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Hotel Management
Introduction
What is Hospitality?
▪ The reception and entertainment of guests, visitors, or strangers at resorts, clubs, conventions, attractions, special events; and other services for travelers and tourist.
What Is Hospitality?
▪ Many peoples’ definition of hospitality extends only to restaurants and hotels
▪ In reality, it goes far beyond this and includes any organization that provides food, shelter and other services to people away from home
▪ When viewed in this light, the hospitality industry can be quite large and far reaching
▪ Also, the numerous career opportunities become readily apparent
Primary Sectors
▪ So, what are some of the primary sectors within the hospitality industry? They include:
▪ Lodging (not just limited to traditional hotels)
▪ Foodservice (not just limited to restaurants)
▪ Gaming operations
▪ Private clubs
▪ Theme parks
▪ Destination management companies
Primary Sectors (continued)
▪ Meetings and conventions (planning and operations)
▪ Managed park environments (natural)
▪ Resorts
▪ Senior living
Tourism
▪Tourist travel and the services connected with it
Hospitality IndustryHospitality Industry Tourism IndustryTourism Industry
Institutional/Institutional/Welfare CateringWelfare Cateringe.g. Hospital e.g. Hospital
CateringCatering
CommercialCommercialAccommodationAccommodationServicesServices
e.g. Hotels, e.g. Hotels, Guest Houses Guest Houses
Transportation servicesTransportation servicese.g. Car Rental, e.g. Car Rental,
AirlinesAirlines
The following diagram shows the relationship between the hospitality and tourism industry. Can you think of more services with examples to add to the diagram?
Hospitality Industry
▪ Accommodations– Hotels– Resorts– Motels– B&B
▪ Transportation– Airlines– Cruise Ships– Car rentals
▪ Food and Beverage
▪ Attractions– Theme parks– Zoos– National, state, and local parks
Two main business sectors in the hospitality industry:
• Accommodation – To provide accommodation (and usually food and drink) to people who for whatever reason are away from home
• Food and beverage – To provide food and beverage to local, commuting, transient customers and tourists
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
third largest retail industry following automotive & food storesnation’s largest service industryone of the nation’s largest employers
Tourism Industry
Hospitality Retail (Shopping) Stores
Transportation Services
Destination (Activity) Sites
Lodging is Part of Tourism Industry:Tourism Industry
Lodging Operation
F&B Operations
Tourism industry is
Figure 1.1: Segments in the Tourism Industry
Lodging/Accommodation
▪ To temporarily have a room in a hotel, motel, inn, bed & breakfast, or hostel.
There is no generic rule for classifying accommodation establishments globally. One method is to divide accommodation into two main groups:
Non-commercial Commercial
AccommodationAccommodation
Non-commercialNon-commercial CommercialCommercial
Private e.g. Private Home
e.g. Apartments
Private e.g. Private Home
e.g. Apartments
Non-profit e.g. Shelter
Non-profit e.g. Shelter
Institutional e.g. UniversityInstitutional
e.g. University
HotelsHotels
Figure 1: Accommodation structure
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
1900
Lodging is Part of Tourism Industry:A Brief History of Hotels
Figure 1.2 : Highlights in the modern history of the US hotel industry
1910
Fewer than 10,000 hotels
750,000 to 850,000 rooms
10,000 U.S. hotels
One million rooms
300,000 employees
Average size: 60-75 rooms
1920
Occupancy: 85%
Hotel construction reaches an all-time peak as thousands of rooms are added along the new state and federal highways
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
1930Occupancy: 65%
AHA’s Hotel Red Booklists 20,000 hotels
Lodging is Part of Tourism Industry:A Brief History of Hotels (continued….)
1940Occupancy: 64%
Average room rate: $3.21
1950Occupancy: 80%
Typical hotel: 17 rooms
Average room rate: $5.91
1960
Occupancy: 67%
$3 billion in sales
Typical hotel rooms: 2,400,450
Typical hotel: 39 rooms, independent and locally owned
Average room rate: $5.91
Figure 1.3 : Highlights in the modern history of the US hotel industry
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
Lodging is Part of Tourism Industry:A Brief History of Hotels (continued….)
1970
Occupancy: 65%
$8 billion in sales
Total hotel rooms: 1,627,473
Average room rate: $19.83
1980
Occupancy: 70%
$25.9 billion in sales
Total hotel rooms: 2,068,377
Average room rate: $45.44
Figure 1.4 : Highlights in the modern history of the US hotel industry
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
Lodging is Part of Tourism Industry:A Brief History of Hotels (continued…)
1990
2000Occupancy: 63%
$97 billion in sales
Occupancy: 64%
$60.7 billion in sales
Total hotel rooms: 3,065,685
45,020 properties
Average room rate: $58.70
Figure 1.5 : Highlights in the modern history of the US hotel industry
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
Overbuilt problem
Hoteliers should examine ways to reduce costs without impacting quality.An excessive emphasis on cutting service or product quality will ultimately result in reduced hotel revenue.
Managers should implement procedures to: a) reduce turnover levels, b) increase productivity levels, c) recruit from non-traditional employee labor markets.
Labor shortages
Current Issues confronting Hoteliers: Operating Issues
Cost containment
Increased competition
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
Various amenities (e.g., business centers) increase costs for hotel owners yet sometimes appeal to only a small segment of the hotel’s market.
Results in a more competitive selling environment for hoteliers (e.g., online room booking)
The more the number of brands increase, the harder consumers find it to differentiate between them.
Efforts to focus on a highly defined, smaller group of travelers.
Market segmentation is increasing
Current Issues confronting Hoteliers: Marketing Issues
Brands overlap
Increased sophistication of consumers
Increased number of amenities
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
Interactive reservation system- Allows potential guests to make reservations at preferred room rates in reduced timeGuestroom innovations- Two (or more) telephone lines enabling Internet access / interactive menu ordering for room service / electronic games and guestroom checkoutData mining technology- Analyzing guest- (and other) related data to make better marketing decisionsYield management- Matching guest demand with room rates
Recent technological innovations include:
Current Issues confronting Hoteliers: Technological Issues
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier
Pearson Prentice Hall Upper Saddle River, NJ 07458
“As goes the economy, so goes the lodging industry”
Impact of globalization on the lodging industry
Lodging industry is an integral part of the tourism industry- It is affected by the extent to which travelers, both within the country and worldwide travel
Facility Engineering & Maintenance
Economies of the world, the country, the state and the community play on the financial success of a lodging organization & the individual properties which comprise it.
Current Issues confronting Hoteliers: Economic Issues
OUTLOOK FOR HOSPITALITY
The outlook for the industry is very positive but there are several trends/factors that are affecting how the industry operates and the products and services that are offered to customers.
OUTLOOK FOR HOSPITALITY
The effects of September 11th and other recent events have resulted in:
▪ Travel restrictions
▪ Safety and security issues
▪ Cost of operations
▪ Government regulations
▪ Destinations that have been effected
Assignment- Due Tomorrow!
▪ Hotels and Wi-Fi article
▪ Some hotels charge $9.95-$19.95/ day
▪ $3.95 for more bandwidth
▪Wi-Fi cost the hotel around:
$3,000-$4,000/month for 100 megabits of data/sec