1. MARKETING THE INDUSTRY SEGMENTS 4.02 Explain the lodging industry.

2. Lodging: A place to sleep for one or more nights
Front of the house: Any area of the lodging property which may be used by the guest such as restaurants, meeting rooms, and workout facilities
Back of the house: Departments/areas not usually seen by the guest such as human resources and accounting

3. Lodging properties are classified by…
Price
Level of service
Type of guest
Amenities
Location*

4. Lodging properties Resort hotels Airport hotels Convention hotels
Extended stay hotels
Motels
Casino hotels
Luxury hotels
Vacation ownership/timeshare
All-suite hotels
Bed and Breakfast

5. Lodging properties Commercial or Transient Boutique hotels
Economy hotels

6. Resort hotels
Located in areas known for desirable weather, scenery, recreational activities
May be located near natural attractions
Many add recreational facilities
Some are only open during high season
Many offer package deals
A remote location is often part of the attraction
Originally catered to leisure travelers, but have expanded to include conferences/meetings
Average length of stay 4-7 days

7. Resort hotels (cont.)
Guests are “captured clients”; resort provides full complement of services
Staff has more direct contact with guests, thus must be well-trained staff
Promote repeat business and detailed knowledge of a guest’s preferences

8. Airport hotels
Room service and restaurant hours may be extended to accommodate travelers’ schedules
Convenience is major factor
Properties offer free shuttles to and from airport
Located in and around airports
Provide convenient lodging for guests with early flights or for those between connections
Most guests are business travelers; some leisure travelers (70:30 ratio)

9. Airport hotels
“Distressed” rooms are for passengers who are sent to a hotel for the night because their flight cannot get off the ground.
Busiest time of week is Monday-Friday
More availability on weekends; packages may be offered to attract guests during this time
Crew rooms are contracted to airlines for their pilots, flight attendants, etc.; airlines pay for rooms whether they are used or not.

10. Convention hotels Public areas large enough to accommodate crowds
Attendees usually dine at the hotel
Facilities designed to meet needs of groups holding meetings, trade shows, or large conferences
Attendees can come from a single state or from around the world
Large number of guest rooms, multiple meeting rooms, and banquet facilities

11. Convention hotels Services offered include: Airport shuttle
Room service
Business center
In-house laundry

12. Extended stay hotels Full kitchen facilities
Designed for guests staying for a long period of time
Guests may be business people staying in a city for an extended period of time or families or individuals who are relocating
Reduced rates offered based on length of stay
May provide stores, business centers, and recreational facilities

13. Motels Often several are grouped together off a highway exit
Parking located close to room
Entrance to room is from outside
Décor is casual
Rooms small but adequate
Facilities may be limited to pool and vending machines
Location convenient for highway traffic
Ratio of employees to guests is low

14. Casino hotels Adult and family entertainment provided
Trying to expand market segments to include families and conventions
Gaming areas for adults only
Programmed activities provided for children
Rooms have work space for conference attendees

15. Luxury hotels Services include: Charges highest prices
Concierge, valet, bellhops
Food & beverage outlets
Laundry service
Beauty salons
Health spas
Secretarial services
Ballroom
Charges highest prices
Guests expect a high level of service
Appeal to business and leisure guests

16. Vacation ownership/timeshare
Guests buy a unit for a set period of time each year
Time period usually broken down in terms of weeks
Vacationers contract at a certain rate for their property so they don’t worry about fluctuating prices
Accommodations are high quality
Owners may be able to swap vacation destinations with other timeshare owners so they can visit different destinations

17. All-suite hotels Public areas are minimal to provide extra suite space
Suites approximately 1½-2 times size of average hotel room
More space than typical hotel room
Additional space is lounge/living area and kitchen
More space at a lower cost than the high price of a suite in a full-service hotel

18. Bed and Breakfast
Prices and dwellings vary and reflect the distinctiveness of the region
“Homey”
Friendly atmosphere
Guests primarily leisure travelers
Rate usually includes lodging and breakfast
Alternative to traditional lodging facilities
Private homes offering a limited number of guest rooms
Owner lives in the home and is host/hostess to guests
Owner often only employee

