ABSTRACT
Chapter 2 presents those four activities in the hotel value chain which make a hotel experience possible. It is argued that three distinct episodes of vertical disintegration have caused the value chain of the corporate hotel industry to become fragmented overtime. The chapter explains each episode and its impact on industry evolution.
The first episode was the strategic decision made by hotel chains between 1992–2005 to divest themselves of hotel property assets which resulted in them becoming asset light and hotels developing as a property asset class. The second episode was the entry of White Label Management companies as alternative providers of hotel management services between 1998 and 2013. The third was the growth of Online Tour Operators (OTAs) and meta-search engines as hotel distributors between 2002 and 2012. It is argued that all episodes, whilst linked, have enabled firms to enter the industry with specialisms in one vertical function. Each occurrence consists of the creation of an entirely different market, in a different part of the value chain.
The concluding part of the chapter introduces a revised value chain, which acts as a basis for the proceeding chapters.
