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