HM 211 Midterm

AHLA (American Hotel & Lodging Association)

-52,887 properties in the US, 4,926,543 rooms (as of 2013) -classifies properties in several ways

Franchising

-A concept that allows a company to expand more quickly by using other people's/company's money, rather than using its own financing -Dunkin, auntie anne's, bojangle's, applebees, subway, etc.

Total Quality Management (TQM)

-A participatory process which empowers all levels of employees to work in groups in order to establish guest service expectations & determine the best way to meet/exceed those expectations -Focuses on error PREVENTION

Transient Occupancy Tax (TOT)

-Also known as the bed tax -Communities also benefit from the _____

Energy Management Systems

-Automatic switch, infrared motion sensor -Can reduce energy consumption by 30% or more -Keep tabs on room occupancy, lighting, minibar, smoke detectors, locks, and guest amenities

Franchise fees

-Average: 3-4% of revenue -Vary -Can be negotiated

Restaurant

-Biological need to eat, socialize, and be entertained -Use more than 30 different technology applications

Hotel affiliations (multiple affiliations)

-Chain -Parent Company -Operation (corporate, franchise, or independent) -Management company -Owner or -Asset management company -Membership or marketing group -Corporate -Franchise -Independent

Perishability

-Characteristic of the hospitality industry -Can lose its usefulness & value if not used in time -Unsold airline ticket & hotel rooms- if not sold by that day, they can not be sold later bc expired

Intangible

-Characteristic of the hospitality industry -Can not be touched -Services (not goods)

Variability

-Characteristic of the hospitality industry -Changes in quality of the same service by different vendors

Inseparability

-Characteristic of the hospitality industry -Interaction between the provider & consumer of a service

Economy/budget hotels

-Clean, reasonably sized, furnished -Do not offer meals or meeting rooms

Condotels, timeshares, mixed-use hotels

-Combination of hotels & condos -Sometimes built as hotels & sold as condo units -May have other facilities such as a spa or sports area

Real Estate Investment Trust (REIT)

-Company that owns or finances income-producing real estate -Do not pay corporate income taxes -Required to distribute 95% of net income to shareholders -Must have 75% of its assets in real estate -About 300 REITs exist with a combined market value of $70 billion

The executive committee

-Comprised of directors of the following departments: -Human resources -Food & beverage -Rooms division -Marketing & sales -Engineering -Accounting -Meeting: once a week about 1-2 hours -Focus on: -Occupancy percentage -Total quality management -Forecasts -RevPAR (revenue per available room) -Guest & employee satisfaction -Training etc.

Parent company (not in ppt)

-Controls smaller businesses by owning an influential amount of stock/control -Can be hands on or off

Freeway & Interstate hotels/motels

-Convenient place to stay near freeway exits -Grew quickly in the 1950-60s -Smaller in size & number of rooms -Often independent owners or franchised

Remodel

-Cost of remodel plus higher operating costs for energy & maintenance -Every 7 years

Rooms division

-Departments & functions which play essential roles in providing the service guests expect during a hotel stay -Consists of: -Front office -Reservations -Housekeeping -Concierge -Guest service -Security -Communications -Main concerns: -Financial performance -Employee satisfaction -Guest satisfaction -Guest services -Guest relations -Security -Gift shop

Resort hotels

-Developed with growth of rail travel -Luxury _____ hotels developed in the late 1800s to receive clientele arriving by rail -Some are family friendly -Some work to attract conventions & conferences, which increase occupancy -Diversified marketing to attract: -business & sales marketing -incentive groups -sporting events -spas -adventure tourism -ecotourism -High expectations

Boutique hotels

-Different experience -Unique in architecture, style, decor, etc. -25-125 rooms with high level of service

Mangement structure

-Differs among larger, midscale, and smaller properties -Larger properties = more complex -Small property = may not have HR department, but department head will be responsible

Front office manager

-Enhance guest service by developing services to meet guests' needs -Supervise GSAs (guest service associates = interact directly with the guests during check in/out)

Hotel general manager (GM)

-Ensure reasonable ROI (return on investment)= level of profitability -Keep guests satisfied -Keep employees happy -Leading and operating the hotel and its infrastructure (room atmosphere to security) -Performance of the hotel & the employees -Hire the best people & set the tone- a structure of excellence -Be familiar with the cultures of guests & employees

Casino hotels

-Entertainment & recreation -Gaming: one of the fastest growing segments of the entertainment field -Larger ______ attract conventions -More than 150 hotels on native american lands

Vacation ownership

-Fastest growing segment of the US travel & tourism industry -Timeshare/fractional ownership

American Automobile Association (AAA)

