The international hotel development in the 1960s : a cooperation perspective

Abstract

The objectives of multinational firms expanding overseas in search of new markets and new resources, or risks spreading and overcoming competition are widely cited. On the other hand, without the host governments’ incentives given, such as tax exemptions and economic liberalisation, expansions into foreign countries would not be an easy or possible move. Host governments normally seek cooperation from multinational firms to invest locally in order to improve the countries’ infrastructure, employment levels, knowledge exchange and technological advancement. This paper aims to examine the international hotel industry development to illuminate the governments’ and multinational firms’ interdependent relationships. It explores the international hotel expansions of the Intercontinental Hotels Corporation and the Hilton Hotel International in the 1960s. This decade is critical to international hotel development attributing to two major environmental changes. First, the economies of several countries were stabilising after the end of World War II. Secondly, the technological improvement in the airline industry stimulated higher demand for air travel. Multinational hotel firms not only helped to generate economic growth for host countries, they also stimulated competition within the hotel industry, and arguably, created a more effective and rapid growth vehicle – management contract – particularly for the upscale hotel sector.