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At its start, the tourism industry existed to serve a select few members of the populations – those who traveled for trade or diplomatic reasons (Lattin, 2008). People traveled because they had no other choice and it was most often not a leisurely or pleasurable experience. Over time, however, technology advanced and the standard of living increased – giving way to new and varied customer segments for the hospitality industry to take on. With the spread of various method of transportation – ships, cars, trains, airplanes – the world became smaller and more accessible. As countries industrialized and wealth trickled down, travel became more attainable for everyday people. As travel became more commonplace, the hospitality industry was tasked with meeting the new array of needs. It responded at first by categorizing travelers into three categories: transit, vacation and grand. These categories gave way to the segments we know today: budget/economy, mid-scale and upscale.
In the beginning, mercenaries, merchants and pilgrims moved slowly across the land, stopping occasionally in a person’s home and sharing a bed with strangers (Lattin, 2008). Very few people traveled at this time so it didn’t make sense for there to be dedicated hospitality centers of any kind – there just wasn’t a market for it. As roads began connecting villages and towns, people began to move further. In the mid-18th to early 19th century, English inns provided cleaner and more comfortable accommodations than ever before. These inns formed the basis for one of the first three hospitality industry market segments – “transit” (Lattin, 2008). Transit hotels provided cheap, overnight lodging to people on short stays. Transit hotels eventually morphed into the budget/economy lodging options we know today, like Motel 6 or Knight’s Inn. These budget hotels are often located near major freeways because they function as a stop along the way rather than the destination. For this reason, they provide the bare necessities – a bathroom, a bed and limited service – but usually for less than $80 per night. Roadtrippers and backpackers alike spend the night and are gone in the morning.
Vacation hotels date back to the Romans and their cultural obsession with baths, spas and mineral springs. These “health vacations” contributed to the development of resorts and the concept of multiple hospitality services being housed in one place to benefit a group of travelers. So became the market segment of mid-scale hotels – providing guests with a higher level of service for a longer stay than the inns of the past. As time progressed this mid-scale bracket of travel became more accessible, no longer limited to the French and Roman elite, but it remains a pricier option than today’s budget hotels. Business travelers, convention-goers and families can expect to fork over between $80 and $150 a night at places like Holiday Inn Express or Best Western. However, they can also expect more personalized service, nicer rooms and maybe even a continental breakfast during their few nights there.
The Grand Tours of Europe prior to the French Revolution were limited to the educated elite and bred some of the most grandiose hotels in the world (Lattin, 2008). The Grand Tours inspired grand hotels, with luxurious furniture and architecture, highly personalized service and gourmet quality food. This trend carried over into modern times in the form of upscale hotels like the Radisson, Sheraton and Ritz-Carlton. For upwards of $200 – $300+ a night, high-end customers can expect fine dining, lavishly adorned rooms and facilities and extensive guest services that include very fine restaurant options.
While it is easy to segment the lodging industry by price point, the market has evolved so much recently that to do so would be blatant oversimplification. The internet has completely overhauled the hospitality industry and has made possible a wide variety of new trips. A 2015 survey on behalf of Hilton Worldwide found that “51% [of travelers] would prefer a trip that takes them out of their comfort zone” . This belief (most likely fueled by millennials) defies all previously-held ideas of what a vacation should be – relaxing, comfortable and easy. Where vacationers before us wanted to stay in a fancy French hotel overlooking the Eiffel Tower or gawk at the Coliseum before retreating to their lavish Italian suite, vacationers of today seek out new and different travel experiences. The proliferation of internet planning tools combined with this divergence from comfort have created massive niche markets and empowered travelers to custom tailor their trips more than ever before. People plan entire trips around their hobbies and interests, whether it is food and wine or cultural experiences or even investigating and experiencing the occult (Video Education America, 2015). Gone are the days of everyone wanting a grand tour of Europe. Among these niche markets are Glamping, Eco-Tourism and unique experiential Airbnbs.
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