-Five diamond rating system -Focuses on all hotels, not just 4 & 5 star

Forbes Travel Guide

-Five star rating process -Only a few dozen properties earn its highest ratings in a year -Mainly focuses on 4 & 5 star hotels -More picky

Hotel career paths

-Food & beverage, room division, marketing, human resource, finance/accounting

Moments of truth

-Guest encounters -Quality of service as perceived by customer

Night auditor

-Handles front desk & accounting duties -Responsible for the overnight operations of a hotel -Balance its accounts on a daily basis -About 1AM (when hotel is quiet)- night auditor balancing the guest accounts receivable -Daily report: room occupancy percentage (ROP), average daily rate (ADR)

Airport hotels

-High occupancy due to number of travelers in airports -Full service with as many as 600 rooms

Asset Management Company (not in ppt)

-Invests client's pooled funds into securities that match declared financial objectives. -Provides diversification/investment options -Manage funds & pension plans -Charge hotel's service fees

Conference & convention hotels

-Large public areas & banquet facilities, a business center, travel desk, airport shuttle, etc. -Minimum of 300 rooms & 20,000 sq ft of meeting space -Multiple banquet areas around the grounds

Hospitality Industry

-Largest & fastest growing -24/7, 365 days a year -Longer hours -Heavy on shift work -Degree + Experience -Intangible, inseparable, perishable, variable -Paid well -Opportunities to advance -Provide guest satisfaction at a price -Fascinating, fun, stimulating

Challenges of franchising

-Maintenance of quality standards (keep restaurant up to standards) -Financial stability of franchise

Managing contract vs. franchising

-Management contract -service contract -manager manages the day to day operation of a business in exchange for benefits -Franchising -Licensing contract -Franchisee owns a business, but pays a proportion of profits (3-4% of revenue) & follows company guidelines

Hospitality philosophy (past)

-Manager's ability to plan, organize, implement, and measure performance -Managers do the most

Hospitality philosophy (today)

-Managers counseling associates, giving them resources, and helping them to develop & think for themselves -Managers help & guide employees

Referral associations

-Marketing consortium/referral organization -Independent hotel operators are able to compete with chains -Share a centralized reservation system (CRS) and common image, logo, advertising slogan -Example: preferred hotels, resorts worldwide, starwood?

City center & suburban hotels

-Meets the needs of business & leisure travelers with a wide range of accommodations and services -Offer a signature restaurant, lounge, bar, meeting/convention rooms, ballroom, often a fancy nightspot

Sustainable/green lodging

-More environmentally conscious -Energy is continually increasing in cost -Lighting can amount to as much as 30-40% of electrical consumption -Water conservation can reduce waste & cost

The lodging industry

-More than $155 billion industry -About 53,000 properties -5 million guestrooms

On campus HM clubs at JMU

-NSMH (National Society of Minorities in Hospitality) -PCMA (Professional Convention Management Association) -ESD (Eta Sigma Delta) -HSMAI (Hospitality Sales & Marketing Association International) -CMAA (Club Managers Association of America)

New hotel

-Not profitable for several years -High construction costs & lack of immediate market share

Full service hotels

-Offer a full range of facilities, services, and amenities for both business & leisure travelers -Hilton, Hyatt, Four Seasons, etc.

Bed & breakfast inns

-Offer wide variety of accommodations & costs -Provide an alternative to traditional lodging -Usually owner occupied with just a few rooms available for rent

Franchise

-Operated by a third party (follows franchise guidelines) -Owned by an outside investor -Follow guidelines set by the parent company -Type of product sold, operating procedures, prices, etc.

Hospitality philosophy

-Promote empowerment & total quality management (TQM) -Increased ethics, morals, fairness, and equality

Extended stay hotels & all suite extended stay hotels

-Provide accommodations for travelers staying for more than 5 days -Rates depend on length of stay -Guests: usually professionals or families -Full kitchen & more space per room

Franchise disadvantages

-Restricted freedom -Must operate within constraints set

Revenue per available room (RevPAR) by STR

-RevPAR = room revenue / # of rooms available -Useful indicator for revenue management program -Compared to competitive set of hotels -If room sales are $50,000, 400 available rooms - = 50,000 / 400 = $125 = RevPAR

Highest quality chain hotels

-Ritz Carlton (received the Malcolm Baldrige National Quality Award from the US Department of Commerce) -Four Seasons

Quality Control (QC)

-Set of procedures for verifying & maintaining a desired level of quality in an existing service -Focuses on error DETECTION

Departments of a hotel

-Several business/revenue centers and cost centers

Pineapple

-Symbol of welcome, friendship, and hospitality -Imported from West Indies -Served to royal families & the elite

Most unusual hotels

-The Treetops in Kenya -The Ice Hotel in Swedish Lapland -The Underwater Hotel at the Great Barrier Reef

