Hoteliers have changed how they do business as a result of new technology and changing consumer behavior over the past twenty years.

Over the past few decades, several key aspects of the lodging industry have changed, allowing hotels to enhance their products, attract more guests, and expand their businesses.

Nevertheless, these changes have also affected the bottom line, which is becoming more and more difficult to attain.


Marketing and Distribution

In the past couple decades, the industry has experienced significant changes in marketing and distribution costs

Due to the business model, which primarily relied on brand and travel agents and paid OTAs a 10-percent commission, the delivery cost for getting guests into hotels decreased significantly.


Furthermore, traditional marketing methods – such as billboards, newspapers, televisions, radios – have been replaced by digital formats, including Facebook, Google, and other social media advertising.


Consumer Behavior

Online travel agencies and technology have made consumers more sophisticated and educated than they were 20 years ago. Many aspects of the industry have been affected by that sophistication.

A few years ago, only frequent business travelers really understood the differences between the brands.

The consumer now has the ability to research and very thoroughly understand their options thanks to online ratings and a smaller world footprint.

Ownership and Assets

The hotel industry’s current darling, the select-service hotel, emerged to meet the needs of the new consumer-and that’s not necessarily a bad thing.

Hotels with select services are often more flexible in adapting to consumer needs than hotels with full services.

A select-service hotel is cheaper and faster to develop and renovate.


Hotel operations became more complex over time as the industry shifted. Companies that provide third-party management services are the answer.

As technology and the internet became more and more part of our society, running hotels became more complicated, and third-party operators and franchisees became necessary.

In spite of the impact on smaller operators, it delivered what consumers wanted.

Investors’ willingness to pool equity also led to the emergence of third-party operators. By having multiple investors/owners, it is simpler and more productive to allow a third-party manager to operate properties and accept a lower return on investment.


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