Travel Reference
In-Depth Information
suggested that the German-based giant TUI urged Greek resorts to drop their
prices by up to 35% for the 2012 summer season (Smith & Connolly, 2012).
Whilst earlier periods of postwar tourism expansion were marked by
high levels of FDI, since the mid-1970s transnational hotel chains increas-
ingly substituted non-equity forms of ownership, such as management con-
tracts and franchise agreements, for direct ownership of properties (Wood,
1979: 282). In this way, hotel chains sell or rent their firm-specific proprie-
tary expertise and brand name in return for guaranteed levels and quality of
accommodation capacity at minimum levels of risk in order to minimise the
risk to investors and to guarantee quality and maintain brand reputation to
an increasingly discerning clientele (see Clancy, 1998: 132-133). Castells
(2000: 15) has suggested that the new globalised economy characterised by
networks rather than hierarchies will lead to a greater de-centralisation and
coordination of decision-making. In a similar vein, Poon (1993) has argued
that information technologies could enhance the creativity and innovative-
ness of SMEs.
Notwithstanding the expansion of internet-based travel companies over
the past decade, as well as the emergence of internet travel review companies
with considerable influence over travel purchasing decisions, such as Trip-
Advisor, arguably the scope and scale of transnational capital involvement in
tourism and hospitality industries worldwide has dramatically increased, not
least with the entrance of private equity firms and real estate investment trusts
into these sectors (see ILO, 2010: 29-32). Furthermore, notwithstanding the
growth of 'South-South' FDI in tourism as well as the emergence of non-
European/North American-based transnational firms based in Latin America
( Grupo Posadas in Mexico), the Middle East (Kingdom Hotel Investments),
Africa (Southern Sun), South-East Asia (New World/Renaissance Hotels,
Shangri-La) and of course China (Jin Jiang International), US-based TTCs
remain dominant in key sub-sectors of the global tourism industries as the
global ranking of hotel groups (by number of rooms) continues to demonstrate
(ILO, 2010: 9-10). Nevertheless, it is important to note, that whilst hotels may
be operated by well-known transnational chains, the assets themselves are
often owned by wealthy domestic firms or individuals under license or through
various contractual agreements (Gladstone, 2005: 40). In addition, one of the
most significant changes in the past two years has been the rapid rise of Chinese
hotel groups up the global rankings, four of which have entered the top 25
hotels by number of rooms ( Hotels , 2011). Although Chinese capital in general
continues to make significant inroads into the highest echelons of global corpo-
rate activity, particularly in mining and other heavy industries, it is particularly
significant that these brands are still predominantly focused on the Chinese
domestic market. In terms of their global reach, therefore, the US hotel chains,
together with the Inter-Continental Hotels Group (UK) and Accor SA (France),
still predominate although this is likely to change as Chinese and other tourist
markets in the emerging economies begin to spread their tentacles overseas.
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