, 1993, pp. 1772-1773). Further, many existing units are old, and in so-so or worse condition. Many are in locations that are now declining. There are also wide variations among travelers in terms of what sort of facilities and amenities they really want, and how much they are willing to pay for them. Thus, the market conditions will likely be good for the efficient and alert lodging operator; however, these same conditions could prove to be disastrous for others. These conditions apply both nationally and in the Los Angeles area. For the lodging industry as a whole, a major problem to be solved is the stimulation of the use of unused capacity. This factor was a major consideration in the decision by the hotel industry to adopt the yield management concept (Salomon, 1990, pp. 85, 87-88). While this problem is more serious for the marginal operator, it is an issue of concern to all operators. The development of a marketing strategy to stimulate the use of unused capacity in the lodging industry was crucial, and, thus far, yield management has been the answer (Jones and Hamilton, 1992, pp. 89-95).
Typically, the hotel industry does no better than track GNP (gross national product) growth (Clark and Gerstein, 1987, p. 1781). Since 1977, however, the industry as a whole has not performed even this well (Sharav, 1993, pp. 1772-1773). In the early-1990s, the hotel industry is plagued by overcapacity and a soft economy, both nationally and in the Los Angeles area.
Financial and human resources are the critical resource areas for the hotel industry both nationally and in the Los Angeles area. In spite of the softness of demand, capital remains available for new facility construction in the hotel industry, because new properties tend to be more profitable than older properties (Sharav, 1993, pp. 1772-1773).
In the customer service area of hotel industry operations, customers are clamoring for ...