Category: History

I Dream of Doughnuts: One Family’s Sweet Saga of the American Dream

February 1st, 2015 in Cooking, History, Restaurants, Winter 2015 0 comments

Twin Donuts, located at the intersection of Beacon & Cambridge Street in Allston Village, Boston

Twin Donuts, located at the intersection of Beacon & Cambridge Street in Allston Village, Boston

By: Rachel DeSimone

At the historic intersection of Cambridge Street and Brighton Avenue in Allston, Mass., you might find yourself wondering if you’ve been blasted back in time, say, to the ’50s. Before you stands a small retro-diner style building with a shiny silver overhang and an enormous sign towering over the roof that reads, “Twin Donuts.” Written in dated red script letters, “Twin” is illuminated, while the “Donuts’” lights are out. Even more old-fashioned are the visible white slats behind the sign, visibly holding it up. This childhood diner throwback sits directly on the point of the sidewalk where the two streets cross and has maintained that spot for almost 60 years now.

When you walk inside Twin Donuts, the smell of toasting bagels and coffee waft around you. The walls are mostly white. Maroon tables fill the interior, along the sides and down the middle, set with wooden chairs that have maroon seat cushions, which all rest on maroon floor tile. Once you weave your way past all of the tables to the back right, arriving at the counter, fresh baked doughnuts are directly in your line of sight. Above the counter is a white menu board made up of red and blue letters that are clipped on and have begun drooping to either side. There are large, almost floor to ceiling windows lining both sides of the shop, some consisting of thick, clear glass tiles. Newspapers are strewn around most tables, and some stray empty plates linger showing smears of ketchup and potato remains. A group of college students sits at the first big table chattering about what they are going to wear to a party. Next to them, at the “round table,” is a pair of older gentlemen conversing about peanut butter and jelly sandwiches, cream of wheat and pickles. Then there are some single customers sitting quietly on the outskirts with the morning paper.

In a town where hordes of college students come and go each year, a city that runs on constant change also finds vitality in its antiquity. The building itself that Twin Donuts inhabits has been there since the 1800s, formerly occupied by the Odd Fellows Hall, a local movie theater. This iconic doughnut shop has been in its same spot since 1955, seeing its way through four or five different owners. The Taing family, who took over in 2001, currently owns the shop. Catherine and her two brothers, Woo and Wayne, manage Twin on a daily basis, in addition to Café Mirror and the Brighton Café, both of which the Taing family also owns.

Catherine’s Father, Leang Sim Taing, and Mother, Chiang Sou Pang, purchased the business from its previous owner, Henry La, who now owns The Depot Coffee Shop in Newton, Mass. Both Mr. and Mrs. Taing were born in Cambodia, though are ethnically Chinese. They survived the Khmer Rouge, escaped as refugees to Thailand, then the Philippines and eventually to the U.S. They both attended school in Cambodia, gaining about the equivalent to an eighth grade/early high school education. Mr. Taing went to both Cambodian and Chinese school, while Mrs. Taing only attended Chinese School.

With limited education and language barriers, Mr. and Mrs. Taing began work at various Massachusetts companies on the assembly line, making an hourly wage. Soon Mr. Taing realized his dream was to become a business owner, not having to work for anyone else but himself. “I always say it was his idealistic dream because in actuality it’s a lot harder than working for someone else,” says Catherine, “I feel he needed a goal to work towards, something more that just putting in 40-hours at the company.” Mr. Taing never worked for anyone outside of his family until he moved to the U.S.; he grew up in a family that owned their own business raising and selling pigs and meat, amongst other things.

Twenty years after Mr. Taing expressed his dream, it became a reality. Mrs. Taing was hesitant at first, but eventually gave in. “Mom is the practical one who understood the hard work of owning your own business and understood that my Dad’s dream was just that, a dream,” says Catherine. At the time Mr. and Mrs. Taing’s three children were very young and Mrs. Taing knew that neither of them were ready to put in the long hours. When it did happen in 2001, the purchase of Twin Donuts was a joint decision and effort, “neither could have done it on their own,” says Catherine. At that point their youngest child was 13-years-old.

Twin Donuts Stack

 
 

Twin Donuts Inside

 

Unfortunately, Mr. Taing only got to live his dream for one year, as he passed away in April of 2002. Rather than closing the shop’s doors, the Taings kept it running in honor of their father/husband. “We continued his dream, it’s a nice sentiment,” says Catherine. As other businesses have come and gone throughout the years in the Allston-Brighton neighborhood, business has continued to do well for Twin Donuts, even through the 2008 recession. They have maintained very reasonable prices, a doughnut only costing 89 cents. Catherine, on behalf of her and her family, expressed great gratitude for this fortunate reality.

Twin sees a variety of customers, along with their steady regulars, some of whom have been coming since it opened in ’55. Arguably the most important part of the whole establishment, the “round table,” inhabited by the regulars, has been around for about 25 to 30 years. The table is held up by a large aluminum pole that is scratched and covered in duct tape, which stands, hard to miss, in the middle of the restaurant. When the Taing family took over in 2001 they did some minor renovations, adding more sit-down tables to cater to the full-service breakfast that they pioneered, but left the “round table” untouched.

Today three members of the “round table” remain from the about eight that originated it. Gail is one of the members, a long-time Allston resident who used to work in auditing. Dressed in loose jeans, a navy windbreaker, and white sneakers with a long black purse draped over her shoulder, she has short wavy white hair and wears a medium shade of red lipstick. Gail comes to Twin three to four times a week now to enjoy her small coffee and Boston cream doughnut that she has always ordered. “I come to talk to people,” says Gail who is greeted with a warm long-time familiarity by the other two older gentlemen at the table, both of whom are still wearing their coats and have wrapped up their pickle conversation. A fourth friend, a shorter gentleman wearing a Bruins jacket, who apparently doesn’t come around as often stops by and the three “round table” members joke with him to “stay out of trouble.”

Before the “round table” crew arrives, Twin Donuts opens in the wee hours of the morning, at 4 am, to host a crowd of bartenders just getting off work and truck drivers starting their day. Catherine arrives bright and early to start the coffee, preparing some customer’s cups just how they like it before they even reach the counter. Throughout the day you can find Catherine serving food and drinks to people at their tables, manning the counter, re-organizing the Sriracha and ketchup bottles, maintaining the valuable relationships with the regulars, making new ones and making sure that the shop runs smoothly.

The daily morning rush has wiped out many favorite flavors.

The daily morning rush has wiped out many favorite flavors.

Mrs. Taing currently deals with most of the finances and paperwork. Once she retires, the family is not sure if they will continue the business, according to Catherine, who is an English major from Tufts. She never imagined that she would be running a doughnut business. “My pipedream is to write a book,” once her three children have matured that is. The family also stays busy running the Brighton Café, which they acquired in 2003 and Café Mirror, which they acquired in 2004.

Why doughnuts though? “It’s an Asian thing,” says Catherine, “especially in California,” where she has cousins who also own doughnut shops. The Taing family is part of a larger Cambodian-American owned doughnut shop movement that really started around 1975 with Ted Ngoy, according to Audrey Magazine. The man who has been behind Twin Donut’s doughnuts for 25 to 30 years has carried over from the previous owners. In his tiny kitchen he provides all of the doughnuts for Twin, Café Mirror and the Brighton Café.

In an area that once held Allston-Brighton’s agricultural community and cattle trade, remains one essential piece of history that has endured, continuing to carry on Union Square’s historic legacy, thanks today to the Taing family. Twin Donuts still remains the culmination of Mr. Taing’s long-awaited dream. Sometimes the American Dream can be as sweet as doughnuts. “The shop is our livelihood, we may not be crazy passionate about doughnuts, but I think that’s our subdued personalities, we have become a part of the Brighton community, a force amongst the Dunkins,” says Catherine.


Rachel DeSimone, a native New Yorker, is passionate about unique food and it fuels her writing. She is currently Editor-in-Chief of Spoon University, an online food resource for college students made up of over 1,800 contributors at more than 50 campuses. Rachel is a senior at Boston University in the School of Hospitality Administration and minoring in journalism. After graduation, she hopes to participate in the BU Gastronomy Masters program.

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Building A Spirit of Inclusion: Pan Am and The Cultural Revolution

October 1st, 2014 in Airports, Business Practices, Fall 2014, History 1 comment

SheilaUniform

By Mirembe B. Birigwa

The legendary Pan American World Airways remains a bastion of nostalgia and cultural significance and serves as a case study in how airlines adapted their hiring practices to reflect the social movements of the 1960’s and 70’s. To maintain a competitive advantage, top companies thriving today are tasked with conveying a message of inclusion that matches the expectations of the traveler.  The Civil Rights and Women’s Liberation movements motivated Pan Am to update their messaging to accommodate a broader audience and translate that shift to the marketplace. One of the solutions included reinterpreting strict Eurocentric beauty codes to suit a more diverse workforce. Pan Am also released advertising campaigns that highlighted African American flight attendants. My mother and her colleagues were a part of the drive to change Pan Am’s perception of exclusivity.

The Civil Rights Act of 1964 President Lyndon Johnson signed the historic legislation to end racial bias in education, voting practices, places of public accommodation and employment. The Act ensured legal repercussions for hiring or terminating the employment of an individual on the basis of color, race, religion, or national origin.  Title VII of the act created the Equal Employment Opportunity Commission (EEOC) to implement the law.

Pressure from the Civil Rights Act of 1964, including discrimination lawsuits against airlines, contributed to Pan Am increasing the number of diverse hires. From 1958 to 1969, 0.79 percent of Pan Am stewardesses were African American.  My mother Dr. Sheila Nutt recalls being one of a few African American women sitting in the waiting room at the Pan Am interview held in Philadelphia in 1969. I also spoke with Oren Wythe, pictured in the Pan Am advertisement that ran in all major publications including Time Magazine and Newsweek. Oren grew up in Philadelphia as well. A talented violinist and excellent student, her French language fluency aligned with the iconic-style of the Pan Am brand. In the advertisement beneath a picture of her and a smiling team of Pan Am flight attendants reads, “Pan Am, The Spirit of ’75.” Flying during the seventies entered Oren into the unexpected role of cultural ambassador as the hospitality industry transitioned towards workplace inclusion.

Sheila Nutt was 1964 Miss Philadelphia first runner-up.

Sheila Nutt was 1964 Miss Philadelphia first runner-up.

While researching the integration of the airline industry, I sat down to speak with my mother, who now serves as the Director of Educational Outreach Programs in The Office for Diversity Inclusion and Community Partnership at Harvard Medical School. Following her fifteen-year tenure with Pan Am she wrote her Doctorate dissertation on Flight Attendant Stress and earned an Ed.D from Boston University in 1986.  As a passionate advocate for diversity and inclusion, we spoke about implementing change in turbulent times and the effects of the historical movements on the aviation industry.

[Birigwa:]How did you find out about a career with Pan Am and were you concerned that you may not fit the standards of beauty?

