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Tourism

concepts and Practices

Chpatern15
Lodging and
Restaurants

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Objectives
• After reading and studying this
chapter, you should be able to:
– Describe the characteristics and
classifications of the lodging industry
– Explain the importance of the lodging
and restaurant sectors of the travel and
tourism industry

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Objectives (cont’d)
• After reading and studying this
chapter, you should be able to:
– Outline the different types and
characteristics of hotels, resorts, motels,
and related accommodations
– Describe the different types and
characteristics of restaurants
– List the classifications of restaurants

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging
• Tourist travel
– Implies at least one night away from
home in hotels, resorts, motels, and
related accommodations
• Travel and tourism as we know it today
could not exist without them

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Tourist travel
– Implies at least one night away from
home in hotels, resorts, motels, and
related accommodations
• Much of travel hinges on the quality and
availability of an area’s hotels
• Close to 16 million hotel and motel rooms
worldwide, approximately 4 million in the
U.S.

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Hotels support, participate in, and
extend services to:
– Trade and convention centers
– Government centers
– Entertainment centers
– Theme parks

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Accommodations offered are an
integral part of the travel experience
– Some want luxury hotels
– Some seek out bed-and-breakfast inns
– Some want convenience (e.g., close to
the highway)

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Growth of conventions and meetings
– Prompted construction of many
convention hotels built to serve
convention groups
• Resort condominiums
– Made possible because of rising middle-
class incomes
– Spawned business of vacation
ownership and fractional ownership
Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.
John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Types of accommodations
– Travelers have a variety of
accommodations
• Hotel rooms with varying views
• Sleeping capsules in Tokyo
• Resorts and casinos
• Youth hostels
• Minimum motel accommodations

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Smith Travel Research hotel types:
– Luxury: Ritz-Carlton
– Upper upscale: Embassy Suites
– Upscale: Hilton Garden Inn
– Midscale with food and beverage:
Quality Inn
– Midscale without food and beverage:
Hampton Inn
– Economy: Homestead
Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.
John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Resorts
– Offer array of active and passive
activities
– More relaxing and pampered
atmosphere

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Resorts
– Kind of “captured clientele”
• Often difficult for to travel far from the
resort
– Mega resorts distinctions
• Immense size and variety of attractions

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Resorts
– Gaming entertainment resorts
• Resort built around a casino
– Island resorts
• Built only where superstructure and
infrastructure can accommodate the resort

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Resorts
– All-inclusives
• Meals and activities for a flat price
– Airport hotels
• Most are within 15-minutes to the airport

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Hotel chains
– Mid-1900s: numerous hotels united to
form chains
• Marriott International
• Hilton
• Sheraton
• Starwood
– It is believed that a chain can operate
more efficiently and less expensively

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Hotel development and ownership
– Franchises
• Properties use the same name and design
but are operated and owned by different
companies
– Management contract
• Companies purchase a hotel or hotel chain
as a part of their portfolio, but arrange a
contract for it to be operated by a hotel
company

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Hotel ratings
– Industry offers several types of lodging
types and amenities
– Mobil Travel Guide’s Star Awards system
• Ranks accommodations on a scale of 1 to 5
– American Automobile Association (AAA)
• Diamond ratings

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Figure 15–1 AAA Hotel Diamond Rating
Source: Courtesy of American Automobile Association

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Factors of pricing:
– Hotel location and room location
• Direct impact on the price of the room
– Season and length of stay
• Room rates also depend on the season
• May also have day-of-the-week fluctuations

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Factors of pricing:
– Corporate, convention, and group rates
• Offer discounts
– Taxes and service charges

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Yield management
– Follows economic concept of supply and
demand
• The more demand, the higher the price
– Made possible by computer systems
– Critical component of revenue
management
– Benefits those who make reservations
90 days out with more attractive rates

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Alternative forms of lodging and
accommodations
– Paradors: old buildings converted into
hostels
– Pensions: large home turned into a
guest house
– Resort condominiums: individually
owned residential units

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Alternative forms of lodging and
accommodations
– Vacation ownership: unit is purchased
for certain blocks of time
– Vacation club: travel-and-use product
based on points

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Lodging (cont’d)
• Alternative forms of lodging and
accommodations
– Youth hostels: provide basic facilities for
overnight stays at rock bottom prices
– Bed and breakfast inns: offer a
comfortable room, a full breakfast, and
a shared or private bathroom

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants
• Subgroupings:
– Full service
– Quick service
– Fine dining
– Ethnic
– Theme
– Celebrity

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Independent restaurant:
– Able to develop its own theme, menu,
décor, and service
• Chain restaurant aspects are already
decided

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Franchises:
– Part of a large chain
• Original owner and/or company may own a
number of restaurants
• Mostly in the quick-service restaurant
segment

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Franchisees pay an initial fee and
percentage of sales
– Marketing, sales, advertising, and
support
– Benefits of a proven concept, assistance
in location selection, training, manuals,
systems for food preparation and
operations, and promotional materials
– Expensive: simple deli-like store can
cost $15,000

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Quick-service restaurants (QSRs)
– Offer food served quickly in pleasant,
clean spaces with few frills and limited
service
• Full-service restaurant
– Selection of menu items—a minimum of
12 entrées—are all cooked to order
– Generally offer a high level of service

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Fine dining restaurants
– Luxury end of the full-service segment
– Charge higher prices
• Increased costs associated with upscale
locations, decorations, and higher food and
labor costs

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Hamburgers and pizza
– Hamburger is the most popular and
frequently ordered restaurant food item
• Popularized by Ray Kroc
• McDonalds franchise
• Chicken and steak
– Popular and reasonably priced
• Provide an alternative to hamburgers and
pizza

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Seafood/fish
– Increased in popularity the past few
years
• Health conscious public
• Family restaurants
– Evolution is patterned after the “coffee
style” of restaurant
– Largely individually or family operated
– Most are informal
Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.
John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Ethnic restaurants
– Most are independently owned and
operated
– Surfaced to cater to the taste of
immigrant groups
• Casual dining
– Includes restaurants with several
characteristics (e.g., chain or
independent, ethnic, or theme)
Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.
John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Theme restaurants
– Many combine sophistication with a
specialty
– Generally serve a limited menu
– Based on a concept (e.g., times of the
past, dinner house, etc.)

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Celebrity restaurants
– Owned or partially owned by a celebrity
– Gaining popularity
• Cost
– Easy to set up if owners have a few
thousand dollars and are prepared to
work
– Best for prospective restaurant owners
to do a business plan
Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.
John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• A business plan details:
– The concept
– Who the guests will be
– Number of meals served each meal
period

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Restaurants (cont’d)
• Projected income statement:
– Expenses are deducted
– Controllable costs include salaries,
wages, benefits, direct operating costs,
etc.

Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.


John Walker | Josielyn T. Walker All Rights Reserved
Tourism: Concepts and Practices Copyright © 2011 by Pearson Education, Inc.
John Walker | Josielyn T. Walker All Rights Reserved