Market feasibility approach to hotel location

A successful hotelman once said that there are only three rules for profitable hotel operation: location, location, location. Although we may regard this as a somewhat over simplified prescription for success in the hotel business, it draws our attention to the prirnary importance of location in a business with a high investment in fixed capital, which cannot transport its product to the market. An hotel is an outstanding example of location in relation to the market; once an hotel is built, it cannot change its location or follow its customers, as the principal product it sells—hotel accommodation—has to be bought and consumed at the place of production.