[Nutt:]I entered beauty pageants while attending Girls High School located in Philadelphia in the 60’s. I first won local contests and was featured in Jet Magazine, a nationwide African American lifestyle publication. At that time the Civil Rights Act of 1964 created a policy that mandated diversity in all American institutions. I was first runner up for the title of Miss Philadelphia, a registered contest of the Miss America pageant. A fellow contestant who shared my disenchantment with the idea of becoming a teacher or a nurse as women were expected at that time—she told me the airlines were hiring. I felt a need to explore the world beyond my current reality so I applied to Pan Am with a friend, and together we were invited to interview at a local hotel. I was aware of the strict codes of appearance, however, at that time it was fashionable for women to groom themselves with great detail, never allowing a hair out of place and always keeping light, friendly make-up and of course a smile. The pageant world prepared me for the poise and demeanor necessary to stand out during the interview. I was used to being judged.  I knew right away when I arrived that I was in the right place. All I had to do was get through the various levels of medical and language testing. The interviewer asked me a few questions in Spanish about where I liked to travel. I was able to answer correctly and he seemed to have a look of approval.  Walking out of the interview I noticed I was one of the only African American women in attendance. I felt confidant that I made a good impression and that my life was about to change.

Stewardess’ were subject to high fashion and beauty standards. Far right, Sheila Nutt featured in a local Philadelphia newspaper. (Frontier Airlines Advertisement (Original Standards of Beauty) : 1980-81 Official Guide to Stewardesses and Steward Careers, p6. Copyright 1980 by Alexander C. Morton, Arco Publishing, Inc NY, NY.)

Stewardess’ were subject to high fashion and beauty standards. (Frontier Airlines Advertisement (Original Standards of Beauty) : 1980-81 Official Guide to Stewardesses and Steward Careers, p6. Copyright 1980 by Alexander C. Morton, Arco Publishing, Inc NY, NY.)

 
What challenges did you face as an African American Woman once you were hired?

Arriving in Miami and meeting my soon to be roommates posed a challenge in terms of finding accommodations. I felt the rental companies were not keen on renting to an African American woman and a colleague made a comment that we would have found a place if I was not with them.  We were young women from various regions in the United States and it was 1970, so we had to navigate various racial attitudes and beliefs we held about each other.

Flying also posed unique challenges when certain passengers unaccustomed to seeing African American women on the international flights often did not believe we were American. When passengers were unruly we found ways to express our discontent like withholding pillows or taking a longer time to respond to their call buttons.  We also used our hair to express who we were. At that time an Afro was popular hairstyle for women to show solidarity to the Civil Rights and Women’s Liberation movements. Crossing the Atlantic with an Afro fluffed under a pillbox hat was an act of defiance that somehow made it through the appearance requirements before each flight.  Some airlines banned the style. Traveling to Africa for the first time increased my self-confidence and affirmed my choice of self-expression through my appearance. I was able to make a statement about my personal politics that passengers interpreted as a subtle hint that I expected to be treated politely.

Sheila Nutt featured in a local Philadelphia newspaper.

Sheila Nutt featured in a local Philadelphia newspaper.

How were you affected by the change in corporate policies between 1969 when you first began flying and 1978 when the deregulation of the Airline Industry occurred?

When I first started flying I interpreted my role as beyond a caregiver. In the beginning we were poised to increase the comfort of our passengers flight experience in a way that mirrored the gender ideals of women as rulers of the realm of the domestic. Not only could we comfort an uneasy passenger, deliver a four course meal with dessert and beverage service–we could also execute an evacuation if necessary. We were prepared to change a diaper or two and kept diapers and bottles aboard the plane. It was not uncommon for a tired mother to hand us her infant to care for while she rested. Our role was to anticipate the needs of our travelers as well as rise to any technical challenge that may occur at 35,000 feet.

The Deregulation Act shifted the focus from training, discipline and customer service to strictly transporting persons in large numbers from point A to Point B. Where Pan Am once was the epitome of customer service, a stalwart of manners, diplomacy and luxury, the influx of many smaller airlines capable of moving large numbers of passengers for the least amount of money made it difficult to compete. We tried to for a little while, yet we were union organized and the smaller airlines were not, so they could afford to pay their flight attendants a lot less than we were paid. As well, there was an issue of the high cost of fuel at that time.

Deregulation completely changed the atmosphere of travel. The industry took a different path and the airline industry as a whole lost its luxurious feel. It was an end of an era when stewardesses shifted from glamorous icons to working-women balancing careers and families. Shortly before I started flying in 1970 it was customary to quit once you became pregnant or married. Pan Am had to change with the times. The general atmosphere was more relaxed.

Dr. Sheila Nutt, Ed.D earned her doctorate the Boston University School of Education. She wrote her Doctoral dissertation on flight attendants and occupational stress.

Dr. Sheila Nutt, Ed.D earned her doctorate the Boston University School of Education. She wrote her Doctoral dissertation on flight attendants and occupational stress.

When you were hired, did you believe you would remain a flight attendant for the rest of your working life?

When I was in training school the very first day I sat in the classroom, I knew that Pan Am was the ticket to my future. I was valedictorian of my training school class and I wasn’t sure what I would do with the rest of my life, I wasn’t sure what my position would be, but I knew that Pan Am was the vehicle for me to fulfill my destiny.


mirembe14Mirembe B. Birigwa is a writer who has contributed to Harvard Business Review reports and Huffington Post blogs. She is currently documenting the experiences of African-American Pan American Airways flight attendants. She holds a BA in English from Wesleyan University.

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The Prevalence of Longevity Among Leading Brands

October 1st, 2014 in Business Practices, Fall 2014, History, Marketing 0 comments

By Bradford Hudson, Ph.D.

The age of firms and the implications of organizational longevity have been recurrent topics of interest among business scholars. However, attempts to catalogue or quantify the age or number of older firms are relatively rare. Even fewer scholars have investigated the longevity of brands, as opposed to the longevity of organizations with which the brands are associated. Such research would provide additional evidence to validate the prior work of scholars in contiguous areas, and assist in assessing the importance of brand longevity by determining its prevalence in the marketplace. Longevity is an underlying issue in a variety of topics such as brand equity, loyalty, nostalgia, and lifecycle. It is also an important conceptual element in the emerging topic of brand heritage. This article offers new research regarding the age of leading brands in a variety of industries. The purpose is not to explore the causes or nature of longevity, but rather to determine the extent of the phenomenon.

Organizational and Brand Longevity

Much of the literature on the age of firms is focused on organizational (or company) longevity, rather than brand longevity. Such scholarship typically emerges from the disciplines of strategy, management, or economics. These publications explore the conditions or principles necessary for a company to survive and grow over extended periods, the nature and dynamics of older firms, the limits to longevity and causes of decline as expressed in the metaphor of the life cycle, and techniques for overcoming such constraints and extending the life of mature companies.

An analysis by the Harris Corporation of founding dates of organizations listed among the Fortune 500 in 1994 concluded that 193 companies or 39% were aged 100 years or more. Seven of these companies were founded prior to the year 1800 and the oldest was founded in 1781. A separate study of management styles by Richard Hall was based on data from more than 200 existing companies in Britain that were founded prior to the year 1800. It has been estimated that there are several hundred companies worldwide that are at least a century old.

To the extent that it has been accomplished by the research mentioned above, the task of investigating the age of brands has been completed in circumstances where the organizational name and history are identical to the brand name and history. However, in circumstances where these differ, the longevity of the brand must be researched independently. This may occur if a company has traded under a different name than its legal registration, if a company has changed its name, if partners have entered or exited the firm, if a new brand has been created or acquired, if a company has assembled a portfolio of multiple brands, and so forth. Thus the founding date of a brand may be different from the founding date of the organization associated with the brand.

Marketing literature has devoted significant attention to issues relating to older brands. However, the age of brands is often considered incidental to other types of analysis and the raw data about longevity are usually not provided. Standards of longevity are also often unspecified or vague. There has not been any significant research conducted about the age of brands or brand longevity itself, as opposed to its effects or benefits. Apparently there is no brand equivalent of the Harris Corporation study of organizational founding dates.

The Importance of Longevity

The longevity of brands is embedded in scholarship involving processes that evolve over time, or research in which time or duration constitute input data. For example, the concept of brand equity suggests that after new brands are introduced into the marketplace, they may accrue value over time. The concept of loyalty suggests that consumers may become increasingly loyal to products over time, thereby increasing purchase likelihood and reducing price sensitivity. The concept of nostalgia suggests that consumers may have sentimental reactions to brands and products from prior eras. The concept of product or brand lifecycle suggests that a company or its goods may have a limited lifespan in the marketplace.
It would be useful in considering such scholarship to have a more precise notion of the longevity of older brands. If events or conditions are predicted to occur at certain points in the evolution of a brand, then it is important to understand the magnitude of the scale of measurement. Such research would also assist academics or practitioners who are studying specific companies with the intention of making future-oriented prognoses or decisions about change. The question of whether brands tend to decline after a certain period of time has important strategic implications for the management of brands of varying ages within a portfolio.

The age and longevity of brands is a subject of particular relevance to scholars concerned with brand heritage. Brand heritage is an emerging concept within the marketing discipline, which suggests that the historical status of older companies may be explicitly linked to their brand identity and consumer appeal.  Although longevity may not be a sufficient condition for brand heritage effects to be evident, it is a necessary component. Heritage requires age.

Existing scholarship in the area of brand heritage has not adequately addressed the question of how old a brand must be to qualify for heritage status. In manner similar to the research cited earlier, the standard of longevity is unspecified. There is also uncertainty regarding the prevalence, and thereby the importance, of brand heritage. The question of whether the brand heritage concept could be applied to 5% of brands or 95% of brands has implications for the activities of researchers in the discipline of marketing.

Hudson 1

 

Research and Findings

This study involved historical research to determine the age of leading brands. The list of brands derived from the Best Global Brands report created annually by the consulting firm Interbrand during the period 2001 to 2010, which was also published in BusinessWeek during the period 2001-2009. Each annual ranking included 100 brands, but the overall data set comprises 148 brands that appeared in the rankings at least once. These are listed in Exhibit 1.

After identifying the set of brands, the author conducted historical research to determine the year in which each brand was established, using more than 500 sources. Further information about this can be found in the accompanying textbox entitled “About the Research Sources.”

The founding years of brands sometimes differed from the founding years of the organizations with which they were associated. In several instances, there was significant ambiguity or contradiction among the various sources consulted, requiring interpretation by the author. Further information about this can be found in the accompanying textbox entitled “About the Research Methods.”

After the historical research was completed, the founding year of each brand was subtracted from the year 2010 (the final year in the data set) to determine the age of each brand. The data about age was then analyzed for patterns across industries and age groups. The results appear in Exhibits 2 through 4.

Analysis of the data set reveals significant longevity among the 148 brands, as indicated in Exhibit 2. The founding dates range from 1743 to 2000, and therefore brand age ranges from 267 years to 10 years. The average age is 93 years and the median age is 87 years. Within the entire data set, 64 brands (43%) are aged 100 years or more, and 5 brands (3%) are aged 200 years or more.

An analysis by industry groupings is provided in Exhibit 3. The three oldest industries (based on average age) are food & beverage manufacturing (141 years), pharmaceuticals (119 years), and financial services (117 years). The food & beverage manufacturing industry constitutes only 16% of all brands, but accounts for 30% of brands aged 100 or more. The oldest brand in the entire data set is the Champagne wine producer Moët et Chandon (founded as Moët in 1743).

