Hotels have a long and interesting history. As The Economist explores the the history of hotels, (”Be My Guest”, The Economist, December 21st, 2013) there have been three epochs of hotels. 1860 to 1960 was the time of the grand hotel — hotels such as Le Grand Hôtel were opened by the Empress Eugéne, sported 800 rooms, and were like a palace. The king of Spain followed suit, New York saw grand hotels opening even during the Great Depression, and a vast hotel opened in Moscow as a sign of Soviet greatness at the start of the Cold War.
The next era began in the 1960’s and was marked by the real estate being owned by separate owners while still being part of a larger hotel chain. The individual hotel owners agree to follow guide lines set by the larger companies. The advantage is that if you see a hotel in one city, you can expect to get the same quality when you visit that hotel in another city.
Next time we’ll take a look at the final era of hotels and how this ties in with Urbana Varro, a private equity firm specializing in the hotel industry.