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Chapter 6 Understanding

the World of Hotels

Introduction to the World of Hospitality

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After Reading and Studying This Chapter, You Should Be Able to:

•Summarize information about important hotel guest segments

•Briefly describe different hotel categories, classified by location, service, price and ownership

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Hotel Industry Development

Industry trends:

• 1960s – new locations

• 1970s – intense competition

• 1980s – pampering guests

• 1990s – quality service, innovation, segmentation

• 2000s – mergers, acquisitions, etc.

Read more about trends on pp.148-150

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Hotel Guests

1. Corporate individuals

2. Corporate groups

3. Convention groups

4. Leisure travelers

5. Long-term stay guests (relocation guests)

6. Airline-related guests

7. Government and military travelers

8. Regional getaway guests

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Question

1. Which hotel facilities are necessary for corporate individuals?

2. Corporate groups?

3. Relocation guests?

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Guest Mix

Guest mix - variety of guests who stay in the hotel.

Business hotel guest mix: 50% corporate group guests 30% corporate individual 20% leisure travelers

Question: why do hotels need guest mix?

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Hotel Categories: Location

• Center-city hotels

• Resort hotels

• Highway hotels (motels)

• Airport hotels

• Suburban hotels

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Resorts

• A resort – a hotel located in a desirable vacation spot.

Many resorts are situated in the natural environment (beach, mountains, lakes, forest) and they offer fine dining, exceptional service and many amenities.

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Highway Hotels (Motels)

•A single building with connected rooms

•Doors facing a parking lot (common area)

•Always located close to highways

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Suburban Hotel

•Located in the suburban areas

•Usually smaller than center-city hotels

•Mostly chain affiliated

•Target market: business individuals & groups

•Full-service hotels

City center

Hotel location

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Ownership

1. Independently owned and operated

2. Independently owned but leased to an operator

3. Owned by a single organization or a group that has hired a hotel management company to operate the property

4. Owned and operated by a chain

5. Owned by an independent investor or group and operated by a chain

6. Owned by an individual or group and operated as a franchise of a chain

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Ownership

• Independent hotels

•Management company

•Chain hotels

•Franchise (franchisor & franchisee)

•Referral systems

Task: Find out what these terms mean on p. 164

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Ownership

• Independent hotels – not connected to any other properties.

• Management company – has a contract with hotel owners to operate the hotel.

• Chain hotels – a group of affiliated hotels.

• Franchise – the authorization granted by a hotel chain (franchisor) to an individual hotel (franchisee) to use the chain’s trademark, operating system, reservation system in exchange of revenue share plus fees.

• Referral systems – groups of independent hotels uniting for marketing purposes (e.g. The Leading Hotels of the World).

• A management contract is an agreement between a hotel owner and hotel management company under which, for a fee, the chain’s management company operates the independent hotel under the chain’s name.

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Price

•Limited service hotels (Economy / Budget)

•Mid price hotels (Full service / Limited Service)

•Luxury hotels (First class)

- Check how Marriott Hotels & Resorts divides the market on Exhibit 2 – Pg. 168.

- Do you know luxury brands of Hilton?

- Homework: find our price segmentation of Accor Hotels

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Other Hotel Types

•All-suite Hotels

•Conference/Convention Centers

•Timeshare Hotels

•Condominium Hotels

•Senior Housing

•Bed & Breakfast

•Guest Houses

•Camping

•Youth Hostels

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Conference Center Hotels

•Conference Center Hotels are the hotels with extensive meeting and conference facilities which main target market are convention groups and corporate group travellers.

Example: Orlando World Center Marriott •2000 guest rooms and suites • 92 meeting rooms • Largest meeting room capacity: Cypress Ballroom for

9480 people • 6 restaurants + food court and Starbucks

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Timeshare Condominiums

•Timeshare is a form of period-constrained (one or two weeks a year) property ownership often providing self catering facilities.

•Timeshare ownership allow travelers to stay at 5* resorts, luxury hotels, and resort condos without paying the usual price of a resort.

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Bed & Breakfast

•A Bed and Breakfast (B&B) is a type of boarding house typically operating out of a large single family residence.

•Guests are accommodated at night in private bedrooms and breakfast is served in the morning - either in the bedroom, a dining room or the host's kitchen.

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Guesthouses

•Guest house – a private home which is converted for guest accommodation.

•The owner usually lives in a separate area within the property and the guest house may serve as a form of lodging business.

•Similar to a bed and breakfast.

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Camping

•The visitor bring their own accommodation to the destination. In the form of tents, caravans, or trailer.

•Camping is often restricted by law to designated sites in order to prevent campers from damaging the environment.

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Youth Hostels

•Hostels provide accommodation where guests can rent a bed (sometimes a bunk bed) and share a common bathroom, kitchen, and lounge.

•Rooms can be mixed or single-sex, although private rooms are increasingly common in all types of hostels.

•Low priced

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Can you guess a hotel type?

Camping

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Can you guess a hotel type?

B&B or Guest House

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Can you guess a hotel type?

Resort / Timeshare Resort

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Can you guess a hotel type?

Conference Centre & Airport Hotel

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Can you guess a hotel type?

Senior Housing

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Can you guess a hotel type?

Motel

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Can you guess a hotel type?

Youth Hostel

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Questions to think about

1. What factors will be very important in the future for the accommodation sector?

2. What are the reasons for the popularity of budget hotels?

3. Have the Internet bookings changed the guests’ attitude toward their choice of hotel?

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Homework

• Read Chapters 4-6.

• Price segmentation of Accor Hotels.