The three newest industries (based on average age) are computer hardware, software & services (39 years), followed by hospitality, foodservice & travel (62 years), and finally media, entertainment & information (64 years).

Historical Context

Although the overall findings provide new insight into the extended longevity of leading brands, the findings by industry are generally consistent with prior scholarship in economic and business history. For example, the predominance of the food & beverage manufacturing industry among the oldest brands is consistent with analysis by other scholars.

The influential business historian Alfred Chandler explored the founding of companies and the emergence of industries in his books The Visible Hand (1977) and Scale and Scope (1990). According to Chandler, the food industry provides a “good starting point” for understanding the growth in the American economy during the later phases of the Industrial Revolution. The food industry was one of the few sectors in which “the modern industrial enterprise had its beginning.” The other early sectors he cites are tobacco, heavy machinery, and primary metals. The former has since been diminished by legal settlements, while the latter two are not characterized by strong brands (the presence of Caterpillar in the data set notwithstanding).

Chandler cited several food or beverage companies that are represented among the Interbrand rankings including Anheuser Busch (Budweiser), Campbell’s, Coca-Cola, Guinness, Heinz, Nestlé, and Wrigley. Early entrants in this sector were positioned to harness the benefits of first-mover advantage in developing strong brands as the consumer and media economies developed. These companies were pioneers in the modern branding phenomenon.

Some of the newest industries reflect popular narratives about economic development.  The youthfulness of brands in the computer industry can be explained by the young age of the industry itself, the relatively recent development of most aspects of computer technology, and the movement of the industry into consumer markets during the past two decades. The media industry includes several brands aged more than 100 years, but these are overwhelmed by a large number of newer brands with operations based on television or internet channels of communication. Again, it seems clear that new technology explains the low average age of these brands.

However, the youthfulness of hospitality and travel brands cannot be explained by the age of the industry or by the novelty of related technologies. Activity in this sector can be traced to antiquity, and technology has arguably not been a major influence on growth, despite the importance of aircraft and computers. Again, a possible solution to this confusion may be found by applying the principle of scale.

Chandler devotes considerable attention to the size and sophistication of railroad companies, emphasizing their importance as pioneers of the modern corporate form. Otherwise, he completely ignores the hospitality and travel sector, because it remained highly fragmented until the twentieth century. The development of significant scale and scope lagged other industries by at least fifty years, and the emergence of most major hospitality and travel brands did not occur until the 1950s.

One indication of scale is the ability of a company to generate interest from public equity markets. The New York Stock Exchange was founded in 1792, but the first hotel company was not listed on this exchange until 1945 (Sheraton). Similarly, the first food manufacturing company to be included in the Dow Jones Industrial Average debuted in 1894 (American Sugar), but the first restaurant company did not become part of this index until 1985 (McDonald’s).
Hudson 2

 

Hudson 3

 

Hudson 4

Implications

The idea that companies decline over time has received attention from a variety of scholars and practitioners. Some observers believe that successful brands must be youthful, while others suggest that companies and products have an inherent lifecycle. The findings of this study, specifically the existence of a large number of brands more than a century old within a group of modern brand leaders, will undoubtedly surprise and challenge such observers.

The results also offer some guidance about the appropriate gauge of longevity for further scholarship related to older brands. Although debate may continue about shorter measures, it seems clear that the intuitively satisfying boundary of 100 years may be applied with some confidence. A significant proportion of firms exceed this milestone, which also exceeds both the average and median age of the sample as a whole, such that it seems to offer a meaningful standard.

The extended longevity of many brands in the Interbrand rankings supports the argument that brand heritage is an important concept. Prior literature discussed the phenomenon of older brands or companies, but such scholarship often relied upon vague conceptual analysis and provided limited evidence. In contrast, this study suggests not only that older brands exist, but that a large proportion of major brands have significant longevity.

The advanced age of many leading brands has implications for practitioners and scholars. For executives within companies that possess older brands, this study suggests the need for stewardship to preserve and protect the equity that resides in historic brands, and for methods to exploit the heritage embedded in such brands for marketing advantage.

For executives within younger companies, this study suggests that opportunities exist to build and preserve equity over extended periods, and that strategic analysis must include consideration of brand heritage effects among older competitors. Brands in the hospitality and travel sector will undoubtedly exhibit heritage effects as they grow older, and the related companies can benefit from insightful management of the history embedded in these brands.

For academics, this study suggests that brand heritage is an important concept within the larger discipline of marketing. The validation of significant age among leading brands informs prior scholarship on a variety of related subjects, and supports the argument that further attention should be directed toward brand heritage effects.

About the Research Methods
The list of brands derived from the Best Global Brands report created annually by the consulting firm Interbrand during the period 2001 to 2010. The purpose of this study was to investigate longevity among a group of leading brands, not to evaluate the methodology used to establish the group itself. The Interbrand rankings were used solely to identify a plausible data set for subsequent historical analysis.
The first step involved aggregation of the ten separate annual Interbrand rankings into a single database. Each annual ranking included 100 brands, but the overall data set included 148 brands that appeared in the rankings at least once. Many brands near the top of the ranking appeared every year, while brands lower in ranking have appeared less frequently.
The second step involved assignment of an industry category for each of the brands. These categories were created and assigned intuitively by the author, based partially upon review of the North American Industry Classification System in the Mergent database.
The third step involved historical research to determine the founding year of each brand. This process followed methodological principles that are well established for historical research on any topic, but relied mostly on secondary sources. Although primary sources are preferred in historical research, the use of secondary sources is a legitimate and accepted technique in some circumstances. The nature and size of the data set in this study precluded the examination and validation of primary sources for each brand.
Three sources were consulted for every brand. First, the author reviewed the historical narrative about each brand or parent company within the International Directory of Company Histories. Second, the author reviewed the official historical profiles provided by the current owners of each brand, which were usually found within corporate websites.  Third, the author conducted searches in the online trademark databases of the European Union and the United States Government.
In some instances, there was significant ambiguity or contradiction in the preliminary references and therefore additional sources were consulted. In most cases, the additional sources were also secondary in nature. These included articles in academic journals, books written by historians and journalists, or correspondence with archivists regarding primary sources in their collections. In a few cases, the author was able to find primary sources that could be reviewed remotely. These included historical newspaper collections, which offered definitive evidence of brand usage no later than a particular date.
Ambiguity about dates often required significant interpretation and analysis by the author. Three types of problems occurred routinely. First, many of the brands were founded after the related organization was officially established. This usually occurred because a new product or business unit was subsequently introduced. Sometimes the new product was so successful that the entire company was re-named with the product brand. Second, brand usage sometimes preceded the official company founding date. This typically involved use of the brand by founders in a prior partnership or company. Third, trademarks were sometimes registered years or decades after the first usage.
Therefore legal actions (such as incorporations and trademark registrations) did not always provide reliable measures for the longevity of brands. Rather the primary criterion adopted for this study was the verifiable first usage of the brand as a formal term associated with the provision of a commercial product or service.
Ambiguity was also apparent in older brands that have changed over time. This may have involved changes in spelling, wording, partners, or translation (from the language of origin). This may also have involved the use (formal or informal) of acronyms derived from the original name. The approach in such cases was to adopt the oldest date upon which the name (or part of the name) was first used in a form that would be recognizable to subsequent customers as representing the same business offering.
After the historical research was completed, the final step involved determination of the age of each brand. The author subtracted the founding year from the year 2010, which was the final year in the data set. This was calculated using calendar whole years, with no consideration of the exact date (month and day) of founding.
Further details about research methods, interpretation of evidence, and the determination of specific founding dates for each brand are available directly from the author.

 

About the Research Sources
The list of brands derived from the Best Global Brands report created annually by the consulting firm Interbrand during the period 2001 to 2010, which was also published in BusinessWeek during the period 2001-2009.  Sources for historical data included Historical Components of the Dow Jones Industrial Average from McGraw Hill Financial, the International Directory of Company Histories from Gale, the Mergent Online Database, the ProQuest Historical Newspapers Electronic Database, the Trademark Electronic Search System of the European Union, the Electronic Search System of the United States Patent & Trademark Office, and a multitude of websites and publications produced by the companies that own the brands included in this study. Perspective on the historical emergence of industries derived from the work of Alfred Chandler, especially his books The Visible Hand and Scale and Scope. Background literature about brand heritage included work by John M.T. Balmer, Stephen Greyser, Bradford Hudson, and Mats Urde. Background literature about older brands included work by Stephen Brown, Joel Evans, Gregg Lombardo, Robert Kozinets, and John Sherry. Background literature about organizational longevity included work by Simon Caulkin, Arie de Geus, Richard Hall, the Harris Corporation, and Ichirou Horide. Background literature about historical research methods included work by Mary Fulbrook, Peter Golder, Louis Gottschalk, Terence Nevett, and Ronald Savitt. The complete inventory of sources constitutes more than 500 individual citations. Further details are available directly from the author.

Brad HudsonBradford Hudson is Associate Professor of the Practice of Marketing and Assistant Chair of the Marketing Department in the Carroll School of Management at Boston College. Previously he was a faculty member at Boston University, where he held concurrent appointments as Associate Professor of the Practice of Marketing and Business History in the School of Hospitality Administration and Lecturer in Marketing at the Graduate School of Management. He holds a Ph.D. in business history from Boston University, a master’s degree in services marketing from Cornell University, and a certificate in strategy from Harvard Business School. He is a former Fulbright Scholar. Email bradford.hudson@bc.edu

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Roman Ways: The Endurance of Patterns in Travel and Hospitality from Antiquit

February 1st, 2014 in History, Hotels, Restaurants, Technology, Winter 2014 0 comments

By Bradford Hudson

A popular cultural narrative suggests that hospitality chains are a product of modern America. Although it seems clear that multi-unit hotel and restaurant brands proliferated in the United States during the twentieth century, historical research demonstrates that the phenomenon is actually much older. The origins of hospitality chains can be traced back to the Roman Empire. Organizational systems and travel behaviors have remained remarkably similar throughout Western civilization during the past two millennia.

Ancient Rome

The ancient Romans built more than 250,000 miles of roads throughout Europe and the Mediterranean region, including more than 50,000 miles that were paved with stones. The primary purpose of such roads was to facilitate the quick and reliable movement of public couriers and military forces. These roads were divided into sections of 1,000 (mille) paces or 5,000 feet. This constituted a Roman mile and is the derivation of the English word ‘mile.’ Along major roads, the engineers installed stone posts every mile to mark the distance and provide information to travelers.

At regular intervals along these roads, relay stations were established where travelers could rest, feed and water their oxen or horses, exchange horses, or pass communications from one rider to another. These were located at a distance equivalent to one day of travel, which was typically about 20 miles. An extended journey was thereby divided into multiple stages between posts and relay stations.

Guest houses with dining facilities were established at each relay station. Originally the state operated these as barracks for military or government officials. Eventually a shadow system of commercial places to stay or eat developed near relay stations.

Medieval England

Travel patterns maintained a great deal of continuity after the fall of the Roman Empire. The roads were durable and remained the primary means of land travel well into the Middle Ages. Systems of communication also followed the Roman model, as messages continued to be transmitted by couriers on horseback.

