Forces Affecting

Growth and Change in

the Hospitality Industry
Chapter Two
The Purpose of this Chapter
The hospitality industry, as it exists today and will
probably be tomorrow, is the result of the interaction
of basic market forces. We will look at the most
basic of these forces below.
The first is demand for hospitality services
from consumers.
The second is the supply of the products
and services created by hospitality service
companies.
Demand in the Hospitality
Industry
Demand is the most basic force driving
the hospitality industrys development.
This demand translates into customers,
so to understand demand we must first
understand our...
Customers!
Demand translates into customers

We need to look at our customers from
three different perspectives:
We need to understand what the populations
changing age patterns are
We will explore how they affect the demand
for hospitality products
We will look at other patterns of change, such
as:
the increase in working women
the transformation of family structure
the changes in income and spending patterns.


Demographics vs.
Psychographics
Demographics
The study of objectively measurable
factors in the population, such as age,
income, gender, sexual preference, marital
status, etc.
Psychographics
Different patterns of activities, interests,
and opinions the forming of groups


Structural Changes That Will
Shape Demand for Hospitality
Services in the Twenty-First
Century

Increasingly diverse population
More women in the workforce
Changing family composition
Changing income distribution
The Changing Age Composition
of our Population
Baby Boomers
Born 19461964
Constituted nearly one-
third of the population
in 2000
Generation Xers
Born 19651975
Have reputation as
worldly wise,
independent,
pragmatic, computer
savvy, ad-intelligent
consumers
Echo Boomers
Born 19761994
Children of baby
boomers
Will nearly overtake
baby boomers in
number by 2010

Changing Family Composition
Households with children under 18
Largest segment today37 million

Households without children under 18
Will increase 29% to 37 million by 2010
Spend more than any other household
Changing Family Composition
Single-person households
Growing because more people are
delaying marriage until completing their
education
Good potential customers for the
hospitality industry
Changing Family Composition
Single parents
Have relatively lower incomes
Eat out less often than the average
American
Less likely to be hotel customers or to
travel

Good Locations for
Hospitality Establishments
High-traffic areas
Locations near major destinations
Locations associated with scenic beauty

Hospitality Occupations
Expected to Grow More Quickly
Than the Total Workforce
Growth of U.S. workforce: 14%
Chefs and cooks: 14%
Servers: 15%
Foodservice and lodging managers: 16%
Flight attendants: 30%
Travel agents: 18%