Industry Overview: Hospitality and Tourism

Posted by The Editors on December 3, 2012
The hospitality and tourism industry has changed more than a little since the first motel, in San Luis Obispo, California, was opened in 1925. (Its rooms went for $2.50 a night.) Today, there are more than four million guest rooms in the country, and tourists and businesspeople spend about $550 billion each year on travel in the United States. The industry includes behemoths like Marriott, Hilton, Six Flags, and Disneyland and Walt Disney World, on down to out-of-the-way bed-and-breakfasts and roadside attractions like the Liberace Museum (in Las Vegas), the Cadillac Ranch (Amarillo, Texas), and the Dan Quayle Center and Museum (Huntington, Indiana).

Which means that the Gideons, who placed their first Bible in a hotel room in 1908, have a lot more work to do than they used to. But they're not the only ones. Today, the industry employs more than seven million people directly and even more than that indirectly. (For example, consider a waiter in a restaurant in Palm Springs, California, which is in the middle of the desert: His job wouldn't exist if it weren't for the fact that Palm Springs is a tourist destination.) Accountants, nurses, salespeople, lifeguards, park rangers, street cleaners, car rental agents, blackjack dealers, caterers, cruise directors, the actress in the Snow White costume, the clerk in the t-shirt shack, the tennis pro, the golf course groundskeeper-the industry employs these folks and many, many more.

Despite the size and complexity of the industry, today many of its arms are interconnected by technology. Computer systems now allow people to reserve airline tickets, rental cars, hotel rooms, and tours-all at the same time. These computer systems are called computer reservation systems (CRSs) or global distribution systems (GDSs).

Although many in the industry work in behind-the-scenes positions, those on the front lines-travel agents, front desk clerks, tour guides, and so on-must be enthusiastic and articulate. And in most any position, you'll need to have a love of service and a strong attention to detail. In the end, your job is about how satisfied you've made the customer.

It's been a very difficult few years for the hospitality and tourism industry. The economic recession has caused businesses, individuals, and families to cut back on their spending on travel, and fears of terrorism have made many folks even less inclined to travel. The results have included lower industry revenues, layoffs, and a tighter job market. Today, though, there are signs that people are starting to travel more and that the industry may be recovering. Industry analysts are expecting increasing demand for hotel rooms and seats on airline flights in 2004, with an increase in job opportunities in many sectors of the industry.

The Internet
The biggest change in the travel industry in recent years has been the rise of the Internet. It used to be that you had to speak with your travel agent, or call hotels and airlines directly, to make your travel plans. But as Internet usage spread, it became possible to use the new technology to research destinations and compare prices yourself, or visit websites that provide all that information in one place. Indeed, companies such as Expedia and Travelocity have become quite profitable doing just that. In 2003, 12 percent of lodging reservations were made online, and that number is sure to grow in coming years.

One of the changes wrought by the Internet has been to make the travel agent and reservations clerk less necessary to making travel plans. According to industry experts, the Internet has also raised the number of rooms occupied per night-but it's also caused lower revenue per room, as the ease of Internet comparison shopping and Internet-only promos have increased competition among hospitality providers.

Niche Markets
As in many other industries, the big players in the hospitality and tourism industry have become vastly more efficient due to technology and management advances in recent years. These days, smaller players just can't compete on price. So how can smaller hotels, motels, and tour operators compete with bigger players who pay half what they do for supplies? For many smaller players, the answer is finding a market niche that is not adequately served by the big players and becoming a specialist in providing services for that niche.

Although some market niches are already served by big industry players (think: golf resorts, or tour operators who put together trips to New York City to see Broadway plays), there are plenty of niches that smaller players focus on. For example, there are tour operators that focus on the gay male market, Christian- or Jewish-focused Jerusalem-tour packagers, back country-skiing tour guides, ecotourism resorts, and so on. If you love travel and have a passion for a certain place or activity, it's likely you'll be able to find a company that operates in that niche. The only problem is that many of these companies will be so small that they'll rarely have an open position for you to fill.

Hospitality and tourism is a big, hard-to-pin-down industry that actually consists of 15 or more specific sectors, including car rentals, restaurants, convention and meeting planning, airlines, State and National Parks, convention and visitor bureaus, and tour operators. That's way too much for us to look at here, though, so we'll stick to the following core sectors of the industry:

The lodging sector, which serves both vacationers and business travelers and which made $103 billion in revenue in 2002, consists of hotels, motels, bed-and-breakfast providers, hostels, and the like: places where you can stay the night. Lodging types include budget accommodations (e.g., EconoLodge, Super 8, and Motel 6), midpriced lodgings (e.g., Sheraton, Marriott), and high-end luxury hotels (e.g., W Hotels, Ritz-Carlton), as well as hostels, campgrounds, and bed-and-breakfasts. Major players in this sector include Carlson Companies, Cendant, Hilton, Marriott, Starwood Hotels & Resorts, Accor, and Choice Hotels.

