Pearson New International Edition International pcl tp indd 1

Limited-Service Hotels
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Increased guest expectations (budget and mid-price properties). The first limited-
service hotels were readily accepted because of their good locations and mod-
erate room rates. As the segment became more mature, some brand managers
upgraded their organization’s services and amenities (sometimes substantially).
Today’s guests in limited-service hotels have high expectations, even in the
budget segment. Some hotels struggle to meet increasing guest expectations
and brand requirements while maintaining profitable operations. In the future,
guests’ wants and expectations will likely increase even more; this will result in
even greater managerial challenges and pressures on profit levels.
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Fewer profitable locations. The best real estate location for a limited-service hotel
is near an interstate highway entrance or exit, a highly developed shopping or
office complex, a popular recreational area, a high-density population center, or
a significant local tourist attraction or other demand generator. Each hotel’s
competitors look for the same locations, so the demand for choice building sites
often exceeds availability. The result is often inflated real estate costs and asso-
ciated property taxes and, consequently, excessive building and operating costs.