Introduction to Hotel Introduction to Hotel ManagementManagement

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Ch1 Lodging Industry Classification

SECTION1 Classified by Types of Service

SECTION2 Classified by Target Market

SECTION3 Classified by Ownership

SECTION1SECTION1 Classified by Classified by Types of ServiceTypes of Service

Full-Service Lodging

Intermediate-Service Lodging

Limited-Service Lodging

Full-Service LodgingFull-Service LodgingLuxury and Upscale

Services Provides by the Five Star Hotel

Wide Public Area, Multiple Choices of Restaurant

Executive Floor

1.Provide higher standard facilities and extra services

2.Provide Bar and free drink

Full-Service LodgingFull-Service LodgingTwo Important Characters

1.Provide luxury facilities

2.Provide customized services

Intermediate-Service LodgingIntermediate-Service Lodging

Scale: 150~300Hotel Rooms

Target Market: Domestic Mass Tourism

Provide “good” services, but not “luxury”

services

Limited-Service LodgingLimited-Service Lodging

Clean, Cheap, Comfortable

Guest Rooms: Satisfied the basic need of customers

Not Provided: Baggage Service, Banquet Hall, Business Center, Leisure Facilities

Limited beverage services

Example: JingJiang Star Hotel Example: JingJiang Star Hotel Chain in ChinaChain in China

Section2 Classified by Target Market

Commercial Hotel

Convention Hotel

Casino Hotel

Airport Hotel

Motel

Residential Hotel

Resort

Time-share

Others

Commercial Hotel

In the century of railroad, its location is usually near the railroad station.

Car & Highway, MRT

Right Now, most located at city center or business district.

Major customers are business travellers.

Package tourists, individual tourists and convention tourists are also target market.

For Example: Tainan’s Cambridge Hotel

Convention Hotel

More than 40% international conferences are held in hotel (ICCA, 2012)

Successful tourist destination is the necessary condition for the success of the MICE industry and convention hotel.(Amy Chan, 2009)

Convention city in Asia: Singapore, Kuala Lumpur, Hong Kong, Bangkok

Meeting + Tourism = Incentive tourism

Convention HotelEnough Hotel Rooms (Scale)

Exhibition Hall and Banquet Hall are necessary.

Qualified Conference Rooms and Facilities(video conference, wireless internet, translation equipment, and fax)

Entertainment Facilities(golf course, swimming pool, Spa)

Services of VIP and the accompany person

Need of Disables and Minority People

Experienced Hospitality and Critical Service Behaviors

Casino Hotels

Casino is the main body, and hotel is the

sideshow.

Keep the customers stay at the casino.

Hotel is luxury, but is not expensive.

Taiwan and Singapore both emphasize complex

development as the policy. (hotel, casino, golf

course, shopping mall, stadium )

Casino Hotels

Provide luxury facilities and man-made theme.

Emphasize customer satisfaction, but not

occupation rate and Revpar.

Provide large scale of hotel rooms (more than

4000 is not unusual).

Held international entertainment events to

attract customers.

Airport Hotel

Lacation: near by the airport

Target Market: Transfer traveller, business traveller, crews of airlines company

Facilities: emphasize leisure facilities

Operation: 24 hours services (at least beverage service)

Examples: Novotel Taoyuan (China airlines ), Evergreen Taoyuan (Evergreen airlines)

Motels

Born for the traveller in the car and highway century

Mainstream: cheap price and limited services

However, Taiwan has some luxury motels in urban area.(swimming pool, luxury bathtub)

Residential Hotel

“Home” for business or vacation travellers

Guest Room Design: Kitchen, Living Room and Bed Room

Easy to be transformed into apartment or office

Gradually replaced by rented apartment and full-serviced hotel

Resort

Location: natural or man-made landscape

Facility: self-sustained, different kinds of leisure facilities for all age groups

Operation

1.Emphasize cross-training employee

2.Emphasize relax miliu

3.Overcome low season and high season problem

4.Emphasize local public relation

TimeshareOwn one or several weeks of vacation right every year

Consumption and Investment

Exchange company: RCI, II

Flexible Development of point system:

1.Marriott Vacation Club International

2.Hilton Grand Vacations

Guest Room Design: Connecting Room

High Service Standard: most customers are owners

SECTION3 Classified by OwnershipSECTION3 Classified by Ownership

Independent Hotel

Management Contract

Franchise Agreements

Free Alliances

Independent Hotel

Unique Structure of Ownership

Strength:

1.Concentrated power means efficient decision-making.

2.Easy to merge corporate culture and organizational strategy.

Weakness:

1.Lacking of economy of scale to reduce cost.

2.Lacking of brand to establish customer’s loyality.

Independent Hotel

Tempus Hotel (Taichung)

Han-Hsien International Hotel (Kaohsiung)

Santos Hotel (Taipei)

Management Contract

Owner + Hotel Management Company(HMC)

HMC provides development and management knowledge.

Owner monitors the hotel operation by controlling human resource and accounting departments.

Management Contract

Owner + Hotel Management Company(HMC)

Taiwan Sugar Company + Evergreen (HMC)

Ta-yi Group + Landis (HMC)

Management Contract

Strength:

1.Provide a way for hotel chains to expand by low -cost.

2.Avoid HMC to take financial risk .

Weakness:

1.HMC receives limited financial return from increased hotel value.

2.Change of owners usually cause the failure of management contract.

Franchise Agreements

Develop operational standard, job breakdown and SOP

Strong Brand and Reputation

Sharing reservation system, purchasing power, marketing activities and management knowledge

Franchise Agreements

Brand v.s Hotel Chains

International Brand:

Sheraton, Hilton, Marriott, Hyatt, Westin,

Intercontinental, Four Seasons, Novotel

Domestic Brand:

Landis, Evergreen, Howard, Formosa

International, Royal, Chinatrust

Franchise AgreementsStrength:

1. Have lower cost to get a reservation system.

2. Spend less money for marketing.

3. Have the benefit of brand loyalty.

4. Share the R&D product, innovation knowledge and mature training system.

Weakness:

1. Owner has to sacrifice some sovereignty to follow the rules and performance standards of the brand.

2. Owner has to pay financial cost to join and stay in the hotel chains.

Free Alliances

Unify some independent hotels to build a new union.

Strategic Alliances

Jointed Marketing

Introduce guests to partner hotels

Opportunity to increase purchasing power and lower purchasing cost

Hotel + B&B + Hot Spring Resort

(for example: Taiwan’s Backpacker Inc. )