These are destinations built around a specific activity (e.g., golf or skiing), attraction (e.g., Walt Disney World), or target demographic (e.g., Club Med destinations for singles and families, respectively). Unlike the lodgings sector, this sector is focused squarely on the vacation market and includes timeshare accommodations. Big players here include Walt Disney Parks & Resorts, Club Med, Sandals, Fairfield Resorts, Bluegreen Corp., Intrawest Corp., Vail Resorts, and American Skiing Co.

Las Vegas, Reno, and Atlantic City used to be the only places that came to mind when you mentioned the word "casino," but in recent years this sector has been growing in places from Louisiana to North Dakota and from Florida to California. Gaming businesses include casinos, riverboat casinos, racetracks, and racetrack casinos (or "racinos"). Casinos can be stand-alone attractions, or can be combined with lodging facilities (and in some cases, such as Vegas's New York New York, nongambling attractions) to make gambling resorts. This sector employed 351,000 people in 2002. Big players here include Harrah's, MGM Mirage, Caesar's, Mandalay Resort Group, and Trump Hotels & Casino Resorts.

This sector comprises all the places you might visit as your primary destination while on vacation, as well as all those places you might stop to check out en route to your primary destination. In other words, everything from amusement parks (for instance, Disneyland) and roadside attractions (such as the Salem Witch Museum) to notable natural landscapes (the Grand Canyon), famous or historical buildings (Graceland, the Alamo), and in some cases entire towns or cities (Branson, Missouri). Big players in this sector include the National Parks Service, Walt Disney Parks & Resorts, Busch Entertainment Corp., Paramount Parks, Universal Parks & Entertainment, Six Flags, Cedar Fair, and ClubCorp.

Travel Agencies and Travel Packagers
Travel agents and packagers help travelers plan their business trips and vacations. Travel agents help business travelers and tourists plan and purchase everything from airline tickets and car rentals to resort stays and attraction tickets. Travel packagers put together trips for individual tourists or groups of tourists, arranging for everything from hotel stays and restaurant reservations to tours guides, theater reservations, and sports lessons. Smaller travel agencies and packagers are more likely to focus on a single market, activity, or location. For example, one travel packager might focus on singles tours, another might offer only surf tours, and another may concentrate on tours of Asia. Major players in this category include American Express, Cendant, Expedia, Orbitz, Travelocity, Carlson Wagonlit Travel, WorldTravel, Maritz Inc., and World Travel Specialists Group.

Cruise Lines
Cruise lines are included in this profile because while other modes of transportation, like airlines, are primarily about getting passengers from place to place, on a cruise ship the trip is the focus. Indeed, cruise ships are essentially floating resorts, with all the activities and amenities of resorts of every kind. Major players here include Carnival, Royal Caribbean, Norwegian Cruise Lines, Royal Olympic, and Star Cruises.

The outlook in the hospitality and tourism industry varies depending on the position and sector you're interested in working in:

  • Opportunities in hospitality, which have been fewer than usual during the recent economic downturn, are projected to grow at a slightly greater rate than jobs overall between 2000 and 2010.
  • For travel agents, the outlook isn't nearly so bright, due to the growing popularity of travel websites for planning trips and making reservations among both individual and corporate travelers.
Of course, the hospitality and tourism industry is especially sensitive to the overall economy; when things are tough in the economy, businesspeople tend to travel less, and would-be vacationers tend to scale back their travel plans, if not cancel them altogether. Events of global significance, such as terrorist attacks and disease epidemics, can also hurt the travel business. Be aware that, occasionally, the industry will go into a downturn, and that when that happens nobody's job is completely safe.

A final note: Adventure travel is one particularly hot spot in the travel business these days. Competition is tough for positions in this sector, but jobs here should continue to grow in coming years.

Join the Industry, See the World
In an industry built around travel, it makes perfect sense: Many in hospitality and tourism get great discounts on everything from hotel and airline rates to event tickets. Imagine a trip to an exotic location every year. Imagine staying in four-star hotels. Imagine having a suntan every winter. Your friends are going to be so jealous.

Do What You Love
You want to work outdoors, way out in the desert, deep in the woods, or overlooking the ocean? There's a place in hospitality and tourism for you. You want to surf, or mountain bike, or work to preserve the environment? There's a place in hospitality and tourism for you. You want to sing, or dance, or act? Yep-there's a place in hospitality and tourism for you. Park rangers, lodging managers, golf pros, action-sports tour guides, and performing artists at theme parks and resorts-they all get to do what they love. And lots of their colleagues in more-corporate fields-such as sales reps, accountants, and travel agents-get just as much of a charge out of working in hospitality and tourism-out of working in a beautiful location or helping others go on the vacation of their dreams.

The Paycheck
This is not an industry in which you're going to get rich. Of course, if you make it to the top of a big corporation in hospitality and tourism, you'll most likely be very comfortable. But in the years before that, while your friends who are bankers and doctors and lawyers and such are busy building their investment portfolios, you'll still be making a relative pittance. In other words: You're going to be so jealous of your friends.