The relay stations eventually fell into disrepair, but they were periodically replaced over the centuries, often being rebuilt on the same plot of land. Travelers still needed to stop at a secure place to rest for the night, couriers still needed to pass messages among themselves, and horses still needed to be watered or exchanged. The system of accommodation along the Roman waysides continued.

In Britain, many of the terms for elements of these transportation and communication systems were eventually replaced by English equivalents. The Roman roads became known as ‘post roads’ due to the distinctive milestones positioned or posted along the route. The public courier system was eventually reconstituted by Henry VIII, who appointed a ‘Master of the Posts’ to manage the network. The duty of station keepers to provide services to official couriers was recognized by their appointment as ‘post masters.’

The relay stations became known as ‘post houses’ or ‘posting houses.’ These often served couriers, but the suffix ‘house’ emerged to signify a lodging facility, while the term ‘office’ later identified the distinct function of a courier station. An Old English word for dwelling evolved into the modern term ‘inn.’

During this period, suspension systems were added to wagons to enable a more comfortable ride along uneven road surfaces. The new vehicles were known as ‘coaches.’ Those that carried passengers for hire along 18 the post roads, in stages between post houses, became known as ‘stage coaches.’

American Railroads

At the beginning of the eighteenth century, Thomas Newcomen developed the first practical steam engine, to pump water out of mining shafts in England. This is widely recognized as a moment of acceleration in the Industrial Revolution. A century later, the same engine technology was applied to a system of coaches running on rails to create the passenger train.

The first major railway in the United States was the Baltimore & Ohio Railroad, which was established in 1827. A half century later, there were more than 150,000 miles of track throughout the United States. Trains stopped periodically to pick up and discharge passengers and freight. More importantly, the steam engines that powered these conveyances needed to replenish their supplies of coal and water on a regular basis. Therefore, a series of stations were created at intervals along the rail lines.

Wherever railroad stations were established, a hospitality infrastructure appeared almost immediately, for several reasons.

First, efficient operations required that passengers be ready to board together during a narrow timeframe, which often required an overnight stay before or after the day of travel. Second, at stations located near regional maintenance facilities, the railroad companies needed transient accommodations for their own employees traveling on business. Third, during the early years, trains did not have dining cars, so passengers had to disembark during long journeys to obtain food and drink.

Some of these hotels and restaurants were constructed and operated by the railroad companies themselves, some were created through partnerships between railroads and independent operators, and some were started by enterprising businesspeople with no direct connection to the railroads. Perhaps the most famous of these partnerships was established between the Atchison, Topeka & Santa Fe Railroad (AT&SF) and the Fred Harvey Company.

Harvey opened the first restaurant of this collaboration inside the railroad station at Topeka, Kansas in 1876. By the turn of the century, his company operated nearly 100 hotels and restaurants, mostly along the AT&SF main line through the southwestern United States, and employed almost seven thousand people.

American Highways

The road system in the United States was antiquated at the beginning of the twentieth century. Most roads were dirt or gravel. Few were paved with hard surfaces such as stone, brick, concrete, or asphalt. The modern American highway system has its origins in two phenomena.

First, consumer demand for automobiles increased dramatically after the Ford Motor Company introduced the relatively affordable and reliable Model T in 1908. Ownership grew steadily over the next few decades, surpassing one automobile per American household on average by 1950. During this time, drivers increasingly complained about the quality of the road system on which their vehicles operated.

Second, after military leaders grasped the importance of logistics and mechanized warfare in Europe during World War I, they turned their attention to improving the road system at home. The United States Army dispatched an experimental convoy of trucks to drive across the American continent in 1919, but the roads were so poor that the journey took more than two months and numerous vehicles were lost along the way.

Subsequent publicity led to passage of the Federal Highway Act in 1921, which supported the improvement of roads nation-wide and the construction of an integrated national highway system. Among the new interstate roads was Route 66 from Chicago to Los Angeles, the first portion of which was designated in 1926. This paralleled the main route of the Atchison, Topeka & Santa Fe Railroad.

Three decades later, renewed complaints about the quality of the road system and concerns about military mobility again led the federal government to act, with passage of the National Interstate and Defense Highways Act in 1956. This funded a series of new or upgraded roads, which borrowed design principles from the innovative German autobahn system, allowing safe travel at high speeds.

A few insightful hospitality entrepreneurs perceived opportunity in this changing transportation system. One was Kemmons Wilson, who traveled from Memphis to Washington during a family vacation in 1952. He drove the nearly 900-mile route, which required stopping several times for overnight stays. Wilson was extremely dissatisfied with the poor quality of roadside lodging, and he subsequently decided to build his own version of the perfect motel. The first such property was built in Memphis and named ‘Holiday Inn’ after a popular film. Within a decade, there were more than 100 such properties throughout the United States, mostly adjacent to highways.

History Continues

The physical ruins of Roman roads remain evident throughout Europe today. Many of the identical routes continue to be traveled. Paving stones and horses have been replaced by asphalt and automobiles, but destinations and travel patterns remain remarkably similar.

Numerous British roads have been identified by their Roman origins for centuries. This includes the modern A3052 through Devon, which was known as the ‘Old Roman Road’ until the introduction of the modern numbering system in 1936.

Along this route today stands the Cat & Fiddle Inn, which has been operating as a hotel and restaurant continuously for several hundred years. It is plausible that this site has been the location of a roadside lodging facility since the period of Roman occupation.

Similar historic inns are located throughout Europe along former Roman roads. The idea of the post road was brought to America during the British colonial era. The ‘Boston Post Road’ connected Boston to New York via Springfield, following a route that was traveled as early as the seventeenth century.

About twenty miles west of Boston, along the Boston Post Road in Sudbury, David Howe began to offer hospitality services to travelers from his home in 1716. The celebrated poet Henry Wadsworth Longfellow visited in 1862, and subsequently used the Howe Tavern as the setting for his collection Tales of a Wayside Inn. The tavern quickly became known informally as ‘Longfellow’s Wayside Inn,’ which was adopted as its official name in 1897. Today, the Wayside Inn is one of the oldest continuously operating hospitality businesses in the United States, and is listed on the National Register of Historic Places.

Although the Boston Post Road is no longer a major highway, the longstanding travel patterns between Boston and New York continue. The historic route runs parallel to modern interstate highways through Massachusetts and Connecticut. And along the original post road itself—only seven miles west of the Wayside Inn at the intersection of Interstate 495—travelers today can find accommodation and refreshment at a Holiday Inn.

The Post House Principle

The ancient system of relay stations has also survived to the modern era as an intangible business practice. Entrepreneurs have been following transportation routes for centuries, seizing opportunities to meet consumer demand wherever travelers need to pause for refreshment or sleep.

This phenomenon is not exclusive to European civilizations or the regions formerly part of the Roman Empire. The practice of establishing stations along travel routes can be found in cultures throughout the world. Nonetheless, the interdependent development of travel systems and the business of hospitality are particularly well documented in the historiography of ancient Rome, and physical evidence is readily apparent at excavated ruins through-out Europe.

The Roman relay station, the medieval post house, the New England inn, the railroad restaurant, and the highway hotel all share a common heritage. Just as the horses of ancient couriers stopped for water, so did the ‘iron horses’ of the railroads. Just as ancient oxen paused to forage, so do automobiles stop for gasoline. And just as ancient voyagers needed to stop for sleep or nourishment, so do modern travelers visit roadside hotels and restaurants.

The idea of a multi-unit hospitality system—with a series of similar units operated by a single entity or by independent entrepreneurs using common principles, with relatively consistent expectations from diverse consumers, regarding the range and quality of services that might be available, across a broad geographic region—is nothing new. Modern chains of hotels and restaurants are following in the footsteps, sometimes literally, of prior generations.

The origins of American hospitality can be traced directly from the ancient Roman occupation of Britain, through medieval England, to the British colonial era in America, through the period of Industrial Revolution and westward expansion in the United States, and finally to the modern era.


Brad HudsonBradford T. Hudson, Ph.D. is Associate Professor of the Practice of Marketing in the Carroll School of Management at Boston College. He is also Assistant Chairperson of the Marketing Department at Boston College. Previously he was a faculty member at Boston University, with concurrent appointments as Associate Professor of the Practice of Marketing in the School of Hospitality Administration and Lecturer in Marketing at the Graduate School of Management. He holds a master’s degree in services marketing from the Cornell Hotel School and a Ph.D. in business history from Boston University. He is a former Fulbright Scholar. Email bradford.hudson@bc.edu

 

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The Morris Nathanson Design Collection

July 1st, 2013 in Design, History, Real Estate, Restaurants, Summer 2013, Uncategorized 0 comments

Morrison 1By: Christopher Muller

What is unique about being a designer and also an artist is that you are always composing and designing. It’s like breathing. It’s inherent. It’s like musicians who are always humming when they walk down the street and don’t even know they are doing it.-Morris Nathanson

For more than a half century, Morris Nathanson has been at the forefront of creative interior design for the hospitality industry. Along with his own artistry, his influence on many of today’s top hospitality designers is a testament to his lasting vision.

Originally trained in theatrical and stage design, Nathanson worked early in his career for the Paramount Restaurant Supply Company in his native Rhode Island, where he helped create iconic concept designs for companies such as Dunkin’ Donuts

With an entrepreneur’s drive and an artist’s eye, he was a pioneer in the field of restaurant and hospitality design when he opened his own firm in 1967, Morris Nathanson Design. Since then Morris has nurtured, trained, and mentored scores of designers and project managers, while helping to launch the concept and brand development for dozens of landmark restaurant companies.

Nathanson has been designated as a ‘Thought Leader’ by the American Society of Interior Designers and his firm has received numerous accolades. He is also a recognized fine artist and an exhibiting member of the Providence Art Club, which was founded in 1880 and is one of the oldest in the country

The images that follow are a small sample of the more than 400 hand-drawn renderings of restaurant, hotel, and resort projects that have been donated to Boston University. They are part of the Morris Nathanson Design Collection in the renowned Howard Gotlieb Archival Research Center.

All images from the Morris Nathanson Design Collection in the Howard Gotlieb Archival Research Center at Boston University, reproduced by permission.


chris-muller-423x636Christopher C. Muller is Professor of the Practice of Hospitality Administration and former Dean of the School of Hospitality Administration at Boston University. Each year, he moderates the European Food Service Summit, a major conference for restaurant and supply executives. He holds a bachelor’s degree in political science from Hobart College and two graduate degrees from Cornell University, including a Ph.D. in hospitality administration. Email cmuller@bu.edu

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Brand Heritage and Heritage Tourism

April 1st, 2013 in History, Hotels, Real Estate, Restaurants, Spring 2013, Uncategorized 2 comments

Chateau Frontenac

Chateau Frontenac (Photo: Creative Commons//Tony Webster)

By Bradford Hudson

Brand heritage is an emerging topic within the marketing discipline, which suggests that the consumer appeal of products and services offered by older companies may be enhanced by the historical characters of their brands. The partially shared nomenclature with the well-established field of heritage tourism is more than coincidental, as both concern the interplay of history with contemporary visitor behavior. This conceptual article explores the common elements of brand heritage and heritage tourism, while also clarifying some important differences between the two fields.

