Lodging Chapters 1-3

management companies that operate hotels for owners using the management company's trade name as the hotel brand

first tier (management company)

the price paid to rent a room relative to the quality of the room and services recieved

value (lodging accommodations)

the average (mean) selling price of all guest rooms in a hotel, city, or country for a specific period of time

Average Daily Rate (ADR)

the relationship between price paid and the quality of the products and services received

value

Benchmarking is a tool that is used to look for best practices and understanding how they are achieved in addressing guests needs. T or F

True

Franchising is a method of doing business wherein a franchisor licenses trademarks and methods of doing business to a franchisee in exchange for a one time royalty fee plus a monthly franchise fee. T or F

True

Incentive Management Fees are clearly defined within a Management Contract T or F

True

Involvement in the community is one key to being an Employer of Choice. T or F

True

Management companies may own the brands of the properties to which they provide management services T or F

True

One owner can be franchisee of more than one hotel Brand (e.g., Hilton, Marriott) T or F

True

One of the common characteristics of the lodging industry is that room inventory is a perishable commodity. T or F

True.

A planning tool that broadly identifies what a hospitality operation would like to accomplish and how it will accomplish it is called a: a) Mission Statement b) Vision Statement c) Marketing Plan

a) Mission Statement

Any (and every) time a guest has an opportunity to form an impression about a Hospitality Organization it is termed a/an: a) Moment of truth b) Awesome activity c) Critical incident d) Extraordinary event

a) Moment of truth

Which of the following about hotel management companies is false? a) They do not hire managers. b) They generally manage hotels for a fee. c) They may be owned by a Franchisee. d) They may be owned by a third party.

a) They do not hire managers.

A WOW factor is a) not anticipated by a guest b) Not always positive for the guest experience c) expected by the guest d) All of the above

a) not anticipated by a guest

an association of hotel owners who, through an exchange of ideas, seek to promote professionalism and excellence in a hotel ownership

asian American Hotel Owners Association (AAHOA)

The Hurricane House Hotel, which has 200 rooms available to sell each night, sold 80 rooms last night. Room revenue totaled $8,000. What was the ADR? a) $66.66 b) $100 c) $80 d) $125

b) $100 8,000 / 80

Which of the following statements about hotel ownership/management is false? a) Brand affiliation is very prevalent in the lodging industry. b) A single-unit property affiliated with any brand is likely to have a smaller market share in their locale. c) It is often easier to receive financing for businesses affiliated with a brand. d) The great majority of hotel branding organizations and lodging chains do not own most/or all of their hotels.

b) A single-unit property affiliated with any brand is likely to have a smaller market share in their locale.

A cross-functional team is comprised of a group of employees. a) From the same department within the operation who work together to resolve operating problems. b) From different departments within the operation who work together to resolve operating problems. c) From different departments from other hotels who work together to resolve operating problems not within their home.

b) From different departments within the operation who work together to resolve operating problems.

Reference the above question (#18), the amount of the monthly Franchise Fee charged by the franchisor (e.g. Marriott, Hilton, Starwood) to the franchisee averages what percentage of every dollar of room sales? a) 15%-20% b) 0% c) 20-25% d) 5-10%

d) 5-10%

Which method would be most effective for determining guests' needs and wants? a) Talking with Line Level Employees b) Guest Surveys c) Talking with guests during their stay d) All of the above.

d) All of the above.

Tactics for effective guest service include: a) Cutting trading short to get employees on the floor b) Emphasizing technical skills more than service skills c) Both of the above d) None of the above

d) None of the above

The ROI (Return on Investment) on a lodging facility is comprised of which two major items: a) Annual Sales and Operating Profits b) Annual Sales and Resale Value c) Operating Profits & Resale Value d) None of the above.

d) None of the above. ROI is hotel income after taxes / total hotel investment

an arrangement whereby one party (the franchisor) allows another party to use its logo, brand name, systems, and resources in exchange for a fee

franchise

the ratio of guest rooms sold (or given away) to the number of guest rooms available for sale in a given time period and expressed as a percentage

occupancy rate

In the Merchant Model of On-Line Travel Agencies, room rates are not viewed by the customer before they book a reservation T or F

False

A "Moment of Truth" is always positive. T or F

False ***

A manager cannot delegate Accountability they receive from their Supervisor/Boss. T or F

False ***

More than 85% of all properties are relatively larger with more than 700 guest rooms. T or F

False ***

Value is defined as the relationship between price paid and the quantity of the products and services received. T or F

False ***

Individual ownership (hotel not owned by the brand parent company) with a brand affiliation is not the predominant hotel arrangement in the U.S. T or F

False. ***

Second-tier management companies operate hotels for owners and use their Management Company's name as part of the hotel name. T or F

False. Second-tier management companies operate hotels for owners and DON'T use their Management Company's name as part of the hotel name.