Trading blocks (international perspective)

-The global economy is segmented into large _____ -European Economic Community (EEC) -North American Free Trade Agreement (NAFTA) -Reduce limitations on transfer of goods & labor -Leads to increased travel, tourism, commerce, and industry

Front office

-The hub or nerve center of the hotel -Aim for 100% occupancy- upselling & yield management -Interaction of supply & demand impacts ability to sell rooms -Folio -Maintaining a balanced folio (guest account) -Charges posted to the guest folio -Payment: either received on guest check out or transferred to the city ledger -Logical center to handle guest information needs (mail, faxes, messages, local & hotel information)

Revenue management

-To maximize room revenue at the hotel -Based on the economics of supply & demand -Ideal situation = sell every room at the highest rack rate (but not possible) -Conventions, groups, and organizations granted a reduced room rate -Monitor reservations, previous trends, and current demand

Functions of a hotel

-To provide lodging accommodations -To provide a service -To generate a profit for the owners

Right to use franchise company's:

-Trademark -Operating procedures -Reservation systems -Marketing know-how -Purchasing discounts -Site selection (location), construction plans, etc.

Management contracts

-Usually allow for the hotel company to manage the property for a period of years -Little to no upfront financing -Company receives a fee determined by a % of gross/net profit -Contracts usually state a % of sales/operating profit at 2+2 percent -Less capital is "tied up" in managing a property compared to owning

Timeshare

-Vacation property with shared ownership. -Fractional ownership -Each owner occupies the unit they buy for the period of time -Many leading hoteliers are entering into this market -Save money on rising costs of vacation accommodations over a long term period- purchase price is locked -Form of real estate ownership or right to use a property in part -Resorts, urban condos, townhouses, or single family houses -Worldwide travel by ownership exchange

Largest hotels in the world

1. Izmaillovo Hotel in Moscow- 7,500 rooms 2. MGM Las Vegas- 7,372 rooms 3. The Venetian Las Vegas- 7,117 rooms

Room occupancy percentage (ROP)

= (# of rooms occupied / # of rooms available) x 100 -A 400-unit hotel that has sold 2,100 room nights in one week -rooms occupied per night = 2,100 / 7 = 300 rooms - = (300 / 400 rooms) x 100 = 75%

Average daily rate (ADR)

= the total of room revenue / # of rooms sold - If total revenue for a week is $195,600 & the hotel sold 1,630 room nights that week - = 195,600 / 1630 = $120 per night

Quasi-Chain

A cross between a chain and a marketing group for independent hotels

57%

About ___% of consumers use the internet to book travels (as of 2013)

3%

About ___% of the 59,000 properties inspected by the AAA in North America earn the 5 diamond award each year -in 2013, only 124 lodging properties received this

Franchisee

Agrees to operate the restaurant, hotel, etc. within the guidelines set by the franchisor

12.62%

Average transient occupancy tax

Franchisor

Grants certain rights for a fee in order to reduce the risk of failure

One of the most important in-room amenities

High speed internet

Experience

Leads to career opportunities & opportunities to advance

Price (Classification)

Luxury, all suites, economy, budget

Franchising & management contract

Main driving forces in development & operation within the lodging industry

70%

Room sales are about ___% of a hotel's revenue

Economic impact of hotels (direct)

Sales of rooms mean millions of dollars into the local community

Economic impact of hotels (indirect)

The ripple effect (multiplier effect)- when money spent by tourists & employees is re spent in the community

City Ledger

Special hotel accounts for a company that has established credit with a hotel

Older hotels

Still recognized in the market

Shift work

typically 4 shifts -morning -mid -evening -graveyard (overnight)

Senior positions

work 10-12 hours a day regardless of time & day

26%

Food & beverage sales are about ___% of a hotel's revenue

National Restaurant Association (NRA)

Forecasts a need for thousands of supervisors & managers in the industry

Service (Classification)

Full service, mid scale, extended stay, limited service

Vacation clubs

A variation of the time share

Location (Classification)

City center, resort, airport, freeway, etc.

Smith Travel Research (STR)

Classifies hotel by scale -luxury -upper upscale -upscale -upper midscale -midscale -economy

Summary operating statement

Details revenue and expenses for a period of time

Feasibility study

Determines the degree to which the proposed hotel project will be financially successful

High expectations in resort hotels

Highly trained staff, challenged in some countries

Capital Intensive

Hotel ownership & development is ______

Membership and marketing groups

Hotels may be affiliated with one or more _________ that provide various benefits

Sated & losing market share

Hotels often remodeled every 7 years after becoming ______

Independent

Not affiliated with a parent company or chain

Corporate

Owned or managed by a chain or parent company

This affects the human experience

Powerful impressions (FOH, BOH)