Brand Heritage

The idea that brands may have a heritage dimension emerged at least a quarter century ago, when it was suggested in Harvard Business Review that the historical approach could provide brand images and themes for advertising. The term “brand heritage” was also mentioned in early work on brand equity by David Aaker, as an element of brand identity, but the topic was not explored in any depth. There has also been a recurrent but steady stream of literature on topics relating to older companies and their brands. This includes articles about the status and benefits of organizational longevity, and the benefits that may accrue from residual brand equity. It also includes topics such as authenticity and nostalgia. Scholars working in the area of corporate marketing and brand identity have recently suggested that historic brands constitute a distinct conceptual category. Mats Urde, Stephen Greyser, and John Balmer have argued that such brands require a different approach to brand management than younger brands. Activities related to brand heritage include uncovering aspects of heritage through archival and consumer research, activating that heritage through product design and marketing communications, and protecting that heritage through stewardship and attention to continuity.

Examples of marketing related to heritage include the citation of company founding dates on packaging or in advertising, the celebration of corporate anniversaries, and the reprise of discontinued jingles or mascots. Such marketing may also involve references to a company in historical context or to iconic artifacts in possession of the company.

It could even include the creation of updated products that incorporate visual elements from prior versions, or the design of new offerings that refer to idealized or artificial memories of historical reality.

An excellent case of the brand heritage phenomenon is provided by the Cunard Line, which was founded in 1839 and eventually became the most famous operator of transatlantic ocean liners.

The brand was acquired in 1998 by Carnival Corporation, which reinvigorated the under-performing company by paradoxically focusing on both innovative product development and retrospective brand positioning. The result is new ships such as Queen Mary 2, which offer an integrated blend of modern amenities with historical references embodied in design, communications, and operations. Scholars working in the area of brand heritage hope to explain the nature and attraction of older brands, investigate the use of historical references in current marketing, explore the heritage aspects of brand equity, offer an additional dimension to discussions of product life cycle, and develop practical tools for executives who manage historic brands.

Differences in Focus and Scope

The fields of brand heritage and heritage tourism are closely aligned. Their theoretical foundations often overlap, some of the tourism literature predates similar work on brands, and brand researchers have cited tourism precedents regularly. However, before delving into these commonalities, it may be useful to examine the divergence between them. A clarification of the focus and scope of each topic will explain why these are separate sub-disciplines. The differences are several.

First, brand heritage focuses exclusively on marketing. It can be broadly defined to include consideration of the various financial, managerial, and operational issues that influence marketing decisions. This is especially important in services marketing, which concerns the interplay of production and marketing. Nonetheless, brand heritage is circumscribed by the marketing discipline and does not fully encompass the various functions of management.

In contrast, marketing is only one aspect of heritage tourism. The field also includes topics such as venue and visitor management, interpretation and education, historic preservation, and environmental sustainability.

Oreo 100th Anniversary (From the author's personal collection, used with permission)

Oreo 100th Anniversary (From the author’s personal collection, used with permission)

Second, brand heritage considers the overall brand of a corporation and the subsidiary brands of its products or services. Related geographic locations, such as the sites of manufacturing or distribution facilities, are usually either unknown to the consumer or irrelevant to the buying decision. It could be argued that country of origin effects may influence consumer behavior in some instances, but this has not yet been demonstrated in the context of brand heritage. In any case, brand heritage is not exclusively or predominantly geographic.

In contrast, geography is often an important issue in heritage tourism. Perhaps the clearest examples of heritage tourism involve travel to particular locations such as historic cities, the birthplaces of famous individuals, or archaeological sites. Even when a broad cultural category is involved, it is often difficult to separate history from geography.

Third, brand heritage often involves the extension of brand identity onto new products that have no inherent historical characteristics or for which the historical element is understood to be trivial and falsified. In the case of the former, the brand heritage is separated from the immediate value proposition and the historic nature of the brand may function as an extrinsic cue for issues related to longevity, such as expertise or quality. In the case of the latter, the historic nature of the brand may be referential and intended to invoke an affective reaction, such as humor or nostalgia. The offering is understood to be a commercialization and interpretation of some related genuine artifact.

In contrast, heritage tourism often requires originality and an unbroken connection between offering and its corresponding historical reference. Even when reproductions are involved, they usually incorporate genuine artifacts (such as antique furnishings within a new building) or they are located on the exact site of any related historical event. The offering is understood to be as genuine and historically accurate as possible.

Fourth, brand heritage is oriented toward commercial endeavors in the private sector. The basic principles could be applied in other situations, but it is essentially a business subject. Cultural factors are relevant only in the context of consumer behavior, while political factors are peripheral issues that merely constrain marketing strategy. It could be argued that the increasing emphasis on corporate social responsibility requires an enlargement of this characterization. Nonetheless, the motivating factor in brand heritage is economic rather than social.

In contrast, heritage tourism is mostly a phenomenon of the public sector, broadly defined to include both government and non-profit organizations. The purposes of such offerings include cultural enrichment, education, and the creation or preservation of collective or national identity. There are exceptions, such as commercial attractions sponsored by firms to describe their historical origins, but these are often driven by peripheral social objectives and have vague connections to marketing strategy. Heritage tourism is seamlessly integrated with public policy in a way that brand heritage is not.

Lastly, brand heritage is usually oriented toward outbound distribution. Products or services emanate from a vague central location and are consumed remotely in retail units or at home. The exact distribution site is usually irrelevant and changeable.

In contrast, heritage tourism is usually oriented toward inbound distribution. The specific and unique geographic location is an important part of the value proposition for consumers. Given the relationship to public policy, it may not be possible to move the delivery location, even if logistically feasible. Distribution is inseparable from the local marketplace and the extended travel system, offering additional complexities in forecasting and ensuring demand. There are also usually limits to operational capacity and constraints on the ability to grow the brand.

The Hospitality Sector

An exception to some aspects of the divergence between brand heritage and heritage tourism is provided by the category of business for which consumer environments are an integral part of the value proposition. This includes the retail industry, especially companies with iconic flagship stores such as Harrods. It also includes the hospitality sector and its component industries including hotels and lodging, restaurants and foodservice, theme parks, and golf and leisure venues. For older firms in these industries, the dynamics of brand heritage and heritage tourism are often intermingled. The hotel industry offers an excellent case in point.

Unlike the manufacturing sector and many industries in the service sector, the hotel industry is geographically dependent. Even companies with multiple units and global brands that transcend specific regional associations have operations that are geographically specific. Many individual properties have their own distinct names, especially historic hotels that predate current management agreements. For iconic hotels such as the Parker House in Boston, now operated by Omni, these names are widely known and constitute subsidiary brands.
Many guests choose these hotels over competing alternatives because of their historic status, and some are even motivated to travel for the purpose of staying at famous hotels.

The hospitality sector not only tends toward geographic dependence, but also toward property dependence, meaning that it is constrained by a long term commitment to particular structures or land. For an iconic hotel whose identity is inseparable from its architecture, preserving the condition of the building and managing its relationship with the surrounding environment are important tasks.

The marketing ethic must extend from sales to stewardship, marketing responsibilities must include involvement in design and construction, positioning exercises must consider the social and cultural context, and marketing activities must be enlarged to include interaction with political leaders and community activists. Thus in the hotel industry, brand heritage encompasses a wide variety of duties in management and public policy, in manner similar to heritage tourism.

In manufacturing, the extension of brand heritage from genuine artifacts to reproductions may be relatively simple to accomplish. In the hotel industry, the task becomes more complicated. An older company with hundreds of hotels, encompassing both historic and modern properties, can probably extend its brand to a new development without losing any brand associations. However, an independent hotel may have problems when similarly extending its name to another property (or even a building extension) for the first time, as the positive brand effects from the original hotel may not transfer to the new location. Under such circumstances, maintaining an explicit connection with the original hotel will help alleviate doubts among consumers, but there may still be resistance and disappointment among those who are concerned about authenticity.

Thus in the hotel industry, brand extensions for historic hotels may be constrained by the same dynamics evident for heritage tourism venues.
Unlike the manufacturing sector and many industries of the service sector, the hotel industry has inbound distribution. Consumers travel from many different locations to the centralized production facility. Distribution is dependent on the extended travel system, supply is constrained by fixed capacity, and growth is often precluded by the surrounding neighborhood. Thus the hotel industry shares many of the characteristics evident in heritage tourism scenarios that relate to inbound distribution.

Similarities in Theory

Despite the differences in focus and scope highlighted above, there are many underlying similarities between brand heritage and heritage tourism. The most significant common elements are comprehensive frameworks borrowed from two other disciplines. The first is the framework of history. This includes the historical paradigm, meaning a way of thinking about the nature of human behavior and social institutions by examining their changes over time. The framework also includes the specifics of historical research methodology, the historical narrative as a form of expression deemed to have scholarly validity, and the vast content of our accepted historical inventory on trends and events ranging from military conflict to economic development. Even if history is creatively or selectively adapted to construct a particular interpretation, the basic historical approach is followed. Exploring, understanding, and interpreting the past are important in the marketing and management of heritage, whether for older companies or ancient cultural sites.

The second framework is that of marketing. Almost every aspect of basic marketing theory can be applied to either historic products or historic sites, ranging from strategy and market research to consumer behavior and communications. Any heritage site that attracts visitors, even those with managers who consciously eschew promotion, is subject to marketing phenomena.

Brand heritage and heritage tourism also share three important conceptual underpinnings. Although less comprehensive than the frameworks discussed above, they are nonetheless rich in theoretical content.

The first concept is that of identity. In the field of brand heritage, the exemplary article emerged from scholars working in the domain of corporate identity. Subsequent work has suggested that the history embedded in a brand is operative in defining the identity of the brand, but may also be involved in defining the identity of the consumer who acquires products of the brand, in a form of symbolic interactionism. Similarly in the field of heritage tourism, the definition and preservation of identity is a key theme.

The second shared concept is that of nostalgia. This involves a longing for the past, a sentimental recollection of yesteryear, or a penchant for objects or experiences that are associated with a prior era. The phenomenon of nostalgia has been studied in disciplines such as sociology and psychology, and has also been explored extensively in marketing literature related to older brands and products. Similarly in heritage tourism, nostalgia has been discussed extensively.

The third shared concept is that of authenticity. This considers the dichotomy between the true and false nature of objects or people, suggests that originality is preferred, and implies that reproductions are not legitimate. The topic of authenticity has been examined in a range of disciplines including American studies, anthropology, psychology, and sociology. It has also been explored in marketing and consumer literature, and represents an integral part of recent scholarship on brand heritage.
Similarly in heritage tourism, authenticity has been discussed extensively.

The Interplay of Brands and Venues

Academics working in the fields of brand heritage and heritage tourism, as well as practitioners working with older brands or tourism venues, should be aware of the similarities and differences between these two topic areas. In some cases, conceptual principles and marketing tactics may be transferable, and consideration of heritage practices in either realm may offer new perspectives. In other cases, a better understanding of these fields may discourage attempts to duplicate elements or methods that may be inappropriate.

For the hospitality sector in particular, there is much to be learned at the intersection between brand heritage and heritage tourism. Historic hotels may have multiple layers of brand heritage, involving both older corporate brands and the names of specific historic properties, which generate consumer demand. For many historic hotels, the buildings may also be integral parts of broader historical neighborhoods or landscapes, which generate tourism demand.

