Research by Brotherton, 1999; Lashley, 2000; Lashley and Morrison (eds.), 2000, Paul Slattery (2011) pointed out three domains that reflect the evolution of hospitality over time:

  • The private domain, where hospitality is defined as “the giving of food, drink and sometimes accommodation to people who are not regular members of a household (Lashley and Morrison 2000);
  • The social domain, where – according to Lashley (2000) – the inclusion of the social aspect enables the understanding of “social settings in which acts of hospitality and acts of hospitableness take place together with the impacts of social forces on the production and consumption of food/drink/and accommodation”, and
  • The commercial domain, as it is presented, “is as daft as interpreting guests of the family as customers, calculating the return on investment for the family from any hospitality provided to outsiders or of conceiving of a chain of households to which can be applied the techniques of portfolio management”.

These three major domains – private, social and commercial – are also the bases for understanding different definitions of hospitality, encompassing the basic characteristic of being hospitable as well as its role within a society and its role as the foundation of a type of business as well. However, the three-domain approach does not explain how the hospitality industry transformed over time.

The modern industry began to emerge in a recognizable form with the development of hotels and resorts in the 18th and 19th centuries. The Industrial Revolution helped to fuel travel, tourism, and hotel stays – not only was transportation becoming more accessible, but for the first time in history, workers were also granted vacation time. Consolidation and concentration of the hospitality industry started already in the 19th century. The importance of real estate and the huge investments necessary to create a major hotel propriety also changed the structure of the business.

In the 20th century, new business models began to appear. A major split in the hospitality business brought about dramatic changes in the division of work. The two domains that emerged from this split, operations management on the one hand and real estate/asset management on the other, became more and more clearly defined as separate businesses.

Investment funds and more aggressive bank policies put a great deal of pressure on the management of hospitality companies, increasing the importance of short-term profitability. Because of the intensity of capital expenditure (CAPEX) in real estate (RE), the balance between operations management (OM) and asset management shifted in the direction of the latter. The hospitality industry began offering more and more investment opportunities thanks to its double capability of producing economic value, via both RE and OM. Of the three domains mentioned above (private, social, and commercial), the commercial domain came to dominate the other two. Hospitality became a business like any other, and with this evolution, a greater degree of business administration professionalism became necessary.

At the end of the 20th century and at the beginning of the 21th century new elements became tremendous important: Brands, Distribution and Technology. In our next article (H2) we develop this issue.

About the Author

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Ray F. Iunius Directeur Business Development at Lausanne Hospitality Consulting SA

Prof. Dr Ray F. Iunius is the author of various academic and professional articles published by journals in the management of services, technology, and innovation. He is also the author of a number of books such as « Industrie de l’accueil », « Hôtellerie de Luxe », « La gestion des spas », “Un Hôtel, un modèle ?” in de Boeck editions and co-author of the “Lausanne Report on the future of Hospitality Industry.”

He is the founder of the Ecole hôtelière de Lausanne Institute of Technology and Entrepreneurship (EHLITE), the Institute for Innovation and Entrepreneurship (INTEHL), the Students Business Projects (SBP), the EHLITE magazine, and the Chair of Innovation Paul Dubrule.

Ray earns a BSc, MS and PhD in Technical Sciences from the University of Transylvania Brasov and an MBA and PhD from the Faculty of Business and Economics (HEC) of the Lausanne University. He is currently Director of Business Development at Lausanne Hospitality Consulting, an Ecole hôtelière de Lausanne and Swiss Hotel Association company.