THE HOSPITALITY INDUSTRY

• the friendly and generous reception and entertainment of guests, visitors, or strangers.

• refers to the relationship between a guest and a host, wherein the host receives the guest with
goodwill, including the reception and entertainment of guests, visitors, or stranger. (Wikipedia)

• Hospitality is the cordial and generous reception and entertainment of guests or strangers,
either socially or commercially.

• The Hospitality Industry is comprised of those businesses which practice the act of being
hospitable; they are characterized by generosity and friendliness to guests

Hotelier- a person who owns or manages a hotel

Characteristics of the Hospitality Industry

1.Seasonality

2. Occupancy levels

3. Location

4. Different grading system

5. Property Mix

CHARACTERISTICS OF SEASONALITY

• Seasonality causes the fluctuation in tourists and visitor numbers to a destination.

• Therefore, some destinations at certain times have more tourists and visitors than they are
able to accommodate, while at other times, there are too few tourists and visitors to the region

•.The accommodation product is usually subject to specific periods of demand.

Catergoized as:

1. Low season

2. Shoulder

3. High Season

4. Peak of peak

• To address its effects, some strategies used are:

1. Pricing - such as seasonal price variation; pricing to attract a target market;

2. Diversifying the attraction – e.g. introduction of special events and development of incentives
for a particular target market;

3. Market diversification – e.g. target different markets for different seasons;

4. Facilitation by the state (government or tourism agencies). Ex. Singapore F1

OCCUPANCY LEVELS

9/9/2019• The number of rooms or beds that are occupied at any time is a good indicator of
how an individual hotel is doing.

• This is known as the occupancy level and may be expressed as an annual average.

• Demand for rooms is spread across seasons; accommodations is a highly perishable product
that cannot be stored or sold later.
Room occupancy levels VS. bed occupancy levels.

• For example, a hotel might have 10 letting bedrooms, each containing 2 beds. If it fills up with
10 single business people, all the rooms will be taken - 100% room occupancy.

• But because only one bed in each room has been occupied, bed occupancy is only 50%.

LOCATION

• Guests come to experience the hotel location. Where a hotel is located is going to be the most
important factor in attracting guests to the property.

• Determines appeal and accessibility of properties

THE GRADING SYSTEM

• The rating given a property enhances the image and quality of the establishment.

PROPERT MIX

• From a complex business venture of a luxury full service property to basic hostel
accommodation.

• Prices charged to guests is relative to the value provided.

FIXED COST

• Accommodations may come with a high fixed cost.

• Owners/managers seek to optimize occupancy levels to offset costs.

Subject to regulatory codes and laws:

1. Tourism Legislation

2. Food safety

3. Training of skilled staff

4. Building codes

5. Zoning

HISTORY OF LODGING

Hospitality

• From the French word “hospice” – to provide for the weary – take care of those traveling

Early Hospitality

• Greek/Roman culture – Noted as early as 40 BC –

• Social and religious purposes

EARLY DAYS

• Roman businessmen traveled

• Romans were the first pleasure travelers

• After the fall of Roman empire, public hospitality fell to religious orders

MEDIEVAL PERIOD

• English travelers
• Inns were actually private homes

• Nobility stayed in monasteries

•Stagecoach became favored transportation

COLONIAL PERIOD

• Public coach – Put into effect around 1650

• Coach inns – Built along routes

• Inns – A sleeping accommodations (a facility in which food and drink were served and a
shelter for both the drivers and horses)

RENAISSANCE PERIOD(16th Century)

• High demand for inns and taverns

• 1st hotel - Hotel de Henry IV 1788 – built at cost of $17,500 – 60 beds

The French Revolution

• Auguste Escoffier— Changed the course of culinary history

– brigade system

• Marcel Boulanger – “father of modern restaurant” – called soup he sold “restorantes”

• Revolution caused some of the chefs to come to the New World

THE NEW WORLD (18th & Early 20th Century)

• Introduction of railroads

• Depot hotels – Began to arise in the early 1800s. Most cases hotels were located in train
stations.