For franchisees, the main advantage of franchising is the franchisee's control of systems, trademarks, assistance, training, and marketing. T or F

False. Franchisees don't do any of these things.

Room revenue divided by the number of rooms sold is call RevPAR. T or F

False. Room revenue divided by the number of rooms sold is ADR.

the amount of profit made from sales divided by the number of rooms available to sell

GOPPAR (gross operating profit per amiable room)

in this travel model, room rates (often heavily discounted) are readily viewed online by potential guests

Merchant Model

in this travel mode, room rates are not seen by guests until they successfully bid for a room

Opaque Rate Model

the money remaining after all the expenses of operating a business have been paid

Profit

the average revenue generated by each guest room available during specific time period.

RevPAR combines the information from ADR and occupancy rate into a single measure

the feeling guests have when they experience an unanticipated and positive "extra" as they interact with a hospitality operation

Wow factor

the search for best practices and an understanding about how they are achieved in efforts to determine how well a hospitality organization is doing

benchmark

an arrangement in which both parties to a contract agree to end the contract early as a result of one party paying the other the agreed-upon financial compensation

buy-out

Which of the following statements is the Ritz Carlton "motto" or Mission Statement? a) "Staff members who embrace Service." b)"The guest is always correct" c) "Ladies & Gentlemen serving Ladies & Gentlemen" d) The guest always comes first"

c) "Ladies & Gentlemen serving Ladies & Gentlemen"

Reference question #22 above, what was the approximate occupancy percentage? a) 70 b) 14 c) 40 d) 84

c) 40 80/200

If an owner hires a management company to operate their hotel, generally whose money is used to run the day-to-day business? a) Management Company b) 50/50 Management Company/Owner (approximately) c) None of the above.

c) None of the above.

Which of the following statements about management companies is true? a) Management companies are organizations that do not operate hotels for a fee. b) A management company may not operate multiple properties simultaneously. c) management companies are often called "contract companies" or "3rd party companies." d) Management companies typically own hotels vs. manage franchise hotel.

c) management companies are often called "contract companies" or "3rd party companies."

a commonly available and most often unspecialized product

commodity

group of employees from each department within the hospitality operation who work together to resolve operating problems

cross-functional teams

What is true about an investor in a hotel? a) The investor must be a corporation. b) The investor must manage the hotel. c) The investor must be an individual. d) The investor is seeking a return on investment.

d) The investor is seeking a return on investment.

the reduction in the value of an asset as it wears out

depreciation

a hotel market area where occupancy rates and/or ADRs are significantly below their historical levels

depressed market

an individual or company that buys, under specific terms and conditions, the right to use a brand name for a fixed period of time at an agree-upon price

franchisee

an organization that manages a brand and sells the right to use the brand name

franchisor

a lodging facility that offers complete food and beverage services

full-service hotel

the amount of revenue generated in a defined time period minus its management controllable expenses for that same period

gross operating profit

organizations that provide lodging accommodations and food services for people when they are away from home

hospitality industry

an establishment that provides sleeping rooms as well as various services to the traveling public

hotel

the owner/manager of one or more hotels

hotlier

a lodging facility that offers no, or very restricted, food and beverage services. Also known as a "select-service hotel"

limited-service hotel

all the businesses that provide overnight accommodations for guests

lodging industry

an organization that operates a hotel for a free. aka "contract company"

management company

the potential customers for a business's products & services

market

any (and every) time a guest has an opportunity to form an impression about the hospitality organization.

moments of truth

the consistent delivery of products and services according to expected standards

quality

the delivery of food and beverages to a hotel guest's sleeping room

room service

management companies that operate hotels for owners and do not use the management company name as part of the hotel.

second tier (management company)

return on investment (ROI)

the percentage rate of financial return achieved on the money invested in a hotel property

a person who travels for pleasure

tourist

a measure of the proportion of a work force that is replaced during a designated time period

turnover rate