This multidimensional character is exemplified by the Château Frontenac. The famous hotel displays the Fairmont corporate brand, but enjoys even higher awareness for its specific property name. It is also located adjacent to the Citadelle, at the epicenter of the historic district of Québec City, which has been designated a World Heritage Site by the United Nations Education, Scientific and Cultural Organization (UNESCO).

In such instances, the conceptual overlap between brand heritage and heritage tourism constitutes more than a point of intellectual curiosity. The marketing of historic hotels can often benefit from the application of principles in both fields, and these related disciplines should be considered in an integrated fashion by both academic researchers and industry practitioners.


Brad HudsonBradford T. Hudson, Ph.D. is Associate Professor of the Practice of Marketing in the Carroll School of Management at Boston College. He is also Assistant Chairperson of the Marketing Department at Boston College. Previously he was a faculty member at Boston University, with concurrent appointments as Associate Professor of the Practice of Marketing in the School of Hospitality Administration and Lecturer in Marketing at the Graduate School of Management. He holds a master’s degree in services marketing from the Cornell Hotel School and a Ph.D. in business history from Boston University. He is a former Fulbright Scholar. Email bradford.hudson@bc.edu

Buffet-Américain

April 1st, 2013 in Europe, History, Restaurants, Spring 2013 0 comments

By Peter Szende

The Great Exhibition of the Works of Industry of all Nations – also known variably as the Great Exhibition, the Crystal Palace Exhibition, or the World’s Fair – occurred in London during 1851.

This established the standard for industrial and cultural exhibitions throughout Europe and the United States during the next century. It also inspired Napoleon III to organize his Exposition Universelle des produits de l’Agriculture, de l’Industrie, et des Beaux-Arts de Paris (translated as Universal Exhibition of Products of Agriculture, Industry, and Fine Arts of Paris) in 1855.

Buffet
ABOUT THE RESEARCH The original poster is archived within the collection of the Bibliothèque nationale de France and has been reproduced by permission. This article is based on a variety of publications from the nineteenth century including Dictionnaire analogique de la langue française (Boissière, 1862), Guide pittoresque du voyageur (Lemaistre, 1856), La vie à Paris: Chroniques du Figaro (Villemot, 1858), Paris Herself Again in 1878-9 (Sala, 1882), and Revue de Paris (1855). Original poster in the collection of the Bibliothèque nationale de France, reproduced by permission.

The Paris Exhibition was a catalyst for the creation of numerous related exhibits, attractions, and businesses in the neighborhoods surrounding the exhibition grounds along the Champs-Elysées. One of these was an innovative restaurant concept portrayed in the vintage advertising poster that is reproduced on a following page. The restaurant does not have a single name in the modern sense, but rather is identified by its style of service and its location.

A buffet-Américain (American buffet) was a place where one could eat or drink while standing. The phrase referred to the growing popularity of impromptu snacking in nineteenth century America, and represented a cross-cultural dining fad that complemented the themes of the Exposition Universelle.

This particular establishment resembled an integration of two concepts that are familiar today, a fast-casual bakery café and an Italian enoteca (wine bar) with standing counters. The text at the bottom of the poster reads “VIANDES FROIDES PATISSERIE” (cold meats and pastries) and “Vins fins Français et Etrangers à la Bouteille et au Verre” (fine wines from France and abroad by the bottle and the glass). The food aspects targeted passersby and a neighborhood business crowd by offering gourmet “sandwiches with ham, poultry wings, and galantine placed between two slices of tender bread slices” (Villemot, 1858). The beverage aspects appealed to the popular urban trend of people socializing over a large selection of wines and other alcoholic beverages by the glass. One observer noted that the place served premium Allsopp beer “either bottled or on draught” (Sala, 1882).

This restaurant was located in the “MAISON DU LINGOT D’OR” (home of the gold ingot) in the Passage Jouffroy, which was a fashionable shopping arcade along the Boulevard Montmartre. The space had previously served as headquarters for a government lottery, which awarded a gold bar valued at more than 400,000 francs.

The poster was created in the workshop of Jean Alexis Rouchon, who is regarded as a pioneer in commercial graphic design in France. He is particularly known for advertising posters of this type, several of which are included in the collection of the Bibliothèque nationale de France (National Library of France or BnF).

Although this buffet-Américain attracted some attention, the business eventually disappeared from the Paris restaurant scene. This Rouchon poster exemplifies commercial art of the era, and also provides a glimpse of a short-lived dining concept that was ahead of its time.


DSC_0267Peter Szende is Associate Professor of the Practice of Food & Beverage Management in the School of Hospitality Administration at Boston University. He has over 25 years of hospitality management experience in Europe and North America with organizations including Four Seasons Hotels. He holds a doctorate in business administration from the University of Economic Sciences in Budapest, Hungary and a diploma in hotel administration from the Centre International de Glion, Switzerland. Email pszende@bu.edu

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An Important Arrival: The Anatomy of a Vintage Advertisement

January 1st, 2013 in Airports, Design, History, Hotels, Marketing, Winter 2013 0 comments

By Bradford Hudson

The advertisement for American Airlines that is reproduced on the following pages appeared in national magazines in late 1957. It is a two-page centerfold color spread depicting a couple arriving at the Ritz-Carlton Hotel in Boston, after a flight on American Airlines.

The discussion below provides a deconstruction and analysis of its elements, considers the related evolution of the airline and hotel industries, offers a glimpse of advertising agencies during a formative period, and reflects on some related issues in marketing. This will hopefully appeal to scholars and enthusiasts of brand heritage, transportation history, advertising history, or travel ephemera.

Advertising

Original advertisement from the collection of the author, used by permission

 

American Airlines

American Airlines was formed through a series of acquisitions of smaller aviation companies between 1929 and 1934. American quickly became the leading domestic airline, in terms of revenue passenger miles, and was listed on the New York Stock Exchange in 1939. American remained among the leading airlines over the following decades, ranking second in size by the end of the century, and arguably first in prestige among consumers and industry analysts.

This advertisement appeared at the dawn of the jet age. Most carriers were still using propeller aircraft exclusively, including American Airlines whose flagship was the DC-7 featured here. American would offer jet service on transcontinental routes starting in 1959, using the new Boeing 707 aircraft.

Mercury Service

The headline “Sign of an important arrival – The Mercury emblem” refers to the travelers and their luggage tag, which displays the subsidiary product brand and logo for the ‘Mercury Service’ offered by American Airlines.

The name was inspired by the Roman winged messenger god Mercury, and had been used to designate high-speed transcontinental travel since the introduction of the DC-3 aircraft in 1936. This service became non-stop with the introduction of the long-range DC-7 aircraft on the route from New York to Los Angeles in 1953. Mercury Service was extended to ten other cities in 1957, including a non-stop route from Boston to Los Angeles. This advertisement was part of a themed series with different versions for each city. It was intended to reinforce the simpler and more factual announcements that had appeared immediately after the service extensions were introduced.

Ritz-Carlton

The hotel depicted in the advertisement is the original Ritz-Carlton property in Boston, located at the corner of Arlington Street and Newbury Street. Opened in 1927, it was part of a chain of luxury hotels throughout Europe and the Americas, which was founded in association with the legendary hotelier César Ritz. Most of these hotels did not survive the Great Depression, and the Boston location was one of the few remaining properties by 1957. The hotel was known to generations of Bostonians simply as ‘The Ritz’ and was widely regarded as one of the best hotels in the United States.

The property was sold to Atlanta real estate developer William B. Johnson in 1983, who acquired the building to obtain the rights for the Ritz-Carlton brand, which he then extended to a new chain of luxury hotels throughout the United States. The brand was subsequently sold in 1995 to Marriott Corporation, which is the current operator of almost every hotel using the Ritz-Carlton name worldwide.
This is not the current Ritz-Carlton property in Boston, which is located across Boston Common on Avery Street, and was opened in 2001. The original building depicted in this advertisement was purchased by the Tata Group in 2006, which is currently operating the property as a luxury hotel under the Taj brand.

Pricing

The graph in the lower right corner of the advertisement provides a comparison of the change in airline ticket prices against the Consumer Price Index (CPI), during the period 1941 to 1956. The accompanying text notes that consumer prices increased much faster than airline prices during this period, but does not offer any conclusion about the relevance of this information for consumers. Presumably, the graph is presented as a form of evidence for a claim regarding the increasing affordability of air travel.

The same method of comparison can be used to extrapolate prices forward over the next half century, based on CPI data from the Bureau of Labor Statistics. As an example, a round-trip coach class ticket on American Airlines nonstop from New York to Los Angeles was advertised as low as $198 in 1957.

Using CPI data, we can calculate the equivalent value of this ticket at $1,618 today. However, during a recent search of the American Airlines reservations website, a similar ticket was priced as low as $324.Prices in the hotel industry offer another point of comparison. As an example, a room night at the Ritz-Carlton Hotel in Boston was advertised in the American Hotel Association Red Book as low as $9 per night for 1957. Using CPI data, we can calculate the equivalent value of this room at $74 today.

However, during a recent search of the reservations website for the current Ritz-Carlton in Boston, the least expensive room was priced at $395.

Combining these calculations for the airline and hotel industries provides a stunning contrast. The airline ticket in 1957 was about five times as expensive as the airline ticket today. The reverse is true for the hotel industry. The hotel room today is more than five times as expensive as the room in 1957.It must be acknowledged that such comparisons are based on single examples, and that the Consumer Price Index may not offer a perfect conversion rate for updating the prices of airline tickets or hotel rooms. Furthermore, there have been several developments since the appearance of this advertisement that have caused seismic shifts in the airline and hotel industries. These include computerized reservations systems, variable pricing methods and revenue management, the deregulation of the airline industry in 1978, changes in the ownership structure of the hotel industry, and the rise of internet travel intermediaries.

Nonetheless, even if these specific conversions are not precise, they are valid in principle. The price of airline tickets has declined relative to other goods and services over the past half century, including hotels. From a consumer viewpoint, airline travel became more affordable during the decade prior to this advertisement and this trend has certainly continued since then. However, from a business viewpoint, it could be argued that airline executives have failed in maintaining their strategic position.

Luxury

The couple depicted is fashionable and presumably wealthy. The woman is wearing large diamond earrings, while the bellman in the background is carrying her fur coat.

This advertisement is attempting to position American Airlines and the Ritz-Carlton Hotel as comparable products. The Ritz-Carlton in Boston was certainly a luxury hotel at the time, and the brand remains so today. As the hotel industry expanded over the next half century, and as product segmentation became more pronounced, the Ritz-Carlton brand maintained its prestige.

In contrast, the entire airline industry has lost its associations with luxury. Air travel was originally an expensive mode of transportation, reserved for small numbers of senior executives and affluent individuals, but this changed during subsequent decades. According to Almanacs of American Life, the number of airline passengers increased from about six thousand in 1926 to 12 million in 1946 to almost half a billion by the end of the century.

Underlying causes included improvements in the speed and comfort of aircraft, growing confidence about safety among consumers, an increase in disposable income, and the competitive effects of deregulation. The subsequent rise of discount airlines seriously undermined consumer associations between air travel and luxury, while wealthy travelers eventually abandoned commercial aviation entirely, after the introduction of fractional ownership systems for private jets.

