HTM404SA - International Hotel ManagementApplied Research Assignment
THE IMPACT OF GLOBALIZATION ON THE HOSPITALITY INDUSTRY
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--------------------------------------NAME: Mary Luu
ID NUMBER: 050-001-122
DATE: Feb. 11th, 2013
INSTRUCTOR: Ramesh Poredi
COURSE NAME: HTM404SA
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•∘ HTM404SA - International Hotel Management ∘•
THE IMPACT OF GLOBALIZATION ON THE HOTEL INDUSTRY
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Ever since the time that people have begun to travel, globalization was established
to be the main drive to the hospitality industry. The hospitality industry stood as a
necessity to take care of those who were traveling. From the time of preachers, traders,
adventurers and warriors, globalization has always been there, but only recently has it
been defined. (“Globalization’s”). In the 21st century, to keep up with the rising levels of
globalization in the hotel industry, there’s a need to understand not only the positive, but
also the negative impacts of globalization in how they operate in their changing
environment. I’ll also talk about the growth and rise of one of the most respected brands in
the world - the Hilton Hotels. Throughout the evolution of this famous organization, the
Hilton has also gone through the both positive and negative impacts to get to where it
stands today. I’ll be sharing with you the development and highlights throughout the
organization journey.
To get started, I’ll explain the different types of positive impacts globalization can
have in the hotel industry. Exposure to different cultures is one of them as to how hotel
employees are able to adapt more knowledge as they learn about different cultures of their
guests. A larger market is another positive impact due to globalization. Now a day, there
are a number of reasons as to why people travel; whether it is for business, holidays,
health, or much more. By having guests come in and spending money, it acts as a multiplier
effect and in result, foreign exchange increases. It gives a great economy boost by having
globalization help process more money into the country. Another positive impact regards
technology advancement. Hospitality organizations need to continuously improve and
upgrade their products and services to appeal to as many guests as possible. An example
would be how Singapore Flyer is able to keep their guests happy with their faster and
newer technology in the hotels. This leads into the next positive impact which focuses on
creativity. As they are constantly improving their technology, they are also constantly
coming up with new ideas to draw to the guests’ needs and wants. Job opportunities count
as another positive impact because with the increasing amount of visitors coming in to our
country, more employees are needed in the industry to be able to serve to their needs. Not
only are job opportunities increasing, so is the need for more travel industries. These
include any types of transportation services such as airplanes, ships/cruises, and/or
automobiles. The final positive impact is the developed international services/cuisines. By
having guests come in from all around the world, hotel industries have improved their
recipes and other services to be able to connect to the guests’ cultures, customs, cuisines,
and languages. Locals are also able to experience these services as well. (“Discuss”). Though
there are many positive impacts listed, of course there will be negative impacts of
globalization to the hotel industry as well.
Here are a number of negative impacts of globalization on the hospitality industry.
It’s usually cheaper to hire people from other countries to work in the hotel industry, but
problems may arise as to when they communicate with the guests because of the language
barrier. As a result, most guests get annoyed. Cultural barriers act as another negative
impact because since your guests come from different cultures, you must make sure not to
offend them. An example of this is how Muslims do not eat pork. You must make sure that
their foods do not have any pork in them unless they ask. It’s important to remember that
with what one culture might be fine with; it may be insulting to another. Another negative
impact would be the events and/or disasters occurring in other countries. An example
would be if there was an increase in terrorism because it would result in a decrease to
people spending money and traveling. They would limit themselves to specific countries.
Seasonal employment is another negative impact because after the peak periods are done,
a lot of guests go back resulting in jobs disappearing. An example would be this place in
India called Goa. They only receive their income during peak season which is Dec-Feb and
April. All the other months leave them with no business which calculates to no income and
no jobs. I know I’ve mentioned earlier in the positive impacts that guests love the updated
technology, but some do not. This is because by having everything become more
technologized, this removes the human touch which a lot of guests do not like. Another
negative impact is concerned with the developing countries. Those countries tend to lose
out on visitors because they aren’t able to keep in competition with their lack of
technology. An example would be Africa. Even though they have beautiful natural
attractions, they do not have the infrastructure and technology to appeal to most of the
travellers. An increase in crime rate is another negative impact. Although you’re getting
more visitors, a number of them can participate in pick-pocketing, hustling, rape and
smuggling. On top of crime rates, you also have to deal with visitors who come and spread
their bad habits to the local youth. This involves an increase in drug sells/uses, and
promiscuous actions. Globalization can also harm the eco system. This is where litter is
being throw everywhere and in result, can cause people to become sick, encourage other
people to do it too, have green areas be removed, have wildlife be harmed/killed, and plays
a contributing factor to global warming. The final negative impact globalization has on the
hotel industry is the loss of cultural pride and values. This is where you change your service
and products to match the customers’ needs and wants. In result, as you change yourself to
behave more like the guests that come from other countries, a loss of culture of your own is
shown. (“Discuss”). Whether a hotel has gone through these negative impacts, this does not
mean that they are set to failure. Definitely Hilton Hotels has been able to survive pass the
negative impacts and I’ll share with you the development and highlights the organization
has experienced.
The Hilton Hotels Corporation today stands as a top hospitality company that not
only owns, but manages and franchises over 2,000 hotels throughout the country. (“Gale”).
