Industry Analysis - Hotels, Motels, and Other Lodging Places Essay Example
Industry Analysis Paper
Hotels, Rooming Houses, Camps, and Other Lodging Places
SIC Code 70
Table of Contents 1. Introduction (Very Important)
2. The Industry's Dominant Economic Features
Market size
Answer: In terms of revenue $90 billion
Scope of rivalry
Answer: Rivalry is very high in this industry because there are many firms that have very similar products
Growth rate and what stage of the life cycle is the industry in
Answer: In terms of revenue 3.2% growth, the industry is in the emerging industry stage of the life cycle because the industry is re-emerging as international and domestic travel are continuing to grow, the hotel industry will grow along with it.
Number of rivals and their relative size
Answer: There are hundreds of different hotel chains, but there are 6 major players in the industry. The top firms in the industry make up approximately 20% of the entire industry.
Prevalence of forward/backwards integration, channels of distribution, pace of process and product technology change
Answer: Some firms have tried to forward integrate into the food and beverage industry or the health club industry with little success. The Marriott ended up having to backwards integrate after trying to tap into the food and beverage industry when it wasn't profitable for them. Technology change is not occurring much in the industry. Some firms are beginning to try and open some special boutique chain hotels but they will not open until the next year.
Whether products are highly differentiated or very similar
Answer: Very similar
To what extent are economies of scale in purchasing, distribution, advertising, etc. important
Answer: Economies of scale are somewhat important when it comes to purchasing, distribution, advertising, and other things in the industry because when large players like Marriott and Hilton control a lot of the market, they can demand lower prices from their suppliers, can demand to have their
Hotels, Rooming Houses, Camps, and Other Lodging Places
SIC Code 70
Table of Contents 1. Introduction (Very Important)
2. The Industry's Dominant Economic Features
Market size
Answer: In terms of revenue $90 billion
Scope of rivalry
Answer: Rivalry is very high in this industry because there are many firms that have very similar products
Growth rate and what stage of the life cycle is the industry in
Answer: In terms of revenue 3.2% growth, the industry is in the emerging industry stage of the life cycle because the industry is re-emerging as international and domestic travel are continuing to grow, the hotel industry will grow along with it.
Number of rivals and their relative size
Answer: There are hundreds of different hotel chains, but there are 6 major players in the industry. The top firms in the industry make up approximately 20% of the entire industry.
Prevalence of forward/backwards integration, channels of distribution, pace of process and product technology change
Answer: Some firms have tried to forward integrate into the food and beverage industry or the health club industry with little success. The Marriott ended up having to backwards integrate after trying to tap into the food and beverage industry when it wasn't profitable for them. Technology change is not occurring much in the industry. Some firms are beginning to try and open some special boutique chain hotels but they will not open until the next year.
Whether products are highly differentiated or very similar
Answer: Very similar
To what extent are economies of scale in purchasing, distribution, advertising, etc. important
Answer: Economies of scale are somewhat important when it comes to purchasing, distribution, advertising, and other things in the industry because when large players like Marriott and Hilton control a lot of the market, they can demand lower prices from their suppliers, can demand to have their