While driving out of Boston Logan Airport to begin my venture home for Fall Break, three hotels made a triangle around I-90: Embassy Suites, Hilton, and Hyatt. With the same multi-story, brown brick, uniform box structure, the buildings' "identity signs" served as their only differentiation. And while the architectural and location choices were identical enough, inside, visitors enjoy all the same complimentary services (breakfast, housekeeping, Wi-Fi, parking) and amenities (gym, pool, mini-fridge, toiletries). The convergence of the greater hospitality industry is explained by, ironically, Hotelling's Spatial Location Theory.
Each of the three hotels is "midscale." If traveler accommodation preferences were sorted linearly, with camping at 0 and the Four Seasons at 100, Hotelling's Spatial Location Theory predicts market share maximization at this dominating "midscale" tier. The middle-to-high-end travelers sacrificing an infinity pool for a better price point and the middle-to-low-end travelers paying a little extra for a standard pool, for example. And while these hotels might not have a fine dining room, the list of once "luxury" amenities is growing and standardizing (listed above), as brands are forced to match those of their competitors to maintain such market share. The hotel trifecta's location choice (equilateral triangle around Logan) further supports Hotelling's Theory, with all three looking for an even split of traveler demand as travelers flock to the nearest hotel after a long travel day.
Thus, the hospitality industry is unique in that it upholds Hotelling's Spatial Location Theory in the homogenization of both its location and product offerings.
No comments:
Post a Comment