Different types of business within the hospitality industry
This article aims to explore different types of business within the hospitality industry. Hospitality is one of the biggest industries in the world and contributes immensely to the global economic output. It is an industry that connects different types of business with each other.
Hospitality businesses have been around for centuries, with the earliest forms being inns and taverns that provided lodging and meals to weary travellers. Over time, the industry has evolved and expanded, which now includes a vast array of businesses catering to various segments of the population.
However, these businesses usually fall under four broad categories i.e. accommodation, food and beverage, travel and tourism, and entertainment. The discussion that follows aims to explore these four types of hospitality businesses in detail.
Accommodation businesses within the hospitality industry
A broad sector of the hospitality industry is accommodation (lodging) comprising of different types of hotels and facilities that have the provisions of overnight accommodation for people in travelling. Budget hotel, luxury hotel, spa hotel, hotel resort, boutique hotel, and bed and breakfast are some of the most important players in this industry.
In recent years, there has been a significant increase in the number of boutique and lifestyle hotels, as travellers increasingly seek unique and personalised experiences. Additionally, the rise of online booking platforms and the sharing economy has resulted in the growth of alternative accommodation options such as vacation rental homes and serviced apartments.
According to the World Tourism Organization (cited in WorldAtlas, 2023), the total number of visitors visited France in 2019 is 89 million. In the same year, 83 million people visited Spain and 80 million visited the USA.
Likewise, 63 million visited China and 36 million people visited the UK. Out of these so many great millions, only a small number of visitors stayed with friends and families. The rest stayed in hotels and similar facilities.
It is worth noting there were 1.4 million employees in the U.S accommodations industry in December 2020 working in around 70,000 accommodations (ITA, 2023). The accommodation sector attracts a lot of FDI from around the world every year.
Food and beverage businesses within the hospitality industry
Food and beverage is one of the largest sectors within the hospitality industry. Services within this sector range from preparing food to presenting it on the customer table. Fast food, fast casual, fine dining, and casual dining are some of the most popular types of restaurants in this sector.
The restaurant segment of the global hospitality industry has seen significant growth in recent years, driven by factors such as urbanisation, rising disposable incomes, and changing consumer preferences. As customers become more adventurous and discerning in their culinary choices, restaurants are continually innovating and adapting their menus and service offerings to meet these evolving demands.
McDonalds, Burger King, Subway, KFC, Five Guys, Chipotle Mexican Grill, Harvester, TGI Friday’s, Pollen Street Social, Dinner by Heston Blumenthal, and The Ledbury are some of the most famous restaurants in the USA, the UK, and indeed in many other countries. In fact, McDonald’s is the most valuable fast-food brand in the world with an estimated brand value of about 154.9 billion U.S. dollars (Statista, 2023).
Travel and tourism businesses within the hospitality industry
There are different types of business within travel and tourism sector that include but not limited to trains, airlines, cruise ships, and tour operators. Travellers spends billions of dollar on passenger air transportation services in the USA. In fact, air transportation services support around 900,000 jobs in the USA. Likewise, travel and tourism has been one of the the fastest growing sectors in the UK in employment terms for a long time.
The airline industry has witnessed significant growth and transformation in recent decades, driven by factors such as deregulation, technological advancements, and the increasing demand for air travel. The rise of low-cost carriers and the emergence of new aviation markets have further fuelled the growth of the industry, providing customers with greater choice and flexibility when it comes to air travel.
British Airways, American Airlines, Emirates Airline, Singapore Airlines, Air Canada, Air New Zealand, Lufthansa, and Qatar Airways are some of the most popular airlines in the world. According to Flights Finder (2022) Southwest Airlines, Easyjet, Ryanair, JetBlue Airways, and AirAsia are the cheapest ones.
Tour operators are businesses that provide travel packages and services to customers, combining various components such as accommodation, transportation, meals, and sightseeing activities. They play a crucial role in the hospitality industry, as they help streamline the travel planning process and ensure that customers have a seamless and enjoyable experience during their trips.
Entertainment businesses within the hospitality industry
Entertainment is sometimes overlooked in the discussion of different types of business within the hospitality industry. But the truth is it is a significant part of travelling now-a-days. No wonder why many top tourism destinations offer zoos, museums, theme parks, theatres, marinas and many more that captivate and entertain tourists.
Entertainment and recreational businesses provide customers with memorable experiences and help enhance the overall appeal of a destination. From educational and cultural institutions to thrilling amusement parks and live performance venues, these attractions cater to a wide range of interests and preferences.
Disneyland, Lego Land, Madame Tussauds, Magic Kingdom Park, Cedar Point, British Museums, Walt Disney World Resort, PortAventura, Ferrari World, Alton Towers, and Tivoli Gardens are some of the most popular entertainment choices of travellers.
Summary of different types of business within the hospitality industry
The hospitality industry is a diverse and dynamic sector, encompassing a wide range of businesses that cater to the needs and preferences of customers. As it continues to grow and evolve, businesses must adapt and innovate to stay competitive and meet the demands of their customers.
In today’s fast-paced world, hospitality businesses play a vital role in the global economy. They not only create job opportunities but also contribute significantly to the GDP of many countries. Furthermore, the hospitality industry is often seen as a significant driver of economic development, as it attracts investment, promotes tourism, and boosts the overall image of a country or region.
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Last update: 05 May 2023
ITA (2023) Travel, Tourism, & Hospitality Industry available at: https://www.trade.gov/selectusa-travel-tourism-hospitality-industry (accessed 05 May 2023)
Flights Finder (2022) Top 10 Cheapest Airlines In The World, available at: https://www.flightsfinder.com/en-ca/blog/details/top-10-cheapest-airlines-in-the-world (accessed 01 May 2023)
Statista (2023) Most valuable QSR brands worldwide 2021, available at: https://www.statista.com/statistics/273057/value-of-the-most-valuable-fast-food-brands-worldwide/ (accessed 05 May 2023)
WorldAtlas (2023) The World’s Most Visited Countries, available at: https://www.worldatlas.com/articles/10-most-visited-countries-in-the-world.html (accessed 05 May 2023)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.