Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Chapter 1 – Introduction to Hotel Management Historical overview of the hotel industry Hotel classification system Trends that foster growth and employment in the hotel industry Career Development

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved 2005 Lodging Profile ip.asp ip.asp

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Founders of the Hotel Industry E. M. Statler First hotel was for Pan American Expo in 901 – “a simple structure of 5000 rooms to be torn down after the fair was over” Statler’s chain was sold to Hilton in 1954

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Founders cont’d. Conrad Hilton (after WWI ) in Cisco, TX Purchased Mobley Hotel, 1919 Purchased Chicago Hilton, Palmer House, Plaza, and Waldorf=Astoria hotels (after WWII) First major chain in 1954 when he purchased Statler Hotels: Marketing, reservations, quality of service Food and beverage, housekeeping, accounting Brands: Hilton Garden Inns Doubletree Embassy Suites Hampton Inns Harrison Conference Centers Homewood Suites by Hilton Red Lion Hotels and Inns Conrad International

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Founders cont’d. William Waldorf Astor and John Jacob Astor IV Cousins 1893 built hotel for their wealthy friends Moved from 34th to Park and Lexington between 49th and 50th Streets Waldorf Towers is a hotel within a hotel Note the “=” in name

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Founders cont’d. Kemmons Wilson (died in Jan. 2003) Family trip in 1952 Central reservation system HOLIDEX Ray Shultz Protégé of Kemmons Wilson Started Hampton Inn Limited service concept; cost consciousness

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Founders cont’d. J.W. Marriott Twin Bridges Marriott Motor Hotel Brands include: Courtyard Residence Inn Renaissance Hotels & Resorts Fairfield Inn Spring Hill Suites Towne Place Suites Marriott Hotels, Resorts, and Suites JW Marriott Hotels & Resorts

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Founders cont’d. Ernest Henderson and Robert Moore First Sheraton in 1937 was Stonehaven, Springfield, MA First hotel chain to be listed on NY Stock exchange 1968 acquired by ITT Corp. Owned by Starwood Hotels Brands Sheraton Westin Four Points St. Regis The Luxury Collection W Hotels

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Historical Developments 1. Atrium concept – used by Hyatt Regency in Atlanta “from Roof to Floor” in Limited-service hotels targeted business market on a limited budget – ex. Hampton Inn - Features: spacious comfortable room, limited food & beverage, first to offer 100% satisfaction guarantee 3. Technological Advances Refer to Figure 1-1 – p. 7 Recent additions to that list include: 1) applications of wireless technology for communication between departments; 2) guests can access and other documents or printing those documents as needed from “hot spots” – designated wireless transmission and reception areas in the hotel.

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Historical Developments cont’d. 4. Marketing emphasis – theme 1970’s- guest reservation/ single phone # 5. Total Quality Management (TQM)– a technique that helps managers look at process used to create products and services with a critical eye on improving those processes 1990’s (TQM); 2000’s – “quality assurance” and “service quality” Note: Chap. 11; analysis of delivery of service and product with decision making at front-line – empowerment

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Historical Developments cont’d. 6. Major Reorganization Passive losses on real estate no longer deductible Japanese wanted buy hotels -> value of hotels increased Recession increased and completed 7. Hotel investment New incremental income streams – who manages hotels vs. who owns the hotel? REIT (Real estate investment trusts) – pp. 8-9

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Historical Developments cont’d. 8. September 11, 2001 Attack on the U.S. Decrease in the number of people willing to fly yields a decrease in number of rooms rented; this resulted in a banding together of tourism partners Review marketing plans of post-9/11 corporate traveler. Need to review security at front line of hotel who is coming into the hotel Community responsibility for security activities Review liability implications to repair facilities and guest security for effects of terrorism

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Overview of the Hotel Industry Figure 1-2. This figure will anchor the discussion on the various ways the hotel industry can be discussed – p.11

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Overview of Lodging Industry cont’d. Types of lodging facilities – A. Hotels Marriott Wardman Park Hotel B. Motels C. All-Suites example - Embassy Suites D. Limited – Service Hotels E. Extended Stay Hotels – continued high occupancy example - Homewood Suites

