1. Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] It’s Tourism: Concepts and Practices John Walker Lodging and Restaurants Chapter 15

2. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Objectives After reading and studying this chapter, you should be able to: –Describe the characteristics and classifications of the lodging industry –Explain the importance of the lodging and restaurant sectors of the travel and tourism industry

3. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Objectives (cont’d.) –Outline the different types and characteristics of hotels, resorts, motels, and related accommodations –Describe the different types and characteristics of restaurants –List the classifications of restaurants

4. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Tourist travel –Implies at least one night away from home in hotels, resorts, motels, and related accommodations Travel and tourism as we know it today could not exist without them Much of travel hinges on the quality and availability of an area’s hotels Close to 16 million hotel and motel rooms worldwide, approximately 4 million in the U.S. Lodging

5. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Hotels support, participate in, and extend services to: –Trade and convention centers –Government centers –Entertainment centers –Theme parks Lodging (cont’d.)

6. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Accommodations offered are an integral part of the travel experience –Some want luxury hotels –Some seek out bed-and-breakfast inns –Some want convenience (e.g., close to the highway) Lodging (cont’d.)

7. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Growth of conventions and meetings –Prompted construction of many convention hotels built to serve convention groups Resort condominiums –Made possible because of rising middle- class incomes –Spawned business of vacation ownership and fractional ownership Lodging (cont’d.)

8. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Types of accommodations –Travelers have a variety of accommodations Hotel rooms with varying views Sleeping capsules in Tokyo Resorts and casinos Youth hostels Minimum motel accommodations Lodging (cont’d.)

9. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Smith Travel Research hotel types : –Luxury: Ritz-Carlton –Upper upscale: Embassy Suites –Upscale: Hilton Garden Inn –Midscale with food and beverage : Quality Inn –Midscale without food and beverage: Hampton Inn –Economy: Homestead Lodging (cont’d.)

10. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Resorts –Offer array of active and passive activities –More relaxing and pampered atmosphere –Kind of “captured clientele” Often difficult for to travel far from the resort –Mega resorts distinctions Immense size and variety of attractions Lodging (cont’d.)

11. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] –Gaming entertainment resorts Resort built around a casino –Island resorts Built only where superstructure and infrastructure can accommodate the resort –All-inclusives Meals and activities for a flat price –Airport hotels Most are within 15-minutes to the airport Lodging (cont’d.)

12. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Hotel chains –Mid-1900s: numerous hotels united to form chains Marriott International Hilton Sheraton Starwood –It is believed that a chain can operate more efficiently and less expensively Lodging (cont’d.)

13. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Hotel development and ownership –Franchises Properties use the same name and design but are operated and owned by different companies –Management contract Companies purchase a hotel or hotel chain as a part of their portfolio, but arrange a contract for it to be operated by a hotel company Lodging (cont’d.)

14. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Hotel ratings –Industry offers several types of lodging types and amenities –Mobil Travel Guide’s Star Awards system Ranks accommodations on a scale of 1 to 5 –American Automobile Association (AAA) Diamond ratings Lodging (cont’d.)

15. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Figure 15–1 AAA Hotel Diamond Rating Source: Courtesy of American Automobile Association

16. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Factors of pricing: –Hotel location and room location Direct impact on the price of the room –Season and length of stay Room rates also depend on the season May also have day-of-the-week fluctuations –Corporate, convention, and group rates Offer discounts –Taxes and service charges Lodging (cont’d.)

17. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Yield management –Follows economic concept of supply and demand The more demand, the higher the price –Made possible by computer systems –Critical component of revenue management –Benefits those who make reservations 90 days out with more attractive rates Lodging (cont’d.)

18. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Alternative forms of lodging and accommodations –Paradors: old buildings converted into hostels –Pensions: large home turned into a guest house –Resort condominiums: individually owned residential units Lodging (cont’d.)

19. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] –Vacation ownership: unit is purchased for certain blocks of time –Vacation club: travel-and-use product based on points –Youth hostels: provide basic facilities for overnight stays at rock bottom prices –Bed and breakfast inns: offer a comfortable room, a full breakfast, and a shared or private bathroom Lodging (cont’d.)

20. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Subgroupings: –Full service –Quick service –Fine dining –Ethnic –Theme –Celebrity Restaurants

21. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Independent restaurant: –Able to develop its own theme, menu, décor, and service Chain restaurant aspects are already decided Franchises: –Part of a large chain Original owner and/or company may own a number of restaurants Mostly in the quick-service restaurant segment Restaurants (cont’d.)

22. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Franchisees pay an initial fee and percentage of sales –Marketing, sales, advertising, and support –Benefits of a proven concept, assistance in location selection, training, manuals, systems for food preparation and operations, and promotional materials –Expensive: simple deli-like store can cost $15,000 Restaurants (cont’d.)

23. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Quick-service restaurants (QSRs) –Offer food served quickly in pleasant, clean spaces with few frills and limited service Full-service restaurant –Selection of menu items—a minimum of 12 entrées—are all cooked to order –Generally offer a high level of service Restaurants (cont’d.)

24. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Fine dining restaurants –Luxury end of the full-service segment –Charge higher prices Increased costs associated with upscale locations, decorations, and higher food and labor costs Restaurants (cont’d.)

25. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Hamburgers and pizza –Hamburger is the most popular and frequently ordered restaurant food item Popularized by Ray Kroc McDonalds franchise Chicken and steak –Popular and reasonably priced Provide an alternative to hamburgers and pizza Restaurants (cont’d.)

26. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Seafood/fish –Increased in popularity the past few years Health conscious public Family restaurants –Evolution is patterned after the “coffee style” of restaurant –Largely individually or family operated –Most are informal Restaurants (cont’d.)

27. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Ethnic restaurants –Most are independently owned and operated –Surfaced to cater to the taste of immigrant groups Casual dining –Includes restaurants with several characteristics (e.g., chain or independent, ethnic, or theme) Restaurants (cont’d.)

28. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Theme restaurants –Many combine sophistication with a specialty –Generally serve a limited menu –Based on a concept (e.g., times of the past, dinner house, etc.) Restaurants (cont’d.)

29. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Celebrity restaurants –Owned or partially owned by a celebrity –Gaining popularity Cost –Easy to set up if owners have a few thousand dollars and are prepared to work –Best for prospective restaurant owners to do a business plan Restaurants (cont’d.)

30. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] A business plan details: –The concept –Who the guests will be –Number of meals served each meal period Projected income statement: –Expenses are deducted –Controllable costs include salaries, wages, benefits, direct operating costs, etc. Restaurants (cont’d.)

31. It’s Tourism: Concepts and Practices John Walker Copyright ©2011 by Pearson Education, Inc. publishing as Pearson [imprint] Figure 15–2 An Income Statement for a Restaurant Source: Walker, John R., Introduction to Hospitality Management, 3rd, © 2010. Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.