Forces Affecting
Growth and Change in
the Hospitality Industry
Chapter Two
The Purpose of this Chapter
The hospitality industry, as it exists today and will
probably be tomorrow, is the result of the interaction
of basic market forces. We will look at the most
basic of these forces below.
The first is demand for hospitality services
from consumers.
 The second is the supply of the products
and services created by hospitality service
companies.

Demand in the Hospitality
Industry
 Demand
is the most basic force driving
the hospitality industry’s development.
This demand translates into customers,
so to understand demand we must first
understand our...
Customers!
Demand translates into customers

We need to look at our customers from
three different perspectives:
 We
need to understand what the population’s
changing age patterns are
 We will explore how they affect the demand
for hospitality products
 We will look at other patterns of change, such
as:
the increase in working women
 the transformation of family structure
 the changes in income and spending patterns.

Demographics vs.
Psychographics
Demographics
The study of objectively measurable
factors in the population, such as age,
income, gender, sexual preference, marital
status, etc.
 Psychographics
Different patterns of activities, interests,
and opinions – the forming of “groups”

Structural Changes That Will
Shape Demand for Hospitality
Services in the Twenty-First
Century
Increasingly diverse population
 More women in the workforce
 Changing family composition
 Changing income distribution

The Changing Age Composition
of our Population
Baby Boomers
 Born 1946–1964
 Constituted nearly onethird of the population
in 2000
Generation Xers
 Born 1965–1975
 Have reputation as
worldly wise,
independent,
pragmatic, computer
savvy, ad-intelligent
consumers
Echo Boomers
 Born 1976–1994
 Children of baby
boomers
 Will nearly overtake
baby boomers in
number by 2010
Changing Family Composition
Households with children under 18
 Largest segment today—37 million
Households without children under 18
 Will increase 29% to 37 million by 2010
 Spend more than any other household
Changing Family Composition
Single-person households
 Growing because more people are
delaying marriage until completing their
education
 Good potential customers for the
hospitality industry
Changing Family Composition
Single parents
 Have relatively lower incomes
 Eat out less often than the average
American
 Less likely to be hotel customers or to
travel
Good Locations for
Hospitality Establishments
High-traffic areas
 Locations near major destinations
 Locations associated with scenic beauty

Hospitality Occupations
Expected to Grow More Quickly
Than the Total Workforce
Growth of U.S. workforce: 14%
 Chefs and cooks: 14%
 Servers: 15%
 Foodservice and lodging managers: 16%
 Flight attendants: 30%
 Travel agents: 18%
