Lao PDR is selected as the World Best Tourism Destination for 2013 by European
Council on Tourism and Trade. Enriched with natural and cultural spots under the
slogan of “Simple Beautiful”, Lao PDR attracted more than 3.2 million visitors in 2012
or a half of its population, which has increased by over 3-folds as compared to 2005.
This achievement suggests that the boom in hotel industry will be continuing in the
following years. This paper aims to review the historical development and to examine
the service quality management in hotel business in Lao PDR. The study finds that
the recent development of hotel business in Lao PDR can be devided into three phases
as of Prior to 1986, 1987 to 1999, and from 2000 until the present. About 40% of hotels
in the country concentrates in the Vientiane Capital. The birth rate is especially high
in recent years. Domestic private firms still dominate the majority of the total,
whereas foreign investment and joint venture show a fast growing