• Transportation and Lodging could not be separated

• Thomas Cook — Father of Tourism (1841)

—An English man considered as the 1st travel agent taking groups of North
Americans in 1856 to hotels on his “Cook’s Tour of Europe”

• Cesar Ritz (1889) – Famous Swiss hotelier – Manager of the Savoy in London

• Tremont Hotel – Opened in Boston in 19th century – 1st luxury hotel

• Spas and Resorts Spa, which are mineral springs or pools are believed to be medicinal or
healthful, have been tourist sites since Roman days.The advent of trains caused beautiful resorts.
The most famous spa in the 1830s was Saratoga Springs, New York.Spas at Baden, Germany;
Marienbad, Bohemia; and Vichy, France, which has been popular for centuries, became more
accessible to the public via rai

• Ellsworth Milton Statler – Opened his 1st hotel in Buffalo, New York in 1907

• Conrad Hilton – “King of Innkeepers” – Opened his 1st hotel in Texas, the Mobley in 1919

• Dallas Hilton (1925) – Hilton bought the Statler Chain in 1954

Advent of Air Travel (The 20th Century)

• Air Travel – It was made available to masses

The Wright Brothers

• Conventions and Conferences – Became an integral part of successful of commerce

• Business traveler became the most important lodging guests

HOTEL ACCOMMODATION RATING SYSTEMS

• The grouping together of hotels providing a given range of services and facilities is an inexact
science.
• The most common classification system in use is by way of assigning “stars”. The higher or
the more number of stars assigned to the hotel property, the more it is perceived as either
“more luxurious” or well appointed.

A Popular Classification System

Official Hotel and Resort Guide (OHRG)

Widely used by travel professionals , this classification system rating is deemed as comparable
globally, making it an indispensable tool in the travel trade.

• Such a classification system combines two elements:

1. Quality of guest accommodations – room size, quality of furnishings

2. Extent of hotel facilities– number and size of public rooms and meeting facilities.

• Ten (10) Quality levels are used as reference:

3 for Deluxe, 4 for First Class, and 3 for Tourist Class

3 CATEGORIES FOR DELUXE ACCOMMODATIONS

1. Super Deluxe – An exclusive and expensive luxury hotel, often palatial, offering the highest
standards of service, accommodations and facilities. Elegant and luxurious public rooms. A
prestigious address. Establishments that fall under this category are usually the world’s top
hotels.

Ex. THE RITZ (favorite address of Princess Diana when in Paris)

2. Deluxe – An outstanding property offering many of the features of the Super Deluxe. May be
less grand and offer more reasonable rates than the Super Deluxe properties, yet in many
instances may be just as satisfactory. Safe to recommend to most discriminating clients.

Ex. The Peninsula in Hongkong

3. Moderate Deluxe — Basically a Deluxe hotel but with qualifications. In some cases, the hotel
may be a chain of a well established brand name, depending heavily on reputation. Or some
accommodations or public areas may not be up to Deluxe standards. If modern, it may be heavily
marketed to business clients, with fine accommodations and public rooms offering Deluxe
standards in comfort, but lacking in atmosphere or personal service.

Ex. The Intercontinental Manila

4 CATEGORIES FOR FIRST CLASS HOTELS

1. Superior First Class— Above average, it can be an exceptionally well maintained older hotel,
more often a superior modern hotel designed for a 1st class market, with outstanding features.
Accommodations and public areas are tastefully furnished and very comfortable, providing good
value. May appeal to the average clientele but will also please the discriminating ones.

Ex. The Marco Polo Hongkong

2. First Class– An average, comfortable hotel with standardized rooms, amenities and public
areas. Dependable, but nothing special. May have a superior executive level or wing. May be
safely recommended to average clients not expecting Deluxe facilities or special services. Should
also be satisfactory for groups.

Ex. The Marco Polo Gateway Hongkong

3. Limited Service First Class – A property offering full first class accommodations but limited
public areas, food service and facilities. Usually moderate in size, they may offer complimentary
breakfast or evening cocktails at the lobby or in a small, informal restaurant. Geared to the
individual business/pleasure traveller.

Ex. The Linden Suites

4. Moderate First Class– Basically a First Class establishment, but slightly below average.
Generally has comfortable, simple accommodations and public areas, though not always kept to
standards. May be lacking in some features (e.g. a restaurant). Some of the rooms or public
areas may tend to be small and functional. Usually suitable for cost conscious clients , but should
not be for those who are fussy or prone to complaints.