19. Commercial or Transient
Average stay 2-3 nights
Business guests during the week and leisure guests on the weekends
Examples: Marriott, Sheraton, Doubletree

20. Boutique hotels Appeal to both leisure and business travelers
Properties of rooms
Usually located in major metropolitan areas
Highly personalized and high on technology

21. Economy hotels No meeting space or restaurant
May serve a continental breakfast
Usually very limited service
Appeal to travelers with budget constraints

22. Amenities: Gratis features that enhance a guest’s comfort or convenience; the higher the level of service, the more amenities that a guest expects.
Double sinks
Bathrobes
Coffee pots
Whirlpool tubs
Data ports
Pools
Microwaves
Shampoo/conditioner
Lotion

23. Factors that affect lodging rates
Perishability of rooms
Peak prices vs. off-peak prices

24. Perishability of rooms
Rooms are perishable products.
When rooms are not occupied on a particular night, there is no opportunity to make up for lost revenue.
After considering competition, costs, and profit goals, properties may offer special rates/packages to offset the chance of empty rooms.

25. Peak prices vs. off-peak prices
Demand for rooms affects prices.
During peak periods, guests are willing to pay more for rooms.
During off-peak periods, guests expect to pay less.
The process of varying rates to maximize profit is “yield management.”

26. Guest rates Rack rates Corporate rates Group rates Government rates
Senior citizen rates

27. Rack rates
Standard rates quoted to walk-in guests and general inquiries
Usually the highest rates charged for a specific room

28. Corporate rates
Rates given to business people that frequently stay at the property
Usually 10-15% lower than rack rates

29. Group rates
Available to large groups that book a minimum number of rooms
Group bookings are efficient for the hotel, and group sales tend to encourage repeat business

30. Government rates Offered to state or federal government employees
Based on the current daily allowance known as a “per diem”
Encourage repeat business with those qualified guests

31. Senior citizen rates
Discount rates are designed to match seniors’ limited income.
Senior citizens represent a sizeable market of travelers.
AARP: A nonprofit membership organization dedicated to focusing on the needs and interests of persons 50 years of age and older; many lodging properties offer special discounts to members.

32. Trends in the lodging industry
Senior market will continue to grow.
Security is an important issue.
Families are traveling together, creating a demand for a variety of amenities for different ages.
More travelers are using internet to make reservations.
Travelers are taking shorter trips more frequently, rather than extended trips, due to demands of work.
Business people expect rooms to be equipped for technology.
More women are traveling for business.

33. Marketing strategies in the lodging industry
Advertising
Personal selling
Sales promotion
Public relations/publicity

34. Advertising in the lodging industry
Specific advertising media can enhance the image and trustworthiness of a business.
Many national companies utilize television advertising to reach large audiences.
Properties are able to target specific groups through publications.

35. Personal selling in the lodging industry
Takes place on many levels (front desk, restaurants, housekeeping, etc.)
Personal contact provides immediate feedback and gives customers satisfaction from being able to talk directly to someone.
Knowledgeable sales people have the opportunity to build profitable relationships by greeting returning guests in a personal manner and by remembering guests’ specific preferences.

36. Sales promotion in the lodging industry
Coupons
Contests
Premiums
Added extras
Frequent-guest award programs

37. Frequent-guest award programs: A technique that awards free accommodations, upgrades, and other prizes to guests after they spend certain numbers of room nights with the lodging chain. This promotion promotes a long-term relationship with the guest.
Membership is usually free.
Guests receive priority check-in.
Points may be applied to other travel and tourism services; these partnerships enhance the benefits of membership.

38. Public relations/publicity
Requires planning and coordination in order to be effective
Examples: announcing openings of new properties; Marriott receiving the top hotel chain ranking in Business Week’s survey in 2003; “Conserving for Tomorrow” initiative at Holiday Inn