Locational strategies of international hotel chains

Multinational hotel companies, often integrated with tour operators, travel agencies and other businesses in tourist-generating or tourist-receiving countries, play a key role in the development and continuity of an international tourism industry in developing countries. In order to take advantage of benefits and minimise the unwanted adverse effects from multinational hotel involvement, developing countries need the planning, implementation and evaluation of carefully designed policies linked to their particular objectives. This paper reviews the potential benefits and costs of multinational hotel companies and brings together previously scattered critical policy issues in relation to them, while suggesting possible options for developing countries to follow. Seven critical policy areas are identified: establishment of the need for foreign investment; deciding on forms of involvement; deciding on the scale of hotel development; supporting sectoral linkages; supporting indigenous employment/training; monitoring business practices; and determining foreign investment incentives and regulations. It is argued that policies should be worked out in these areas and co-ordinated in order to achieve a balance between the benefits and costs of multinational hotel involvement in developing countries. Copyright © 2001 John Wiley & Sons, Ltd.

Multinational hotel development in developing countries: an exploratory analysis of critical policy issues†

Production has been a relatively neglected area of research within tourism, in contrast to the notable advances made in adjoining disciplines such as economic geography. A review of the trajectory of tourism development in the UK provides insights into how changes in consumption, in scale and ownership, and in the geographical organization of production are leading to new supply-side structures. There have been attempts to advance theoretical understanding and empirical knowledge of some aspects of the changing geography of tourism production, notably in respect of globalization, labour markets, firm structures, information technology and restructuring. However, there are more gaps than areas of advancement in this research frontier, and this provides the basis for outlining a future research agenda.

The geography of tourism production: Uneven disciplinary development?

A review of the findings of prior empirical research concerning hotel management contracts between owners and operators is undertaken. It is noted that management contracts have become increasingly commonplace in the international hotel sector and that gross revenue and gross operating profit are the most extensively used determinants of operator incentive fee remuneration. These findings present a platform for examining how revenue and gross operating profit are deficient in promoting owner-operator goal congruency. In light of this, return on investment (ROI) and residual income (RI) are examined as potential alternative determinants of operator reimbursement. Although it is appears that both ROI and RI as determinants of hotel operator fees would represent an advance in promoting owner-operator goal congruency, a rationale outlining how RI is preferable to ROI is outlined. © 2010 International Council on Hotel, Restaurant and Institutional Education.

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Hotel management contracts and deficiencies in owner-operator capital expenditure goal congruency

Hotel groups have expanded extensively over recent years, with key players now operating on a global basis. Presents a critical evaluation of the literature relating to the internationalization of hotel groups and previous success studies and prescriptive strategic management models in relation to multinational hotel groups. Addresses issues which include the measurement of internationalization, overreliance of profitability as a single measure of success and the dominance of western business cultures. Forwards proposals for a research framework designed specifically to investigate success in international hotel groups and to emphasize the need for “holistic” approach. Recognizes the need to research success using a multidisciplinary framework.

David Litteljohn

Papers

Towards an economic analysis of trans-/multinational hotel companies