seventeenth century, coach travel became stylish and British authorities established postal service in England. In response legion hostel were developed to suit of all time increasing flow of travelers and regular reaching of postal managers. Colonial hostel were rapidly developed and earlier evolved as local, societal and political assemblage topographic points.

Hotels provides varied types of comfortss and installations like saloon, eating houses, swimming pools, room adjustments, casinos, etc and concern installations like conference suites, feasts, etc.

There are assorted types of hotels across the Earth harmonizing to their manner of service and category and besides depends upon ownership and association.

Hotels are organised as into groups in ironss or franchise administration, Chain hotels or stand entirely as Independent hotels.

In mid of 19th century, assorted cordial reception organisations took measure frontward and started spread outing their concern beyond their part to run into the planetary market. Then ‘Brand ‘ construct came into consideration and so concatenation of hotels were established. Chain Hotels are those hotels which are operated under a same trade name name. There are assorted hotels across the universe, runing under a individual trade name, indistinguishable manner of service and similar policies and were managed by different belongingss.

Independent hotels are those hotels which are owned and managed by itself, a individual ownership or in group of people. They make their ain constitution, put their ain trade name name and house. They do n’t let portion their trade name name with any other house or constitution. They do n’t hold association with other belongingss. Harmonizing to Kasavana and Brooks ( 1995 ) independent hotels have no identifiable ownership or direction association with other belongingss. In other words, independent hotels have no relationship to the other hotels sing to assorted policies, regulations and ordinances. A typical illustration of an independent belongings is a family-owned and operated hotel that is non required to conform to any corporate policy or process. Chain hotels normally impose certain minimal criterions, regulations, policies and processs to curtail affiliate activities. Several different constructions exist for concatenation hotels. A concatenation is stated as house which operate under a direction or franchise group.


Sing the selling and trade name acknowledgment, concatenation hotels made a good impact on planetary tendency. As they are affiliated and have web of hotels across parts, they able to capture a immense mark and so do a immense impact on consumers. Example- Mc Donald. Ronald Mc Donald is the one of most celebrated face of cordial reception industry. Sing independent hotels, their success is the owner, who efficaciously involves in community personal businesss, and set up good bond with many clients. They follow productiveness, and efficiency and covering gracefully with issues and model their constructs consequently the market demands and demand. Considering advertizement, concatenation hotels surplus advantage because of their national and international advertisement. ( ”Tom Powers and Clayton W. Barrows, debut to direction in cordial reception industry,7th edition )

Chain hotels have strong capital entree compared to independent hotels. They have an advantage to increase their section and size of company. They enjoy a broad are following of scope of investors and stakeholders. In add-on they can raise fiscal financess through common financess, stock gross revenues, public markets, etc. They possess ready entree to capital. While in instance of independent hotels they have to well organise and work on concern programs and payments so as to act upon bank loans proposal to acquire cleared. They have to be relevant with few norms. Attracting outside equity capital involves in giving up a portion of ownership in the concern by selling stock. ( ”the SBA ” eating houses USA, November 1996, pp 16-19 )

Economic scheme rates concatenation hotels holding more advantages. However independent hotels issues might differ for in comparison to ironss, sing quality, operations, productiveness consistence. Merely long standing bond between the providers and independent hotelkeepers can turn out better advantage. Chain hotels use centralised cost control system as their female parent company policy and ordinances. However independent hotels are excessively able to buy POS systems that have standardized but extremely complex package. ( ” Mahmood Khan, eating house franchising, 2nd edition, New York ; John Wiley and boies ; 1999 )

Inexpensive, rapid enlargement:

Lodging constitutions can rapidly turn the figure of belongingss under a trade name name given the comparatively limited capital investing required to publish concatenation hotel compared to developing belongingss on their ain.

Profitable beginning of gross:

Franchisors generates from the both initial fees upon understanding every bit good as ongoing royalty fees with grosss. In add-on, fees may besides be generated from extra services.

( George p Hartmann, Stephen Rushmore, Dana Michael Ciraldo, John Tarras, hotel investing enchiridion, Boston: Warren Gorham and Lamont, 1997, pp 18-1 )

Harmonizing to Porter ( 1979 ; 1980 ; 1985 ) , organisations pursue a scheme of distinction aimed at separating their merchandises and services from their rivals. The scheme and construct used by Brits Inn was a first in the UK hotel industry history, and seemed to fit the characteristics of a house looking for invention. Second, the scheme of ‘100 % Satisfaction guaranteed ‘ narrates a zero-default service committedness. To maintain this service promise, the company has made an effort to better the quality of both its hardware and package.

Critical analysis:

Since 1987 the rate of volatility of concatenation hotels has increased at a faster gait than independent hotels – although ironss are still less volatile. But for past few old ages, as in slow economic system, scenario changed alot. Performance declined, particularly since after station 9/11. Subsequently the demand was more consistent and belongings directors were more stable with their rates.

In response to the slowed economic system clip, most independent hotelkeeper lowered rates and slowed down the all sort of cost on the short term footing. It is non plenty to vie with the chained hotel industries that have greater fiscal power to remain longer in the competition. Due to turning and developing planetary market, every clip hotel industry faces new challenges and chances. The success defines province as one survives the challenge and leads the competition. . These driving forces may include the globalization, cognition based environment, employees ; add on services, value add-on to the client who are reiterating the experience.

Direct sale: – sale people ever comes to run into their mark as there is great demand for the several hotel but if the demand is non appropriate in that instance ROI falls for the sale representative. In that scenario, an independent hotel industry needs to repair a database for the possible concerns and reach them for the hotel use.

Globalization is besides one of the cardinal factors to b considered in these yearss. Every administration is spread outing its consumer ‘s base as a consequence every domestic company is acquiring converted into transnational companies. Cordial reception houses or administrations are doing their base to the all states as a consequence client demands their known hotel to the other state as good. In that scenario, concatenation hotels industries do survive as there is no range for the independent hotels. Renewal of services and those services get liked by the client who are sing the same hotel 2nd clip as outlook keeps turning with the clip.

Internet Presence. The Web is one of the most cost effectual agencies to make possible clients, and is the great equaliser. High profile hotels, big, little, independent, or chain-affiliated hotels, all have the same chance on the Web when done with expert planning and execution. The independent hotel, when its web site is like an expert executed, will have as much “ air clip ” as the concatenation hotels. Independent hotels, with limited resources, do non hold to trust on anything other than the Internet, to hold possible clients find them. Properly developed, executed, and maintained, the Web will, at a minimum cost, efficaciously make local, domestic, and international markets. However the web site must be effectual for a ballad individual to make up one’s mind which attack to take. Therefore one must trust on adept advice and to hold a customized program to carry through short term ends every bit good as guarantee that the Web site is good positioned for future technological progresss and for promotions with the hunt engines, in order to minimise fiscal hazards


This analyzes the historical public presentation of concatenation hotels and independent hotels. It besides attempts to turn out or confute the hypothesis that concatenation hotels are less volatile than independent hotels. It besides concludes that concatenation hotels are lasting better than independent hotels. Chain hotels are strong in footings of finance and budgeting, in short capitalisation. They have a well focused yarn to follow towards success.