Co-Branding

This advertisement offers an early example of cooperative marketing between two separate companies, which formed an alliance to promote their brands together. The benefit for Ritz-Carlton becomes apparent if one considers its strategic position at the time. The hotel was built as part of an extended chain, but this was now defunct and the Boston property was independently operated. The owner could not afford such an extravagant promotion, and was undoubtedly delighted to have the advertisement funded by a marketing partner.

The benefit for American Airlines becomes apparent if one considers the changing nature of airlines, which were already in the process of transforming from luxury products to consumer commodities.

American Airlines needed to differentiate itself from other airlines, while reinforcing prior associations with luxury that could support premium pricing. It wanted to share in the reflected glory of the Ritz Carlton.

This advertisement includes visual signals of both aspects of the conflicted status of the airline industry at the time. The woman outfitted in furs, the elite status of the hotel, and wording in the text clearly indicate an appeal based on luxury. And yet, the chart comparing airline prices to CPI data acknowledges that ticket prices are dropping precipitously compared to other goods and services, implying a growing democratization of air travel.

Lennen & Newell

The advertising firm for American Airlines during this campaign was Lennen & Newell. Although virtually unknown today, it was a leading agency with clients that included Colgate-Palmolive, Lorillard, and Nabisco.

The strategic approach, copywriting, and artwork for this advertisement were heavily influenced by Carruth L. ‘Bill’ Smith, who was the account executive for American Airlines at Lennen & Newell.

Perhaps not coincidentally, he was also the brother of Cyrus R. ‘C.R.’ Smith, who served as president of the airline from 1934 to 1968.
This period represents a formative ‘golden age’ for agencies on Madison Avenue, during which the advertising profession entered popular culture. This is exemplified by numerous entertainment offerings in which advertising executives played prominent roles, including feature films such as Lover Come Back (1961) and television series such as Bewitched (starting in 1964).

More recently, this era has been featured in the retrospective television series Mad Men. Lennen & Newell reportedly served as one of the models for the fictitious Sterling & Cooper agency during development of the series. The methods and atmosphere portrayed in the program are not entirely misleading. Former employee Allan Hayes recently remarked that the agency “came closer to Mad Men’s ‘historical accuracy’ than any other place I ever saw.”

Artwork and Copywriting

This advertisement was not considered important by art directors of the era, nor is it considered significant today by art connoisseurs or advertising historians. When asked recently for reactions to this advertisement, several former art directors were dismissive. One remarked that it “follows all the period conventions. Inoffensive, no factual substance, despite the silly graph, and loaded with the client’s good opinion of itself. In 1957, all us lowly artists really dreamed of doing [more innovative] work like Helmut Krone, Milton Glaser and, just a bit later, George Lois.”

The latter refers to advertising art director George Lois, who would eventually be inducted into the Art Directors Hall of Fame and receive the Special Medal from the American Institute of Graphic Arts. Ironically, Lois worked briefly as art director for the American Airlines account at Lennen & Newell during 1957. Lois had a difficult relationship with the agency, the account executive, and the client. In an incident that is now legendary, Lois became so aggravated during a meeting with Smith that he overturned his desk and stormed out of the office, subsequently resigning a few days later. When asked recently to comment on the advertisement reproduced here, Lois disavowed any connection.

Nonetheless, this advertisement is particularly evocative of a distinct era in commercial illustration, and offers a superb example of a style of advertising that was common on Madison Avenue during the post-war period. It also remains a visually compelling and appealing image for certain audiences today, particularly those who have nostalgic views of bourgeois American culture during the 1950s.


Brad HudsonBradford T. Hudson, Ph.D. is Associate Professor of the Practice of Marketing in the Carroll School of Management at Boston College. He is also Assistant Chairperson of the Marketing Department at Boston College. Previously he was a faculty member at Boston University, with concurrent appointments as Associate Professor of the Practice of Marketing in the School of Hospitality Administration and Lecturer in Marketing at the Graduate School of Management. He holds a master’s degree in services marketing from the Cornell Hotel School and a Ph.D. in business history from Boston University. He is a former Fulbright Scholar. Email bradford.hudson@bc.edu

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From Boston to the Balkans: Olmsted’s Emerald Legacy

January 1st, 2013 in Design, History, Winter 2013 0 comments

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Back Bay Fens, Boston // Creative Commons // Andrea Monari

By Christina Luke

South of the Charles River winds the Emerald Necklace, a series of parks that connects several neighborhoods in the Boston area. The genius behind the system was journalist turned landscape architect Fredrick Law Olmsted, who was propelled to the national stage in 1858, after partnering with Calvert Vaux for the design of Central Park in New York City. He subsequently created some of the most prestigious parks in the United States, and influenced the design of recreational areas for generations. Today his vision affects not only Boston, but also defines cultural policy at an international level, constituting the precedent for an element of international tourism development in several regions, including the Balkans and Turkey.

Time in the Wilderness

Olmsted was influenced by a variety of experiences, including his childhood in New England and transatlantic trips to Europe, especially England. However, the inspiration for his vision of the Emerald Necklace came in large part from time spent in California.

Olmsted
Frederick Law Olmsted (1893) // Portrait from the Library of Congress

In 1864, Olmsted was appointed chairman of the first board of commissioners of Yosemite, which is now widely recognized as one of the first public wilderness parks in the world. The following year, Olmsted prepared a report to Congress, in which he stressed that splendor is the “union of the deepest sublimity with the deepest beauty of nature, not in one feature or another, not in one part or one scene or another, not any landscape that can be framed by itself, but all around.”

What Olmsted perceived as the ‘natural’ landscapes of Yosemite were not entirely natural, but large tracts maintained by Native American groups. For Olmsted, the vast expanse of open fields complemented the narrower spaces, enhancing the depth of the viewer’s perspective. It is this feature that he so carefully integrated into his future designs.

Olmsted wrote the initial management plan for Yosemite. He outlined the major features of the park, argued for certain principles in design and conservation, and set forth guidelines for implementing tourism infrastructure within the park. His vision proved to have a significant impact on the development of Yosemite, and inspired supporters of the parks movement for generations. These included President Theodore Roosevelt, who was instrumental in establishing numerous national forests, parks, and monuments. For Olmsted, national parks were to be “a duty of dignity and be committed only to a sovereign state,” a steadfast promise that the United States has continued to uphold.

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Yosemite National Park // Creative Commons // Dijie

A Vision for Boston

Olmsted was engaged by the Boston Park Commission in 1878. His challenge was to improve the ecological health of the saltwater marsh where the Charles River connected to Back Bay, and to create an efficient and effective water management system for the Stony Brook and Muddy Rivers. Olmsted also wanted to create an aesthetically pleasing park that would evoke the cultural landscapes of rural areas, especially farmlands and green pastures, and create a sense of tranquility that would complement the architecture of nearby buildings.

The result was a network of nine interconnected parks and waterways, many of which were created anew, covering more than 1,000 acres. Today, the Emerald Necklace is one of the last remaining intact linear parks designed by Olmsted. Its intended functionality is largely unknown to the public, even to those who enjoy it on a daily basis. The system offers a respite from urban life by providing venues for a morning run, an afternoon sail, or a Sunday stroll.

Back Bay Plan

Plan for Back Bay from Report of the Board of Metropolitan Park Commissioners (1893)

From Scenic to Cultural

The Olmsted plan for Boston not only addressed environmental needs, but also incorporated a progressive social mission. It was intended to create a scenic route that would link the wealthy residents of Beacon Hill and Brookline with the working class residents of Dorchester and Roxbury, both geographically and symbolically. This was hugely influential at the time and subsequently influenced generations of landscape architects, urban planners, and environmentalists.

The Emerald Necklace also served as a conceptual analogy for connecting other types of locations along a discernible path into an integrated whole. The scenic aspects of a greenway that connected separate parks became the inspiration for the designation of routes that connect separate tourism sites.

Somerset Hotel from Boston  University, used by permission

Somerset Hotel from Boston University, used by permission

 

This is evident in the wording chosen by the National Trust for Historic Preservation, which defines a cultural corridor as “a linear region linked together by similar cultural or heritage resources.”

Cultural Corridors

The United Nations established its Educational, Scientific, and Cultural Organization (UNESCO) in 1946. Among the founding principles was a vision to preserve and make accessible places of importance to natural and cultural heritage. A variety of related initiatives have followed including the Man and Biosphere Program, the Convention Concerning the Protection of the World Cultural and Natural

Heritage, Cultural Landscapes, the Global Compact

Initiatives, the Global Partnerships for Conservation Initiative, the Natural Heritage Strategy, and the World Heritage and Sustainable Tourism program. These demonstrate the enduring global commitment to the preservation of natural and cultural landscapes.

Recent reports from these programs have called attention to the prestige conferred by World Heritage status, and provided a framework for initiatives to promote cultural heritage at regional and national levels through preservation and conservation. These reports have also called for an increased emphasis on heritage routes and cultural corridors.

Cultural policy analysts envision seamless connectivity among natural and cultural heritage sites, for visitors moving across ethnic and religious boundaries, as well as national borders. Heritage policy is part of a larger agenda aimed at building democracy through civic spaces that embody acceptance and tolerance. It offers a focal point for negotiating cultural and natural heritage in the context of social connections, political hurdles, ethnic strife, economic development, and urban rehabilitation.

Cultural heritage has become an important element at the negotiating table for diplomats, development agencies, and investors in public-private partnerships. Of keen interest are historic properties that enhance infrastructure in the tourism sector, especially those that can be adapted for use as restaurants and hotels.

The Balkans and Turkey

Cultural corridors are increasingly being viewed as strategic in many parts of the world, and are receiving emphasis in government planning documents such as the Turkish 2023 Tourism Strategy.

Stari Bar by Christina Luke,  used by permission

Stari Bar by Christina Luke, used by permission

Cross-border programs between Bulgaria and Turkey, and between Turkey and Armenia, show a firm policy that views heritage as the base point from which to collaborate on regional economic development. The Council of Europe has launched several programs in southeast Europe that attempt to integrate nature, culture, and people. These include the Emerald Network, the Regional Program on Cultural and Natural Heritage, and Cultural Corridors. Other major players include the World Bank and the United States Agency for International Development, especially in the Sandzak and Novi Pazar regions of the Balkans, which encompass areas of Bosnia and Herzegovina, Montenegro, Serbia, and Kosovo. Smaller programs, such as the United States Ambassadors Fund for Cultural Preservation (AFCP) and the Turkish International Development Agency (TIKA) offer support for more specific projects.

A variety of agencies are supporting preservation projects along heritage corridors in Turkey, including initiatives focused on the synagogues of İzmir and Armenian heritage at Ani, both supported by the AFCP and the World Monuments Fund. Some are aligned with niche markets that cross boundaries under specific labels, such as the European Route of Jewish Heritage and the Routes of the Olive Tree, both supported by the Council of Europe. UNESCO has tentatively listed the Selcuk Caravanserais on the route from Denizli to Doğubeyazit as a World Heritage site, an indication that future sites are likely to cover broad geographic areas, rather than discrete monuments or sites. In fact, it is not only those places fully inscribed as World Heritage sites, but also those on the tentative list that point to the strategic use of the UNESCO brand in promoting regional tourism in Turkey.