3 CATEGORIES FOR TOURIST CLASS HOTELS

1. Superior Tourist Class– Primarily a budget property with mostly well kept, functional
accommodations, some up to First Class standards. Public areas may be limited or even non-
existent. Often just a place to sleep, it may have some charming, intimate or convenient
features. Offers good value, its market are the budget travellers (even some of the most
discriminating ones).

Ex. Express by Holiday Inn in HKG

2. Tourist Class— Strictly a budget operation with some facilities or features of Superior Tourist
Class, but usually no (or very few) First Class accommodations.Should not be recommended to
fussy or picky travellers.

Ex. Citin Pratunam Hotel in Bangkok

3. Moderate Tourist Class– Low budget operations, may be old and ill maintained. Location may
also be not so ideal.

Ex. Four Seasons International House in Pratunam, Bangkok

The Largest Revenue generating is Marriott International

The Largest Overseas Operator is Accor Group ( Sofitel)

The Largest Hotel Group is InterContinental Hotel Group

TYPES OF HOTEL

• Motor Hotel- is designed for motorists and rest stops

• Town Hotel- a lodging place located in particular towns

• Resort Hotel- features relaxing and recreational facilities

• Tourist Hotel- accommodates large scale customers from their travels

• Airport Hotel- built near airports

• Business Hotel- specifically caters to the needs of business customers offering large function
and conference rooms.

LODGING INDUSTRY SEGMENTS

Today’s lodging industry seeks to provide products and services to a variety of travelers. People
seeking lodging accommodations almost all have several needs in common: safety, cleanliness,
preferred location, and value. In addition, different types of travelers also desire specific features
in their overnight accommodations. For example, affluent travelers, frequently desire up-scale
accommodations, long-term guests may want kitchen facilities, and business travelers may need
a business center in their hotel.

• Value (lodging accommodations)– The price paid to rent a room relative to the quality of the
room and services received.

• Full-service hotel– A lodging facility that offers complete food and beverage services
Example: Marriot Manila.

• Room service– The delivery of food and beverages to a hotel guest’s sleeping room

• Limited-service hotel– A lodging facility that offers no, or very restricted, food and beverage
services. Also known as a “select-service hotel.”

Limited-service hotels are free-standing properties that do not have on-site restaurants. They
usually offer a complimentary breakfast, vending machines or small packaged food items,
Internet access, and sometimes unattended game rooms or swimming pools in addition to daily
housekeeping services. These hotels typically provide little, if any, space for group

• Bed and breakfast inns– Very small properties (one to several guest rooms) owned or
managed by persons living on-site; these businesses typically offer one meal a day; also called
B&B.

• Camps/park lodges– Sleeping facilities in national, state, or other parks and recreational areas
that accommodate visitors to these areas.

Basic Hotels According to Segmentation

• Extended-stay hotels– A moderately priced, limited-service hotel marketing to guests desiring

accommodation for extended time periods (generally one week or longer).

• Convention hotel– A lodging property with extensive and flexible meeting and exhibition
spaces that markets to associations, corporations, and other groups bringing people together for
meetings

• Conference center– A specialized hospitality operation specifically designed for and dedicated
to the needs of small- and medium-sized meetings of 20 to 100 people.

• Resort– A full-service hotel with additional attractions that make it a primary destination for
travelers

• Timeshare– A lodging property that sells its rooms to guests for use during a specific time
period each year; also called vacation ownership property.

OTHER SEGMENTS

• Private clubs– Membership organizations not open to the public that exist for people enjoying
common interests. Examples include country (golf) clubs, city clubs, university clubs, yacht clubs,
and military clubs. Some private clubs offer sleeping rooms for members and guests.

• Cruise ship– A passenger vessel designed to provide leisure experiences for people on vacation
at sea.

• Casino– A business operation that offers table and card games along with (usually) slot
operations and other games of skill or chance and amenities that are marketed to customers
seeking gaming activities and entertainment. Many casinos offer lodging accommodations for
their visitors.