1. Forces Affecting Growth and Change in the Hospitality Industry
Chapter Two

2. The Purpose of this Chapter
The hospitality industry, as it exists today and will probably be tomorrow, is the result of the interaction of basic market forces. We will look at the most basic of these forces below.
The first is demand for hospitality services from consumers.
The second is the supply of the products and services created by hospitality service companies.

3. Demand in the Hospitality Industry
Demand is the most basic force driving the hospitality industry’s development. This demand translates into customers, so to understand demand we must first understand our...
Customers!

4. Demand translates into customers
We need to look at our customers from three different perspectives:
We need to understand what the population’s changing age patterns are
We will explore how they affect the demand for hospitality products
We will look at other patterns of change, such as:
the increase in working women
the transformation of family structure
the changes in income and spending patterns.

5. Demographics vs. Psychographics
Demographics The study of objectively measurable factors in the population, such as age, income, gender, sexual preference, marital status, etc.
Psychographics Different patterns of activities, interests, and opinions – the forming of “groups”

6. Structural Changes That Will Shape Demand for Hospitality Services in the Twenty-First Century
Increasingly diverse population
More women in the workforce
Changing family composition
Changing income distribution

7. The Changing Age Composition of our Population
Baby Boomers
Born 1946–1964
Constituted nearly one-third of the population in 2000
Generation Xers
Born 1965–1975
Have reputation as worldly wise, independent, pragmatic, computer savvy, ad-intelligent consumers
Echo Boomers
Born 1976–1994
Children of baby boomers
Will nearly overtake baby boomers in number by 2010

8. Changing Family Composition
Households with children under 18
Largest segment today—37 million  
Households without children under 18
Will increase 29% to 37 million by 2010
Spend more than any other household

9. Changing Family Composition
Single-person households
Growing because more people are delaying marriage until completing their education
Good potential customers for the hospitality industry

10. Changing Family Composition
Single parents
Have relatively lower incomes
Eat out less often than the average American
Less likely to be hotel customers or to travel

11. Good Locations for Hospitality Establishments
High-traffic areas
Locations near major destinations
Locations associated with scenic beauty

12. Hospitality Occupations Expected to Grow More Quickly Than the Total Workforce
Growth of U.S. workforce: 14%
Chefs and cooks: 14%
Servers: 15%
Foodservice and lodging managers: 16%
Flight attendants: 30%
Travel agents: 18%