Copyright 2007 by John W

Chapter 1 Introduction to Hotel

Management

Historical overview of the hotel

industry
Hotel classification system
Trends that foster growth and
employment in the hotel industry
Career Development

Copyright 2007 by John W

2005 Lodging Profile

www.ahma.com/products_info_cent
er_lip.asp

Copyright 2007 by John W

Founders of the Hotel Industry

E. M. Statler

1863-1928
First hotel was for Pan American Expo
in 901 a simple structure of 5000
rooms to be torn down after the fair
was over
Statlers chain was sold to Hilton in
1954
Copyright 2007 by John W

Founders contd.

Conrad Hilton
1887-1979 (after WWI ) in Cisco, TX
Purchased Mobley Hotel, 1919
Purchased Chicago Hilton, Palmer House, Plaza, and
Waldorf=Astoria hotels (after WWII)
First major chain in 1954 when he purchased Statler Hotels:

Marketing, reservations, quality of service

Food and beverage, housekeeping, accounting

Brands:
Hilton Garden Inns
Doubletree
Embassy Suites

Hampton Inns
Harrison Conference Centers
Homewood Suites by Hilton
Red Lion Hotels and Inns
Copyright 2007 by John W

Conrad International

Founders contd.

William Waldorf Astor and John Jacob

Astor IV

Cousins
1893 built hotel for their wealthy friends
Moved from 34th to Park and Lexington
between 49th and 50th Streets
Waldorf Towers is a hotel within a hotel
Note the = in name
Copyright 2007 by John W

Founders contd.

Kemmons Wilson (died in Jan. 2003)

Family trip in 1952

Central reservation system HOLIDEX

Ray Shultz

Protg of Kemmons Wilson

Started Hampton Inn - 1984
Limited service concept; cost consciousness
Copyright 2007 by John W

Founders contd.
J.W. Marriott
1900-1985
1957 Twin Bridges Marriott Motor Hotel
Brands include:

Courtyard
Residence Inn
Renaissance Hotels & Resorts
Fairfield Inn
Spring Hill Suites
Towne Place Suites
Marriott Hotels, Resorts, and Suites
JW Marriott Hotels & Resorts
Copyright 2007 by John W

Founders contd.
Ernest Henderson and Robert Moore

First Sheraton in 1937 was Stonehaven, Springfield,

MA
First hotel chain to be listed on NY Stock exchange
1968 acquired by ITT Corp.
Owned by Starwood Hotels
Brands

Sheraton
Westin
Four Points
St. Regis
The Luxury Collection
W Hotels

Copyright 2007 by John W

Historical Developments
1. Atrium concept used by Hyatt Regency in Atlanta from Roof to
Floor in 1960

http://atlantaregency.hyatt.com/property/index.jhtml
2. Limited-service hotels
- 1980 targeted business market on a limited budget
ex. Hampton Inn
- Features: spacious comfortable room, limited food &
beverage, first to offer 100% satisfaction guarantee

3. Technological Advances

Refer to Figure 1-1 p. 7

Recent additions to that list include:

1) applications of wireless technology for communication

between
departments;
2) guests can access email and other documents or printing
those documents as needed from hot spots designated
wireless transmission and reception areas in the hotel.

Copyright 2007 by John W

Historical Developments contd.

4. Marketing emphasis theme 1970s- guest
reservation/ single phone #
5. Total Quality Management (TQM) a
technique that helps managers look at process used to
create products and services with a critical eye on
improving those processes

1990s (TQM); 2000s quality assurance

and service quality
Note: Chap. 11; analysis of delivery of service
and product with decision making at front-line
empowerment
Copyright 2007 by John W

Historical Developments
contd.
6. Major Reorganization 1987-88
Passive losses on real estate no longer
deductible
Japanese wanted buy hotels -> value of hotels
increased
Recession increased and completed
7. Hotel investment
New incremental income streams who
manages hotels vs. who owns the hotel?
REIT (Real estate investment trusts) pp. 8-9
Copyright 2007 by John W

Historical Developments contd.

8. September 11, 2001 Attack on the
U.S.

Decrease in the number of people willing to fly

yields a decrease in number of rooms rented; this
resulted in a banding together of tourism partners
Review marketing plans of post-9/11 corporate
traveler.
Need to review security at front line of hotel who is
coming into the hotel
Community responsibility for security activities
Review liability implications to repair facilities and
guest security for effects of terrorism
Copyright 2007 by John W

Overview of the Hotel Industry

Figure 1-2. This figure will anchor

the discussion on the various ways
the hotel industry can be discussed
p.11

Copyright 2007 by John W

Overview of Lodging Industry

contd.
Types of lodging facilities
A. Hotels

Marriott Wardman Park Hotel

http://www.wardmanpark.com /

B. Motels
C. All-Suites
example - Embassy Suites
http://www.embassysuiteschicago.com/

D. Limited Service Hotels

E. Extended Stay Hotels continued high
occupancy

example - Homewood Suites

http://www.homewoodsuitescharlotte.com/

Copyright 2007 by John W

Overview of Lodging Industry

contd.

