Abstract
The appearance of increasing concentration in today's lodging industry is belied
by the industry's underlying structure and trends in franchise relationships, technol
ogy, and, potentially, the channels of distribution. The stability of franchise organi
zations has been undermined by increasing conversion franchising and the sale of
franchise companies. Ownership in lodging is fragmented, and the industry is a
cyclical one, subject to innovation-led change as well. The technology of reservation
systems will soon make interconnection with a worldwide reservation network
possible for independents and small chains. This in turn calls into question the
relative value of high-cost franchise systems, especially in contrast to lower-cost
referral systems. Accordingly, forecasts of dominance by a few chains are called into
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