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Overview of Lodging Industry cont’d. Market Orientation – types of properties and who they serve Residential Public dining Social activities Recreational facilities Commercial Computerized reservation systems Public dining Banquet service, lounge and entertainment areas Shuttle transportation to airports

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Lodging Overview cont’d. Sales Indicators : A. Occupancy percentage: # rooms sold # rooms available 50 = 50 % 100 B. Average Daily Rate: room revenue # rooms sold $4000_ = $80 50

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Lodging Overview Yield Percentage Facility’s success in selling its room inventory on a daily basis Rooms sold x ADR Rooms avail x Rack Rate 50 x $80 = $4, x $120 = $12,000 = 33.3 % Yield

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Lodging Overview cont’d. Revenue Per Available Room (RevPAR) Effectiveness of each room to produce a profit Room Revenue # rooms available $4000 = $ or Hotel occupancy % x ADR 50 % x $80 = $40

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Lodging Overview cont’d. How the industry talks about RevPAR:

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Lodging Overview cont’d. Levels of Service – Full-service – ex. J.W.Marriott reservations on-premise dining banquet meeting facilities recreation facilities All-Suites – ex. Embassy Suites at-home atmosphere separate living and sleeping areas or working areas kitchenette wet bars

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Lodging Overview cont’d. Limited Service ex. Hampton Inns continental breakfast sleeping room modest furniture Extended –Stay ex. Homewood Suites home-away-from-home fully equipped kitchen spacious bedroom living areas light breakfast or dinner

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Lodging Overview cont’d. Business Affiliations Chain affiliation provide operational and marketing services reservation systems advertising operations management development

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Lodging Overview cont’d. Referral Property with a Chain Assistance with management assistance with marketing, advertising and reservation Company-owned Property – hotel owned and operated by the chain company Management Contract Property – operated by a consulting company that provides operational and marketing expertise and a professional staff Independent property

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Brands Brands – allows a hotel company to create a concept in the mind of a consumer; a “mind-concept” Refer to pp for listings of hotel brands

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Independent Properties Independent Property – hotel not associated with a franchise Similar characteristics as found in Fig. 1-2 (I-IV) Challenges: Capital investment Consultation and assistance Marketing

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Trends That Foster Growth Leisure time 3-day weekends Paid vacations 40 hour work weeks Early retirement Me/pleasure concept Shift from thinking that recreation and leisure were a privilege for wealthy only Travel vs. isolated nature of many jobs Discretionary income - money remaining after necessities of life are paid increase because of two in the family women in the workforce not a constant to depend upon: Unemployment low interest rate make the purchase of high ticket items more (homes, cars, boats) more desirable and make travel less likely

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Trends That Foster Growth cont’d. Family size/household size Smaller families are more likely to have more discretionary income Business travel Oil/fuel oil prices/airfare Fear Business economy Conf. call, PicTel

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Trends That Foster Growth cont’d. Female business travel Increasing segment Amenities/safety Female travelers: online.com/News/PR2002_3rd/Aug02_WhatMatters.h tmlhttp:// online.com/News/PR2002_3rd/Aug02_WhatMatters.h tml Travel as an experience Education – to follow-up what they have learned Culture – visit art, theatre, music, opera, ballet, museums Sports and nature Personal development/hobbies

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Career Development 1. Establishing Career Goals Know where you want to go 2. Educational Preparation Associate Baccalaureate Distance Learning Life-long Learning 3.Work Experience

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Career Development cont’d. 4. Professional Memberships American Hotel & Lodging Association Certified Hotel Administrator (CHA) Certified Rooms Division Executive (CRDE) Hospitality Sales and Marketing Association International National Restaurant Association

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Career Development cont’d. Ports of entry Marketing and sales Front office Food and beverage Controller

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Researching Growth Areas in the Hospitality Industry Trends in the Lodging Industry by Pannell, Kerr, and Forster online.com/Trends/PKF/Trends/How ToOrder.html Use of the Internet Hotel On-line online.comhttp:// online.com Hotel Business Hotel Magazine / / Trade journals Hotels Hotel & Motel Management Lodging Hospitality