Hotel industry barriers to entry

The influence of the internet has been profound especially in the hotel industry. They include not only customer interaction on the internet but also internet applications in a variety of areas such as supply chain, financial and Human Resources to increase the value chain.

Equally committed to the business and leisure traveler, Best Western recently embarked on a five-year mission to lead the hotel industry in customer care.

When potential customers can learn about a hotel on line, the internet reduces the differences among competitors. Variable and fixed costs can be different in areas that are more expensive to live and work making it more difficult for a hotel in Niagara on the Lake to reduce their prices to the level of one in nearby St.

They must not join any sell-off sites or organizations to offer rooms at discount prices for that would undermine their luxury status. Porter points out similar examples with Real Estate and with furniture sales. A presence on the internet reduces upstart marketing costs somewhat, and gives the new competitor access to potential suppliers and resources.

hospitality industry porter 5 forces

Vintage Inns Vintage Inns started in Niagara-on-the-Lake approximately 25 years ago when a recent immigrant bought many of the established old hotels in town. It is this type of challenge that Chinese automobile brands pass when trying to enter international markets. Especially for the business traveler, for whom rewards are personally redeemable, staying with the chain provides rewards that the individual can enjoy only if they return whether on more business that costs him personally nothing or for a discounted or free personal stay.

Some have chosen to differentiate by location and by luxurious experience.

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Barriers to entry: Factors preventing startup entry into a market