The World Monuments Fund has also supported work at the Çukur Han in Ankara, which helped set the stage for the first ‘museum hotel’ in Turkey, the luxury Divan Çukurhan. From the historic hotels of Palazzo Radomiri on the coast of Montenegro to the Pera Palace in the heart of Istanbul, investors are taking notice of the potential embedded in cultural tourism. Those at UNESCO and the Council of Europe are also taking notice of future opportunities for regional integration through cultural corridors.

emple of Artemis by John Valainis,  used by permission

Temple of Artemis by John Valainis, used by permission

Full Circle

Fairsted, the Olmsted home and headquarters of his prestigious landscape architecture firm, remains nestled near the Emerald Necklace in Brookline, Massachusetts. The relatively unimposing structure offers a contrast to his vast historical influence. The connectivity that Olmsted envisioned and implemented in Boston has since been echoed in green spaces and cultural corridors throughout the world. The Emerald Necklace is among the places where we can look to understand the importance not only of social and municipal engineering embedded in an aesthetically vibrant landscape, but also the contemporary cultural policies emanating from a variety of government agencies, including UNESCO and the Council of Europe. While the Olmsted name is rarely invoked in this regard, a close look at his work reveals a lasting legacy not only in the United States, but also on the global stage.

ABOUT THE RESEARCH

Sources for this article included Yosemite and the Mariposa Grove: A Preliminary Report by Frederick Law Olmsted (1865), several recent reports from the Council of Europe, documents available from the Ministry of Culture & Tourism in the Republic of Turkey, and the websites of organizations including the National Association for Olmsted Parks and the United Nations Educational, Scientific, and Cultural Organization (UNESCO).


LukeChristina Luke is a Senior Lecturer at Boston University with appointments in the Writing Program, the Department of Anthropology, and the Department of Archaeology. She is also Co-Director of the Central Lydia Archaeological Survey. Among her research interests are cultural policies that harness heritage landscapes to promote tourism development at local and regional levels, especially in the eastern Mediterranean and Latin America. She holds a Ph.D. degree from Cornell University. Email cluke@bu.edu

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The Historical Origins of Business Statistics and a Current Application in Lodging Forecasting

January 1st, 2013 in Business Practices, History, Hotels, Real Estate, Winter 2013 0 comments

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The Langham Hotel, Boston Photo by:  Creative Commons // Veroyama

By Barry A.N. Bloom

Academic journals often contain statistical information, and this is certainly true in the hospitality discipline. So it may be interesting for some readers to examine the nature of business statistics in general, review the contributions of a pioneer in the development of business statistics, and explain how some of these methods can be applied to the prediction of future performance in the lodging industry.

Roger Babson

Roger W. Babson is remembered today primarily as the benefactor of Babson College in Wellesley, Massachusetts. Few may realize that he was a well-known investor in the early twentieth century and the founder of Babson’s Statistical Organization, which served as a clearinghouse for information about investments and business conditions. After developing this firm and amassing a small fortune, Babson turned his efforts to offering advice through many other channels. He served for more than a decade as a weekly columnist for the Saturday Evening Post and published nearly 50 books.

One of Babson’s earliest and most renowned works, Business Barometers for Anticipating Conditions, was first published in 1909. Although written over a century ago, it expresses his vision of a world in which business statistics could chart a path to business success, and remains quite relevant today. In this book, he identified two general classes of business statistics, comparative statistics and fundamental statistics.
Babson defined ‘comparative statistics’ as those that are used in determining the current financial condition of a subject being reviewed and are useful for making buy, sell, or hold decisions for particular investment assets. In the case of the hospitality industry, this would be analysis based on standard financial statements (such as profit and loss statements) and other internal performance measures generated by the business itself (such as occupancy percentage or average daily rate).

Babson had a mixed opinion of comparative statistics, which he believed only measured surface conditions. He argued that such statistics were worthless for determining the general course of the stock market and inappropriate for investors seeking to sell at a profit, and were only acceptable for buy and hold investors. He believed that if general market conditions remained stable, comparative statistics might be useful in forecasting rises and declines in the market, but noted that the markets are far too unstable for such statistics to be used in this manner.
Babson defined ‘fundamental statistics’ as those related to the broader underlying conditions of a subject being studied. These included statistics in categories such as new construction and real estate, labor conditions, money conditions, and manufacturing.

Babson viewed fundamental statistics in a much more positive light, believing these contextual factors were critical to the ultimate success of individual companies. The astute reader will recognize that, although some of these measures have changed over time due to the growth and decline in specific industries, these closely mirror the statistical categories used in the reporting of economic conditions today. His studies in this area represent perhaps his greatest contributions to the business community.

Federal Reserve Bank of Boston

The Federal Reserve Bank of Boston (FRBB) is one of a dozen such institutions in the United States. It was established in 1916 and currently serves the First Federal Reserve District, an area that includes the six New England states of Connecticut (excluding Fairfield County), Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont.

The stated goal of the FRBB is to promote economic growth and stability. Due to its unique focus on New England, it publishes a wealth of statistical information regarding the financial health of the region. Its “Summary of National Economic Data” is based on information collected from a variety of federal agencies and updated almost daily. This offers a particularly interesting point of comparison to the fundamental statistical categories defined by Babson a century ago, as demonstrated in Exhibit 1.In addition to national data series, the Federal Reserve also publishes regional statistics that are even more closely aligned with the statistics preferred by Babson. These include additional categories such as business and consumer bankruptcy filings, merchandise exports, and state tax collections.

Roger Babson from Babson College Archives, used by permission

Roger Babson from Babson College Archives, used by permission

Application to Forecasting in the Lodging Industry Previous work by hospitality industry practitioners has identified and formalized a long-known relationship between Gross Domestic Product (GDP) and hotel room demand. Hospitality industry researchers have also studied the impact of macroeconomic variables on hospitality stock returns. As an example, Jeong-Gil Choi conducted an extensive study in 2003 regarding forecasting for the hotel industry. This attempted to develop a system that would identify early signals of recession or recovery based on 32 economic indicators.

Bloom Ex 1
The following analysis provides an example of how the system of business statistics pioneered by Roger Babson can be used to forecast the performance of lodging markets, in this case for the New England region. My study takes a different approach than typical academic articles, because it is designed to be understood and replicated by practitioners, as well as academics. It is also the first study to utilize data on a state-by-state basis.

Three scenarios were prepared for each of the six states in New England – Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont – in addition to the entire New England region and the United States as a whole. Regression analysis was performed to determine if ‘revenue per available room’ or REVPAR could be predicted using simple business statistics.

REVPAR is the most common performance metric in the hotel industry and may be calculated in two different ways. First, revenue from overnight guest rooms is divided by the number of rooms available during a given period. Available rooms are considered to be all guest rooms physically located within the hotel, including those that are temporarily unavailable for sale due to being out of service or under renovation. Second, the occupancy percentage of a hotel can be multiplied by the average daily rate of the hotel during a given period.

For those whose statistical knowledge may be a little rusty, regression utilizes an association between two variables to predict the value of one of the variables, which is called the dependent variable. In this manner, we can predict the outcome of a dependent variable from any number of regressor, or independent, variables. This may include linear regression for one independent variable along a line, or multiple regression for several independent variables within a multi-dimensional plane.

Simple data easily obtainable from public sources were utilized in this study. For all scenarios, REVPAR data was obtained from Smith Travel Research for the period 2001 to 2012 for the entire United States and each of the six states that comprise the New England region. The independent variables were ‘lagged’ by one year in order to determine how they impacted REVPAR in the following year. Lagging, or autoregressive regression, is a technique whereby data from a prior period is used to make predictions for a dependent variable in a future period.

For the first scenario, Gross Domestic Product (GDP) for the United States, New England, and each of the six states that comprise the New England region were obtained from the Bureau of Economic Analysis (BEA). For the second scenario, the Consumer Price Index (CPI) for the Boston area and the United States were obtained from the FRBB. For the third scenario, GDP data from the BEA was utilized along with Total Employment Data obtained from the FRBB for the United States and each of the six states that comprise the New England region.

Bloom Ex 2

Bloom Ex 3

 

As previously mentioned, there has been a noted relationship between GDP and hotel demand. However, this relationship does not address supply which, when taken together with demand, might provide insight into the cost of hotel rooms as expressed by the average daily rate (ADR). In order to address this, we have utilized REVPAR as the dependent variable and run two regressions using GDP and CPI as separate independent variables. The results are shown in Exhibit 2.These results indicate significant similarity between the use of GDP and CPI as predictors of REVPAR from 2001 to 2011. This is not particularly surprising given the close relationship between these two economic indices. The explanatory power of these relationships is quite high, with GDP or CPI explaining over 50% of the variance in REVPAR for Massachusetts, Maine, Vermont, the New England region combined, and the United States as a whole. Perhaps the most interesting findings in Exhibit 2 are the comparatively low relationships between REVPAR in Connecticut, New Hampshire, and Rhode Island versus their state GDPs. One could hypothesize this is due partly to the interwoven relationship between these states and their neighboring states, Massachusetts and New York, whereby the drivers of their economies may not be fully reflected in their own state data.

In an effort to make the model more robust, meaning to enhance its predictive ability, an additional regressor was added. In multiple regression models, care must be taken to ensure that the variables are not highly correlated with each other. Several other additional economic variables were tested, and Total Employment for each geographical area was identified as an appropriate variable. The results are shown in Exhibit 3.

It should be noted that the explanatory value (R2) increased significantly by the addition of Total Employment to the model. Interestingly, while GDP was the better predictor in the single-variable linear regression model, the combination of CPI and Total Employment is a better predictor when Total Employment is added. In the same manner, additional variables could be added to the model to make it even more robust in predictive value. The output from these regression models provides us with an equation that can be used for future predictions.
As an example, consider the regression analysis for Massachusetts. The model with the highest explanatory value as measured by R2 (CPI + Massachusetts Total Employment) could be used to predict REVPAR for Massachusetts using the derived calculation REVPAR = -240.76 + .491*(Boston CPI) + .065*(Massachusetts Total Employment). The CPI and Total Employment statistics at the end of a given year would be entered into the model to predict REVPAR for Massachusetts for the following year. A model such as this is not expected to be completely accurate, as it only explains 75.6% of the variance.

However, it might be a very good starting place in terms of a forecast, particularly a multi-year forecast based on economic data provided by outside agencies. A likely application at the property level might be to check an assumption of REVPAR growth being prepared as part of the annual budget process.

Conclusion

This article has provided some background about the history and importance of business statistics in the New England region, and identified potential uses for the data in analyzing and predicting future results for the lodging industry overall, as well as for specific applications. It has also explained a simple application of business statistics that derives from work originally conceived over a century ago, which is still useful today. Simple business statistics can be utilized by hotel operators as an additional tool for budgeting and forecasting.


BloomBarry A.N. Bloom, Ph.D. is an Associate Professor of the Practice in the School of Hospitality Administration at Boston University. He teaches courses in lodging operations and technology, asset management, franchising, and management contracts and negotiation. His academic research is focused on hospitality stock performance, hotel operating performance, and personal financial literacy. Prior to joining the faculty, Dr. Bloom spent over 25 years in the hotel investment industry, where he focused on hotel asset management with a number of leading firms including CNL Hotels & Resorts, Hyatt Hotels Corporation, and Tishman Hotel Corporation. Email banb@bu.edu