Multinational hotel development in developing countries: an exploratory analysis of critical policy issues

Abstract

AbstractMultinational hotel companies, often integrated with tour operators, travel agencies and other businesses in tourist‐generating or tourist‐receiving countries, play a key role in the development and continuity of an international tourism industry in developing countries. In order to take advantage of benefits and minimise the unwanted adverse effects from multinational hotel involvement, developing countries need the planning, implementation and evaluation of carefully designed policies linked to their particular objectives. This paper reviews the potential benefits and costs of multinational hotel companies and brings together previously scattered critical policy issues in relation to them, while suggesting possible options for developing countries to follow. Seven critical policy areas are identified: establishment of the need for foreign investment; deciding on forms of involvement; deciding on the scale of hotel development; supporting sectoral linkages; supporting indigenous employment/training; monitoring business practices; and determining foreign investment incentives and regulations. It is argued that policies should be worked out in these areas and co‐ordinated in order to achieve a balance between the benefits and costs of multinational hotel involvement in developing countries. Copyright © 2001 John Wiley & Sons, Ltd.