Introduction to Hotel Management 3 credits Time:pm0200-0500, Friday Place:C325

Ch1 Lodging Industry Classification

SECTION1 Classified by Types of Service SECTION2 Classified by Target Market SECTION3 Classified by Ownership

SECTION1 Classified by Types of Service Full-Service Lodging Intermediate-Service Lodging Limited-Service Lodging

Full-Service Lodging Luxury and Upscale Services Provides by the Five Star Hotel Wide Public Area, Multiple Choices of Restaurant Executive Floor Provide higher standard facilities and extra services Provide Bar and free drink

Full-Service Lodging Two Important Characters Provide luxury facilities Provide customized services

Intermediate-Service Lodging Scale: 150~300Hotel Rooms Target Market: Domestic Mass Tourism Provide “good” services, but not “luxury” services

Limited-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 Chain 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 Hotel Enough 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 Emphasize cross-training employee Emphasize relax miliu Overcome low season and high season problem Emphasize local public relation

Timeshare Own one or several weeks of vacation right every year Consumption and Investment Exchange company: RCI, II Flexible Development of point system: Marriott Vacation Club International Hilton Grand Vacations Guest Room Design: Connecting Room High Service Standard: most customers are owners

SECTION3 Classified by Ownership Independent Hotel Management Contract Franchise Agreements Free Alliances

Independent Hotel Unique Structure of Ownership Strength: Concentrated power means efficient decision-making. Easy to merge corporate culture and organizational strategy. Weakness: Lacking of economy of scale to reduce cost. 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: Provide a way for hotel chains to expand by low -cost. Avoid HMC to take financial risk . Weakness: HMC receives limited financial return from increased hotel value. 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 Agreements Strength: Have lower cost to get a reservation system. Spend less money for marketing. Have the benefit of brand loyalty. Share the R&D product, innovation knowledge and mature training system. Weakness: Owner has to sacrifice some sovereignty to follow the rules and performance standards of the brand. 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. )

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