4. Trends in Tourism and Hospitality - Economical Aspect
4.2 Accommodation Sector
Graph 4.6: Hotel Room Demand Driven by Economy
Source: Smith Travel Research (STR) and U.S. Department of Commerce
4.2.2 Implications for types of accommodation
In the late 2008, the global economy experienced an economic downturn, its implications for the accommodation industry are far reaching. During the economic recession, it caused both business travelers and pleasure travelers to reduce their spending in travels. They become more cost-conscious travelers, and they looked for cost saving alternatives and find more economical ways to travel including traveled by LCC (see Graph 4.3 and Graph 4.4) and stayed at budget hotels. After the recession, the consumers are looking for more value in their spending.
What kind of value is the consumers looking for?
As the global economy and tourism recovery gains momentum, many travelers continue to show a recession-era preference for select-service hotels that offer a compelling value proposition by providing many full-service amenities at a lower price point.
(Source: Global hospitality insights Top thoughts for 2014, available at
The need for value from consumers are further elaborated by Paul Logan, senior VP of development - Asia, Middle East and Africa for InterContinental Hotels Group, select-service hotel is appealing to a much more independent traveler that doesn’t want to pay for frills, the fixtures and facilities of a full-service hotel.(Source: “Budget hotel sector finds momentum in
Hotel Demand Driven by Economy
8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 -8.0
R-squared = 0.58
88 90 92 94 96 98 00 02 04 06 08 10 12
Hotel Demand Growth
Real GDP Growth
changing preferences of both business and leisure travelers, it is likely that the development of select-service hotels could become a global trend. Is Hong Kong hotel industry preparing itself for this trend? According to Mr. Chao, partner of Deloitte China, generally speaking, the Chinese tourist will fully embrace the destination, taking in shows, sights and shopping while not spending much time in their rooms. As such, they are not discriminating in terms of bed configuration or the availability of certain amenities and they place importance on good value for money (Source: Deloitte: Hospitality 2015 game changers or spectators?).
4.2.3 What are select-service hotels?
According to the Manual of Introduction of Hospitality on Hotels and their classifications, there are nine types of classification factor:
Function Design Market Segment
Location Rating Staff to room ratio
Price Size Distinctiveness of properties
Based on the above classification factors, Select-service hotels are classified by the price factor. In general, hotels under this classification (price) factor can actually further break down into three main classes, and Select-service is one of the three classes:
1. Limited-Service 2. Select-Service 3. Full-Service
The details of how the above hotels are classed can appear a little fuzzy. Here we try to make things clearer by introducing definitions of these three different classes of hotel:
A limited-service hotel was originally defined as a hotel without restaurant or banquet facilities.
The service and amenities offered to guest of limited-service hotels are typically simple. It should be noted that these services and amenities have expanded over the past decade, and in today’s market, a limited-service hotel’s range of amenities might include a business centre, a fitness room, a guest laundry facility, a market pantry, and indoor and/or outdoor pool, and small meeting rooms. Limited-service hotels do not offer catering services of multiple restaurants. Room rates are usually on the lower end of the scale as well because demand for limited-service hotels generally comes from price-sensitive commercial and leisure travelers.
A select-service hotel is a hybrid hotel between a limited-service and full-service hotel. It offers the fundamental of limited-service hotels together with a selection of the services and amenities characteristics of full-service hotels. Generally, this means these hotels do not feature multiple restaurants, expansive catering services, or an abundance of meeting room usually find at full-service hotels.
In room amenities, however, can approach or meet the levels found at full-service hotels while keeping prices low. In fact, commercial demand has grown among select-service hotels during and after the global economic downturn in 2008, as budgets for business travel tighten. On the whole, it’s fair to say that select-service hotels have more in common with limited-service hotels, but specific offerings of select-service hotels vary.
The most distinguishing feature of a full-service hotel is the abundant provision of food and beverage services suitable for both guests and groups. In addition, selective amenities such as spas, elaborate banquet rooms, doormen, valet parking, extended room services, concierge services, and high-end restaurant and boutiques distinguish many full-service hotels. In general, full-service hotel guests seek the extra amenities and service levels found only at these class of hotels.
*Source: US Hotel Appraisals – An Overview of Hotel Asset Classes available at
http://www.ushotelappraisals.com/services/select-service-hotels/ and Vanguard Realty Advisors: Hotel – Limited-Service, Select-Service & Full-Service – Commercial Appraisal available at
Since mainland tourists’ market contributes the most tourists to Hong Kong, the demands for select-service hotels could become a local trend. The following types of hotels are examples of limited-service, select-service and full-service hotels operated in Hong Kong. On the whole, it’s fair to say that each of the three classes of hotel have specific offerings which may vary differently from one hotel to another even within the same class.