Taking a look back to how it all happened, it all started in 1919, when Conrad Hilton –
founder of the Hilton Hotel bought his first hotel called The Mobley in Cisco, Texas. He
purchased other Texas hotels over the next couple years having one become the first to
represent his name called the Dallas Hilton. This occurred in 1925 and during this time, air
conditioning hadn’t been invented yet. Conrad was a smart man though because he made
sure that none of his guestrooms were to face the western sun. Two years later, he
expanded to Waco, Texas and opened his first hotel with cold water and air conditioning.
Later in 1943, he had become the first coast to coast hotel group in the U.S from purchasing
the Roosevelt and Plaza hotels in NYC. Two major events happened in later 1946. The
Hilton Hotels Corporation had formed, and had become the first hotel company to be listed
on the New York Stock Exchange. A year later, the Roosevelt Hilton installed televisions in
all their guest rooms and made history because they were the first hotel in the world to do
so. Two years later, two big achievements have been made. The first achievement was that
Hilton International was created with an opening in Puerto Rico of Caribe Hilton. The
second one was that Time magazine had presented Conrad as the cover. This was a big
recognition because he was the first hotelier to appear on it. In 1954, Conrad had bought
the largest estate deal ever during that time which was the Statler Hotel for $111 million
dollars. A year later, their first central reservation office was created called Hilcron.
Through telephone, telegram or teletype, reservations could be made at any Hilton. In the
same year, they started a program for every hotel in their branches to have air conditioning
and they also had an opening of the Hilton Istanbul. In 1958, Hilton presented their own
Hilton Hotel cards which were a premier travel card and entertainment card. A year later,
Conrad created his first airport hotel at the San Francisco airport. 1965 was a unique year
as to how they had their opening of Lady Hilton. This was the first hotel that mainly
targeted on the female market. The hotel had floors strictly available for female guests that
came with special amenities. A year later, Conrad’s son Barron took his place as president
of Hilton Hotels Corporation. The following year Conrad got assigned the position of
chairman. Later in 1969, Hilton opened their first Double Tree hotel in Scottsdale. The
Double Tree hotel is a full-service hotel. A year later, Hilton entered the domestic gaming
business by becoming the first NYSE-listed company from buying the Las Vegas
International and Flamingo Hotel. He renamed Las Vegas International to Las Vegas Hilton.
In 1979, at the age of 91, the long lived founder had passed away. Business stayed stable
but it wasn’t until 1982 that it was recognized that Conrad Hotels had an operating
network of luxury hotels and resorts. Two years later, the first Embassy Suites was opened
in Kansas City and also the first Hampton Inn in Memphis. Embassy Suites is a full-service
hotel where Hampton Inn is a focused serviced hotel. In 1987, Hilton presents their guest
loyalty program called Hilton HHonors™. Two years later, they opened their first
Homewood Suites Hotel in Omaha. Homewood Suites is a focused serviced hotel. During
the same year, Hampton Hotels were the first to provide a 100% Satisfaction Guarantee. If
they did not satisfy you with their friendly service, clean rooms, comfortable surroundings
everytime; you did not have to pay. In 1990, they unveiled 4 locations for the Hilton Garden
Inn. Today there are more than 500 properties. Hilton Garden Inn is a focused service hotel.
In 1994, Hilton HHonors™ were able to offer members points both in being members and
to air miles. A year later they launched their first website. In 2002, Hilton Worldwide
Resorts promoted themselves to a vacation-ownership subsidiary. By doing so, they were
able to offer premium resorts and exotic vacation experiences to their members. Five years
later, Hilton Hotels Corporation and The Blackstone Group’s real estate merge with
corporate private equity funds. In 2009, Hilton Hotels was known as the largest full-service
hotel branch in the world by expanding to 76 countries. Two years later, Home2 Suites
opened its first location in Fayetteville in the extended-stay market. Home2 Suites is a
focused serviced hotel. Hampton Hotels also made an appearance in the Entrepreneur
Magazine’s Franchise #1 Franchise opportunity. (“Explore”). This is where Hilton stands
today, but of course it’s not the end of the organization’s journey. They were able to carry
on the dream after Conrad Hilton had passed away, and they can certainly keep going. “As a
result of his commitment, leadership, and innovation, today Hilton is one of the most
respected brands in the world.” (“Explore”).
All in all, I understand that globalization in the hotel industry has occurred and is
still occurring. Hotel industries need to maintain awareness to both the positive and
negative impacts that globalization can have and do as much as they can to alter the
impacts to use to their advantage to gain as much business and loyalty from their guests as
possible. Although I did not talk about any negative impacts the Hilton Hotel Corporation
has had to go through, the impacts indeed were there. As to see how successful they are
today, that means that they were able to work pass the negative times and proceed to keep
franchising to get their name well-known and admired.
•∘ Works Cited ∘•
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"Explore our history and heritage." Hilton Worldwide, Hilton Worldwide. 2012. Web. 2
February 2012. <http://www.hiltonworldwide.com/about/history/>.
"Gale Directory of Company Histories: Hilton Hotels Corporation." Answers, Answers
Corporation. 2012. Web. 1 February 2013.
<http://www.answers.com/topic/hilton-hotels-corporation>.
“Globalization’s effect on the Hospitality Industry.” Gened 111’ Weblog, WordPress.com.
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globalizations-effect-on-the-hospitality-industry/>.