The Stress
Customer service is the foundation of success in hospitality and tourism. And as anyone who's ever worked in customer service can tell you, that means one thing: stress. In most jobs in this industry, you'll almost always be facing deadlines. Say you're a housekeeping manager. Will all the rooms vacated this morning be ready for new guests at the 3 p.m. check-in time? They'd better be. Or say you're a travel agent. Are there any luxury-hotel rooms available this weekend? If there aren't, you won't be receiving any commission. Or you're a tour guide, and one of your guests hasn't returned from the shopping excursion yet-even though the bus is supposed to leave in 3 minutes. Taking care of travelers with varying needs and varying levels of bossiness (not to mention varying levels of intelligence) can get the goat of the best of us.

You'll find the usual array of corporate positions within the hospitality and tourism industry: marketing executives, salespeople, accountants, HR specialists, and the like. But the majority of the career opportunities in the industry are in more customer service-oriented areas. Following are descriptions of some of those careers:

Restaurant Manager
Manages the daily operations of a restaurant. May require an associate's degree in a related area or its equivalent and at least 4 years of experience in the field or in a related area. Familiar with a variety of the field's concepts, practices, and procedures. Relies on experience and judgment to plan and accomplish goals. Performs a variety of complicated tasks. May lead and direct the work of others. Typically reports to a senior manager. A wide degree of creativity and latitude is expected. Salary range: $35,000 to $60,000.

Executive Chef
An alternate title for this position might be "boss of the kitchen." People in this position oversee everything from purchasing to menu planning to the details of food preparation. Before you reach this level, you'll have to grind through years in lower-level food-prep jobs. If you aspire to this level, you'd be well-advised to attend a culinary institute. Salary range: $55,000 to $100,000.

This is the guy or gal at the hotel who focuses solely and relentlessly on making his or her employer's guests happy. You'll be arranging for guests' dry cleaning, theater ticket purchases, restaurant reservations, and more. To do this job, you've got to love serving guests, be a creative problem-solver, and know everything there is to know about your location. For example, you'll need to know whether and where there are Ethiopian restaurants in your location-and, maybe, where one might find a "technically illegal" game of poker, or how one might arrange to meet with a member of the opposite sex for an hour or two. Typical salary: $17,000 to $30,000, but a good concierge in an upscale hotel can earn a lot more via tips.

Lodging Manager
People in these positions manage the day-to-day operations of a hotel or motel. This means doing everything from managing the housekeeping, room-service, and reservations staff to managing the supply purchasing and inventory control. In addition, the lodging manager is ultimately accountable for anything that goes wrong at the hotel or motel, meaning that people in this position can basically be on call 24/7 for emergencies from computer breakdowns to on-site accidents. Salary range: $20,000 to $40,000.

Meeting/Event Planner
People in these positions plan meetings or special events (e.g., company parties or industry conventions) for businesses and other organizations. These folks do everything from reserving hotel space for meeting or event participants to arranging for catering to negotiating rates and contracts with those hotels and caterers and other vendors. Salary range: $40,000 to $70,000.

Travel Agent
The travel agent helps customers understand their travel, lodging, and activity options,in addition to making reservations or purchasing tickets for everything from airline flights to car rentals. Agents have to have an understanding of one or more of the reservations technologies used in the industry: Sabre, Amadeus, Worldspan, or Galileo. They must also be good at selling and customer relations. More and more agents are getting a formal education in their field and getting certified by the Institute of Certified Travel Agents. Salary range: $25,000 to $50,000.

Corporate Travel Manager
Folks in this job typically work for Fortune 1000 companies, in what's basically an in-house travel-agent position. In addition to handling reservations and ticket-purchasing responsibilities, some corporate travel managers are responsible for creating and maintaining corporate travel policies (which codify things like the rates that various levels of employees can pay for airline tickets and hotels, or which car rental companies employees can use). Salary range: $45,000 to $75,000.

Some hospitality and tourism organizations offer internships or student co-op opportunities; these are generally the fastest entrée to full-time work in the industry. You can also go to school to learn about specific areas of the industry; Cornell, for instance, offers a renowned hospitality program, and lots of vocational schools offer programs for aspiring travel agents. Here's what most employers look for when they hire at all levels:

  • With the ever-increasing focus on keeping customers happy, you need to enjoy serving people and be perpetually alert as to how to serve them better.
  • Can you work well in teams? There is a lot of teamwork in many of these jobs.
  • How do you handle stress? Stress seems to be an ever-present factor in jobs in this industry, whether you're a chef, a travel agent, or a tour guide.
  • Love your employer, love the experience it offers customers, love the prestige and cachet of your particular niche in the industry. The pay is low, the hours are long, and advancement is never easy. If you'd buy what your company is selling, you're a much stronger potential hire.