Market Orientation types of properties and

who they serve
Residential

Public dining
Social activities
Recreational facilities

Commercial

Computerized reservation systems

Public dining
Banquet service, lounge and entertainment areas
Shuttle transportation to airports
Copyright 2007 by John W

Lodging Overview contd.

Sales Indicators:
A. Occupancy
percentage:

B. Average Daily
Rate:

# rooms sold
# rooms available

room revenue
# rooms sold

50 = 50 %
100

$4000_ = $80
50

Copyright 2007 by John W

Lodging Overview
Yield Percentage Facilitys success in
selling its room inventory on a daily
basis
Rooms sold x ADR
Rooms avail x Rack Rate

50 x $80 = $4,000
100 x $120 = $12,000

= 33.3 % Yield

Copyright 2007 by John W

Lodging Overview contd.

Revenue Per Available Room (RevPAR)

Effectiveness of each room to produce a profit

Room Revenue
# rooms available
$4000 = $40
100
or
Hotel occupancy % x ADR
50 % x $80 = $40

Copyright 2007 by John W

Lodging Overview contd.

How the industry talks about

RevPAR:
http://www.hotelinteractive.com/index.asp?page_id=4000&comp=1&article_id=3956

Copyright 2007 by John W

Lodging Overview contd.

Levels of Service
Full-service
ex. J.W.Marriott
reservations
on-premise dining
banquet
meeting facilities
recreation facilities

All-Suites
ex. Embassy
Suites
at-home atmosphere
separate living and
sleeping areas or
working areas
kitchenette
wet bars

Copyright 2007 by John W

Lodging Overview contd.

Limited Service
ex. Hampton Inns
continental breakfast
sleeping room
modest furniture

Extended Stay
ex. Homewood Suites
home-away-fromhome
fully equipped kitchen
spacious bedroom
living areas
light breakfast or
dinner

Copyright 2007 by John W

Lodging Overview contd.

Business Affiliations
Chain affiliation
provide operational and marketing
services

reservation systems
advertising
operations
management development
Copyright 2007 by John W

Lodging Overview contd.

Referral Property with a Chain

Assistance with management
assistance with marketing, advertising and
reservation
Company-owned Property hotel owned
and operated by the chain company
Management Contract Property operated
by a consulting company that provides
operational and marketing expertise and a
professional staff
Independent property
Copyright 2007 by John W

Brands

Brands allows a hotel company to

create a concept in the mind of a
consumer; a mind-concept
Refer to pp. 22-23 for listings of
hotel brands

Copyright 2007 by John W

Independent Properties

Independent Property hotel not

associated with a franchise
Similar characteristics as found in
Fig. 1-2 (I-IV)
Challenges:

Capital investment
Consultation and assistance
Marketing
Copyright 2007 by John W

Trends That Foster Growth

Leisure time
3-day weekends
Paid vacations
40 hour work weeks
Early retirement

Me/pleasure concept
Shift from thinking that
recreation and leisure were
a privilege for wealthy only
Travel vs. isolated nature of
many jobs

Discretionary income money remaining after

necessities of life are
paid
increase because of two
in the family
women in the workforce
not a constant to depend
upon:

Unemployment
low interest rate make
the purchase of high
ticket items more
(homes, cars, boats)
more desirable and make
travel less likely

Copyright 2007 by John W

Trends That Foster Growth

contd.

Family size/household size

Smaller families are more likely to

have more discretionary income

Business travel

Oil/fuel oil prices/airfare

Fear
Business economy
Conf. call, PicTel
Copyright 2007 by John W

Trends That Foster Growth

contd.
Female business travel
Increasing segment
Amenities/safety
Female travelers:
http://www.hotel-online.com/News/PR2002_3rd/Aug02_
WhatMatters.html
Travel as an experience
Education to follow-up what they have learned
Culture visit art, theatre, music, opera, ballet,
museums
Sports and nature
Personal development/hobbies
Copyright 2007 by John W

Career Development
1. Establishing Career Goals

Know where you want to go

2.
Educational Preparation
Associate
Baccalaureate
Distance Learning
Life-long Learning
3. Work Experience
Copyright 2007 by John W

Career Development
contd.
4. Professional Memberships
American Hotel & Lodging Association
http://www.ahla.com/

Certified Hotel Administrator (CHA)

http://www.ei-ahla.org/certification_cha.asp
Certified Rooms Division Executive (CRDE)
http://www.ei-ahla.org/certification_crde.asp
Hospitality Sales and Marketing Association International
http://www.hsmai.org/
National Restaurant Association
http://www.restaurant.org

Copyright 2007 by John W

Career Development
contd.
Ports of entry
Marketing and sales
Front office
Food and beverage
Controller

Copyright 2007 by John W

Researching Growth Areas in the

Hospitality Industry

Trends in the Lodging

Industry by Pannell, Kerr,
and Forster

http://www.hotelonline.com/Trends/PKF/Trends/H
owToOrder.html

Use of the Internet

Hotel On-line
http://www.hotel-online.com
Hotel Business
http://www.hotelbusiness.co
m
Hotel Magazine

Trade journals

Hotels

Hotel & Motel

Management

Lodging
Hospitality

http://www.hotelsmag.com/

Copyright 2007 by John W