Question

Why does the hotel industry have so many partnerships among competitors? Is this true for other industries? Which ones?

Answer 1

When the Hotels have partnership alliances with each other, there are lot of benefits that these players gain in the process. More complimentary services could be offered to the customers thereby leading to the enhancement of the Customer Satisfaction, which forms one of the most significant Strategic goals for the Hotel Industry as such. Moreover, when the cost of the resources is shared among the Partners, there is an overall reduction in the cost of running the Hotels while on the other side, a larger market share in the Industry, could also be gained. On the part of the Customers also, the when the visibility of the Hotels in alliance increases, so does the footfalls of the customers owing to better accessibility of the places.

It is true for many industries such as Automobiles, Telecommunications, Financial Institutions and also in Health industries. For example, in case of the Healthcare sector, it has rather become an area of consumer health market, where the focus is to grab as much as of the patient’s market share as possible. Mergers and acquisitions help the Hospitals and Providers to achieve this motto. As a result, they can possibly command more prices in terms of fees by the Healthcare insurance companies, to be paid to them for the kind of medical care and facilities offered by such Hospitals and Providers to the patients.