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A Consumer Service in Interwar Britain: The Hotel Trade, 1924–1938

  • Rex Pope (a1)
Abstract

An examination of the fortunes of three hotel groups in the 1920s and 1930s suggests that the collapse of international demand and the growth of a middle-class motorized trade were the major influences on differential performance. While trading difficulties led to an effort to exit from unprofitable outlets or to rationalize supplies and services, opportunities for economy were restricted by customers' rising expectations of facilities and the need to protect a preeminent position in the market. Company organization appears to have contributed little, with the best performance achieved by the group with the smallest individual units and the least opportunity for structural specialization or economies.

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1 Alford, B. W. E., Britain in the World Economy since 1880 (London, 1996), 106–68; Alford, B. W. E., Depression and Recovery? British Economic Growth, 1918–1939 (London, 1972); Aldcroft, Derek H., The British Economy, vol. 1, The Years of Turmoil, 1920–51 (Brighton, U.K., 1986). 4859; Dowie, John A., “Growth in the Inter-war Period: Some More Arithmetic,” Economic History Review, 2nd series (1968): 93112; Bowden, Sue and Offer, Avner, “Household Appliances and the Use of Time: The United States and Britain since the 1920s,” Economic History Review, 2nd series, 47 (1994): 725–48; Fine, Ben, “Household Appliances and the Use of Time: The United States and Britain since the 1920s: A Comment,” Economic History Review, 2nd series, 52 (1999): 552–62; Bowden, Sue and Offer, Avner, “Household Appliances and ‘Systems of Provision’; A Reply,” Economic History Review 52 (1999): 563–7; Lee, Clive, “The Service Industries,” in Floud, Roderick and McCloskey, Donald, eds., Economic History of Britain since 1700, vol. 2, 1860–1939 (Cambridge, U.K., 1994), 117–44; Millward, Robert, “The U.K. Service Sector, Productivity Change and the Recession in Long-term Perspective,” Service Industries Journal 8 (1988): 263–76.

2 Lee, “The Service Industries,” 139–40; Jones, Stephen G., Workers at Play (London, 1986), 54; Stone, Richard and Rowe, D. A., The Measurement of Consumers' Expenditure and Behaviour in the United Kingdom, 1920–1938 (Cambridge, U.K., 1966), 82.

3 Marriner, Sheila, “Company Financial Statements as Source Materials for Business Historians,” Business History Review 22 (1980): 203–35; James Foreman Peck, “Industry and Industrial Organisation in the Inter-war Years,” in Floud and McCloskey, Economic History, 391.

4 Hotel Review 37 (April 1933).

5 Chapman, Agatha L. and Knight, Rose, Wages and Salaries in the United Kingdom, 1920–1938 (Cambridge, U.K., 1953), 210–1; Ministry of Labor Gazette 32 (Jan. 1924); 47 (Jan. 1939).

6 Jones, Workers at Play, 42.

7 Hotel Review 11 (Dec. 1919); Trast Houses Ltd. (Companies Register 76230), balance sheet, 1919–20; directors' report, 1903.

8 Trust Houses Ltd., balance sheet and directors' report, 1937–38.

9 RAC Guide and Handbook, 1932–33 (London, 1932).

10 Denby, Elaine, Grand Hotels (London, 1998), 143–5, 236.

11 Savoy Hotel Ltd. (Companies Register 29022), balance sheet, 1920, 1938; Hotel Review 35 (Mav 1932).

12 P.R.O. RAIL 418/26: minutes of LMSR Hotel and Catering Committee, 28 May 1924; RAIL 418/29; minutes of LMSR Hotel and Catering Committee, 14 Dec. 1932.

13 P.R.O. AN 109/308, Gleneagles papers; P.R.O. RAIL 424/14: LMSR chairman's correspondence on hotel and dining-car services, controllers working account, 1938; RAC Guide and Handbook, 1932-33.

14 See Walton, John K., The Blackpool Landlady (Manchester, 1978).

15 Royal Commission on Licensing (England and Wales), Report, cmd. 3988 (1931), 58.

16 Hotel Review 21 (May 1925); 27 (Feb. 1927); 33 (March 1931).

17 Alderoft, Years of Turmoil, 48–9; Dowie, “Growth”; Lee, “Service Industries”; Floud and McCloskey, Economic History, 126.

18 Stone and Rowe, Consumers' Expenditure, 107.

19 Chapman and Knight, Wages and Salaries, 26–30; Burnett, John, A History of the Cost of Living (Harmondsworth, 1969), 311.

20 Chapman and Knight, Wages and Salaries, 18–9, 104, 154, 201–2; Burnett, Cost of Living, 297, 300–1.

21 Chapman and Knight, Wages and Salaries, 18–9.

22 Stone and Rowe, Consumers' Expenditure, 92.

23 Ministry of Labour Gazette 48 (Dec. 1940): 300–5.

24 Massey, Philip, “The Expenditure of 1,360 British Middle-Class Households in 1938-39Journal of the Royal Statistical Society 150 (1942): 159–96.

25 Hotel Review 30 (November 1929).

26 P.R.O. RAIL 418/27: minutes of LMSR Hotel and Catering Committee, 14 Dec. 1927.

27 Ibid., 25 May 1927: Hotel Review 27 (Jan, 1928).

28 Hotel Review 37 (July 1933); 45 (May 1937); 46 (July 1937).

29 Trust Houses Ltd., balance sheets and directors' reports, 1917–18, 1920–21 to 1929–30; Hotel Review 12 (Feb. 1920); 13 (June 1921). The limited dividend on ordinary shares was unusual but seems to have been a reflection of the moral-improvement drive behind the original Trust House movement.

