Hotel MGT

Copyright 2007 by John Wiley
& Sons, Inc. All rights reserved

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

2005 Lodging Profile
www.ahma.com/products_info_center_li
p.asp

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

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 Copyright

Inns 2007 by John Wiley
Conrad International & Sons, Inc. All rights reserved
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
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

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

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

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.

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

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

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

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

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/

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

Lodging Overview contd.
Sales Indicators:
A. Occupancy B. Average Daily Rate:

percentage:
room revenue
# rooms sold # rooms sold
# rooms available
$4000_ = $80
50 = 50 % 50
100

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 = Copyright
$12,000 =Wiley33.3 % Yield
2007 by John
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 Wiley

How the industry talks about RevPAR:

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

Levels of Service
Full-service All-Suites
ex. J.W.Marriott ex. Embassy Suites
reservations at-home atmosphere
separate living and
on-premise dining sleeping areas or
banquet working areas
meeting facilities kitchenette
recreation facilities wet bars

Limited Service Extended Stay
ex. Hampton Inns ex. Homewood Suites
continental breakfast home-away-from-home
sleeping room fully equipped kitchen
modest furniture spacious bedroom
living areas
light breakfast or dinner

Business Affiliations
Chain affiliation
provide operational and marketing

services
reservation systems
advertising
operations
management development
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

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

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
Trends That Foster Growth
Leisure time Discretionary income -
3-day weekends money remaining after
Paid vacations necessities of life are paid
40 hour work weeks increase because of two in
Early retirement the family
women in the workforce
Me/pleasure concept not a constant to depend
Shift from thinking that upon:
recreation and leisure were a Unemployment
privilege for wealthy only low interest rate make the
Travel vs. isolated nature of purchase of high ticket
many jobs items more (homes, cars,
boats) more desirable and
make travel less likely

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
contd.
Female business travel
Increasing segment
Amenities/safety
Female travelers: http://www.hotel-
online.com/News/PR2002_3rd/Aug02_WhatMatters.h
tml
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
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
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

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

Researching Growth Areas in the
Hospitality Industry
Trends in the Lodging

Industry by Pannell, Kerr, and
Trade journals
Forster Hotels
http://www.hotel-
online.com/Trends/PKF/Trends/How
ToOrder.html
Use of the Internet Hotel & Motel
Hotel On-line http://www.hotel-
online.com
Management
Hotel Business
http://www.hotelbusiness.com
Hotel Magazine Lodging Hospitality
http://www.hotelsmag.com/


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Copyright 2007 by John Wiley

& Sons, Inc. All rights reserved

Historical overview of the hotel

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Harrison Conference Centers

Homewood Suites by Hilton

Red Lion Hotels and Copyright

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Figure 1-2. This figure will anchor the

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

A. Occupancy B. Average Daily Rate:

Copyright 2007 by John Wiley

Revenue Per Available Room (RevPAR)

Hotel occupancy % x ADR

50 % x $80 = $40 Copyright 2007 by John Wiley

How the industry talks about RevPAR:

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

provide operational and marketing

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

Copyright 2007 by John Wiley

American Hotel & Lodging Association

Certified Hotel Administrator (CHA)

Hospitality Sales and Marketing Association International

National Restaurant Association

Copyright 2007 by John Wiley

Food and beverage

Copyright 2007 by John Wiley

Trends in the Lodging

Copyright 2007 by John Wiley

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