Tourism – The “Hotel”

Submitted by Malcolm Noden
May 20, 2019

The primary ownership and operating details about the hotel business are, or used to be, easy to describe. The would-be innkeeper purchased a piece of land and built a hotel upon it. He hired some staff people, and he opened for business. The guests come, stay in the hotel, pay their bill and then leave. Repeat and repeat.

But then a new version came along. Now, because land is so expensive the innkeeper leases the land on a long-term lease, builds a hotel upon it, and so we have two parties in the business; the landowner and the hotelier. Repeat and repeat.

Then a newer version comes along when the innkeeper realizes that he needs some greater exposure to the potential market, and so he hires a big hotel brand name management company to manage the hotel. Now we have three parties in the business; the landowner, the hotelier, and the hotel brand management company. Repeat and repeat.

Then a newer version comes along. A big hotel brand decides to franchise the brand name. The hotelier signs a franchise contract. Now we have four parties in the business; the landowner, the hotelier, the hotel brand management company, and its franchise. Repeat & repeat.

Then comes along comes the changes to the meaning of the word hotel. We get a few approaches that all seem to do well in the market. First came the Bed & Breakfast. Owned & operated by those who had a couple of spare rooms in the house, and thought that overnight guests in them, at a “reasonable rate” and complete with breakfast in the morning, would be a great way to earn some extra money without making any capital outlay. Then, they became so popular and appealing, and so the next step was to make more rooms available, and so we have the B&B Inn.

Then an organization came along that decided to make a whole business out of the use of private dwellings, and so we next have Airbnb, which put together those with an extra bedroom or two in their homes, with an on-line reservation and information system, and world wide exposure to space availability in the most informal of overnight accommodations.

Thus, the question arises, what is an hotel? Merriam Webster defines it as: “An establishment that provides lodging and usually meals, entertainment, and various personal services for the public.” They also provide a list of synonyms, some of which may not be familiar. To wit: “auberge, caravansary (or caravanserai), hospice, hostel, hostelry, inn, lodge, public house, tavern.”

Not only is this question of interest to the travelling public, but, as you can well imagine, it is of major interest to civil licensing, and zoning authorities in every jurisdiction!

Another question, which is of interest to those of us who live on Amelia Island, is, that in light of these circumstances, and as more and more tourists come to us, should we be promoting the development of larger traditional hotels, which are cost efficient vehicles for increasing our tourism tax revenues, or more, smaller establishments, as some have recommended, in order to help preserve the feel of the small community by the beach that is our common delight? What say you?

Editor’s Note: Malcolm A. Noden, who is the (Retired) Senior Lecturer in Management, Economics, Marketing and Tourism at the School of Hotel Administration, at Cornell University, is a well-known expert in the applied economics of hospitality and tourism policy, promotion and development.

Noden is the past Chairman of the New York State Tourism Education Task force, an advisory board appointed by former Governor George Pataki of New York. Noden serves on the editorial board of TEOROS International, a theoretical research journal for education in tourism, and was the Cornell University representative to, and a founding member of, the World Tourism Organization, Educational and Training Board.