30 Trust Houses Ltd., balance sheets and directors' reports, 1930–31 to 1932–33.

31 ROI and ROCE are judged against “safe” alternative uses of investment or capital such as consols (long-term government bonds). A healthy return is one where the ROI or ROCE is higher than that on the safe investment by a margin judged sufficient to compensate for the risk involved in the business.

32 Trust Houses Ltd., balance sheets and directors' reports, 1923–24, 1933–34 to 1938–39.

33 Ibid., 1931-32; Hotel Review 36 (July 1932); 42 (Sept. 1935).

34 Priestley, J. B., English Journey, first published 1934 (Harmondsworth, 1977 ed.), 372.

35 Hotel Review 17 (May 1923); 21 (April 1925); 33 (April 1931); 41 (April 1935).

36 Savoy Hotel Ltd., directors' report, 1925; Hotel Review 21 (April 1925); 23 (April 1926).

37 Savoy Hotel Ltd., directors' reports, 1931–38; Hotel Review 31 (April 1930); 35 (May 1932); 45 (May 1937); 47 (April 1938); 49 (May 1939).

38 Hotel Review 35 (May 1932); 37 (May 1933); 39 (May 1934). Gordon Hotels experienced a net loss in each of the four years from 1931 to 1934.

39 Savoy Hotel Ltd., balance sheets and directors' reports, 1924-39; Hotel Review 35 (May 1932); 37 (May 1933); 39 (June 1934); Times Company meeting report, Savoy Hotel Ltd. 1938, 14 April 1939.

40 Savoy Hotel Ltd., directors' reports, 1933–38; Hotel Review 48 (Oct. 1938); Times Company meeting report, Savoy Hotel Ltd. 1938, 14 April 1939; Stone and Rowe, Consumers' Expenditure, 107.

41 Hotel Review 21 (Jan. 1925).

42 Savoy Hotel Ltd., directors' report, 1931.

43 P.R.O. RAIL 424/14: statement by Arthur Towle on purchasing for hotels, January 1932; Cutbush, Patrick, “Planning the Bedrooms,” Hotel Review 29 (Jan. 1929): 4952.

44 Munby, Denys L. and Watson, A. H., eds., Inland Transport Statistics, Great Britain, 1900-1970 (Oxford, 1978), 100.

45 P.R.O. RAIL 418/27, 418/28, 418/29: minutes of LMSR Hotel and Catering Committee, 25 Feb. 1923, 27 July 1927, 15 May 1928, 22 May 1929, 4 Aug. 1929, 29 Oct. 1930.

46 P.R.O. RAIL 418/26, 418/29, 418/30: minutes of LMSR Hotel and Catering Committee, 28 Nov. 1923, 17 Dec. 1930, 26 July 1933, 25 Jan. 1937.

47 P.R.O. RAIL 418/27, 418/28: minutes of LMSR Hotel and Catering Committee, 23 March 1927, 22 Feb. 1928, 20 March 1929; P.R.O. RAIL 424/14: LMSR chairman's correspondence on hotel and dining-car services, A. E. Towle to W. K. Wallace, 21 July 1932; controller's working accounts, 1936–38.

48 P.R.O. RAIL 424/14: Scottish hotels: receipts, expenses, profits, 1923–29 (3 May 1930); Scottish hotels, refreshment rooms, and station kiosks—working accounts for 1932 and 1933 (3 March 1934); controllers working accounts, 1936–38 (March 1939).

49 P.R.O. RAIL 418/27: minutes of LMSR Hotel and Catering Committee, 23 March 1927, 29 March 1933; RAIL 424/14: controllers working accounts, 1929–1938.

50 RAC Guide and Handbook, 1932–33, 1937–38; P.R.O. RAIL 424/14: controllers working accounts, 1935–38.

51 P.R.O. RAIL 418/28–30: minutes of LMSR Hotel and Catering Committee, 22 Feb. 1928, 19 Dec. 1928, 30.4.30, 29.9.31, 21.3.34, 19.12.34, 24.11.34.

52 P.R.O. RAIL 424/14: statement by Arthur Towle.

53 Stone and Rowe, Consumers' Expenditure, 92; Richardson, D. J., “J. Lyons and Co. Ltd.: Caterers and Food Manufacturers, 1894 to 1939,” in Oddy, Derek J. and Miller, Derek, eds., The Making of Modem British Diet (London, 1976), 161–72.

54 P.R.O. RAIL 424/14: E. Taylor to W. V. Wood, 21 June 1933; AN109/280: Felix Hotel, receipts and expenditure, 1923–42; AN 109/497: Sandringham Hotel, receipts, expenditure, profit/loss, 1923–38.

55 Hotel Review 12–50 (1920–1939), passim.

56 Chapman and Knight, Wages and Salaries, 210–1.

57 RAC Guide and Handbook, 1932–33, 1937–38.

58 Chandler, Alfred D. Jr, “Organizational Capabilities and the Economic History of the Industrial Enterprise,” Journal of Economic Perspectives 6 (Summer 1992): 79100.

59 Hilton, Conrad, Be My Guest (New York, 1994 ed.), 153–93; Lee, Daniel R., “How They Started: The Growth of Four Hotel Giants,” Cornell Hotel and Restaurant Administration Quarterly 26 (May 1985): 2232; Hotel Review 41 (March 1935); 42 (August 1935); 44 (August 1936).

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Business History Review
  • ISSN: 0007-6805
  • EISSN: 2044-768X
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