Chapter 4: Lodging
Hotel Ownership
Independent Ownership
These can be independent hotels, with no
affiliation
Managed by the owners of the properties.
Take complete responsibility for the hotel’s success
and failure.
Advantage
Have complete control over every aspect of their
business.
Operating freedom
Absence of franchising fees and marketing overhead
fees
Disadvantage
Financial challenge
They developed their own operation system that can
succeed or failed based on the effectiveness.
Chain Ownership
Parent Company
Franchising
Management Contract
Franchising
a contractual relationship between a licensor (franchisor) and a licensee
(franchisee) that allows the business owner to use the licensor's brand and
method of doing business to distribute products or services to consumers.
A franchisee owns a business, but pays a proportion of profits, in exchange
for the permission to use the franchisor's business model and intellectual
property.
In return the franchisee agrees (under contract) to operate a business (e.g
Restaurant or Hotel) in accordance with the franchisor’s guidelines.
Franchising is a way of doing business that benefits both the franchisor-
who wants to expand the business rapidly –and the franchisee-who has the
financial backing but lacks specific expertise and recognition.
For a fee the company (Franchisor) grants certain
rights for example to use:
Trademark
Operating Systems
Operating procedures
Marketing
Franchising Benefits and Drawbacks
Benefits: Franchisee
A set of plan and specifications from which to build
National Advertising
Centralized Reservation System
Participation in volume discounts for purchasing furnishing,
fixtures and equipment.
Drawbacks to the Franchisee as follows
High fees both to join and ongoing
Franchisee must conform to the franchisors agreement
Franchisees must maintain all standards set by the franchisor
Benefits to the Franchise Company
Increased market share and recognition
Up-front fees
Drawbacks to the franchise company are as
follows
The need to be very careful in the selection
of franchisees
Difficulty in maintaining control of standards
Management Contracts
A management contract is a service contract
The management company is paid for its
managerial skills, the franchisor for the right to use
its name, and its reservation system.
Management contracts involve not just selling a
method of doing things (as with franchising or
licensing) but involves actually doing them.
RATING AND CLASSIFICATION OF HOTELS
Who decides and gives Star rating to Hotels?
American Automobile Association (AAA)
The most popular star rating Association in North
America and especially in the USA. They rate in
terms of diamonds with 5 Diamonds pointing to
luxury properties.
AA– the Automobile Association founded in 1905
rates Hotels from a Star category of 1-5 and is a
British firm.
One Star: Economy
characterized by basic, clean, and simple
accommodations
Rooms are generally small and amenities
May not have a private bathroom, an in-room
telephone, or other amenities. Limited hours may
apply to public access and guest reception.
Hotel locations may be near to public transportation,
and major streets or population centers.
Two Star: Value
Basic and clean accommodations, with some business
services ,bellhop service, fairly complete fitness and
recreation facilities
In-hotel restaurants have limited menus and typically
consist of continental breakfast service.
Rooms have comfortable accommodations and typically
include telephones, TV, and a few other basic amenities;
room service and baggage service are usually not included.
Three Star: First Class
More spacious guest rooms with quality
amenities, good dining service on-site,
usually a pool and fitness center, well-laid
out lobbies, and variable room service.
Offers other amenities such as valet parking and on-
site medical services are typically available.
Meeting and conference facilities for business groups
or family reunions are sometimes available in three-
star resorts.
Usually the grounds are well manicured and
aesthetically pleasing.
Four Star: Superior
Upscale accommodations, offering excellent
restaurants, fine dining, bars, lounges, and
complete room service.
High-quality construction, very personalized service,
contemporary furnishings, valet parking, and many
other major hotel services are available.
Concierge services, fitness centers and spas, and
high quality linens, bedding, flooring, and amenities
are used.
Five Star: Exceptional
Characterized by the best in luxury, service, location, fine
dining with exquisite menus and often-famous chefs, and
exceptional convenience and comfort.
Superb craftsmanship in architecture, landscaping, interior
design, and exquisite taste.
Elegant ambience carries throughout the rooms, lobbies,
facilities, and outer grounds.
The highest quality linens, bedding, flooring, and amenities
are used.
Excellent business centers and meeting facilities are usually
present in the larger properties. Landscaping and grounds
Classification of Hotels
Location, Types of services offered, Price
City Center Hotels
Hotels that are located in urban areas
Usually reserved for people who intend to stay a while (in the
short term).
City Hotel also known as a transit hotel because it is usually
occupied by business people who use the facilities and
business services provided by the hotel.
Freeway Hotels and Motels
Freeway hotels and motels came into
prominence in the1950s and 1960s.
The travelers needed a convenient place to stay
that was reasonably priced with few frills.
Guest could simply drive up, park outside the
office, register, and rent a room
Airport Hotels
Airport Hotel is a hotel near the airport.
The hotel does not have to be connected to the airport
(although some are) or even adjacent to it; it could be located
up to five miles away. Most airport hotels have a shuttle to and
from the terminals.
Generally composed of 200 to 600 room size and are full
service.
Market of Airport hotels:
Passengers with early or late flights may
stay over at the airport hotel
Connecting flights
Airlines that provides free Lodging
Air Canada
The Air Canada Stopover Option offers Business Class, Premium
Economy passengers free hotel accommodation for connections
more than six (6) hours.
Air China
Those with an overnight layover in Beijing are offered a free “transit
hotel” stay.
Emirates
Passengers with an 8-24-hour layover or first/business class
passengers with a 6-24-hour layover with “accommodation, meals,
ground transportation and visa costs.”
Casino Hotels
A casino hotel is an establishment consisting of a casino with lodging provided in an on-
premises hotel.
Customers receive the benefits of both gambling facilities and lodging. Since the casino
and hotel are located on the same premises, all the gambler's necessities can be
provided in one location.
They make more money from the gaming than from the rooms.
Convention Hotels
Convention Hotels provide facilities to meet the needs of groups attending and holding
conventions.
Primary caters to conventions and meetings of small to large groups.
These hotel typically exceeds 500 guest rooms, with larger public areas to
accommodate hundreds of people at any given time.
Full Service Hotels
Offers a wide range of :
oFacilities, services and amenities.
oMultiple food and beverage outlets
oMeeting, Convention and catering services
Economy/Budget Hotel
Offers clean, reasonably sized and furnished rooms
without the frills of full service hotel.
They focus on selling beds rather than other
services
Extended-Stay Hotels
Designed for travelers who intend to stay for an
extended period (five days or longer) and require
reduced hotel services.
Typically includes Kitchen area.
Condotels
Combination of hotel and condominium
Developers build a hotel and sell it as condo units.
Mixed-Use Hotels
Means that hotel may also have residences –actual
condos that are used by people rather than
Condotels: a spa, and service facilities.
Bed and Breakfast Inns
Accommodation with the owner, who lives on the
premises or nearby.
Provides a clean, attractive accommodation and
breakfast.
Resort Hotels
A resort is a place used for relaxation or recreation, attracting visitors
for vacations and /or tourism.
Resorts are places, towns or sometimes commercial establishment
operated by a single company.
Vacation Ownership
A TIMESHARE with a particular form of membership or use right
A person purchases the use of a unit similar to a condominium for
blocks of times, usually in weeks.
Offers consumers the opportunity to purchased fully furnished
vacations accommodation.
Flotel
Floatel or Floating Hotel
These hotels are established on luxury liner or ship
It is located on river, sea or big lake
Rotels
Hotel facilities available on wheels
They are normally used by small groups of travelers
Boutique Hotel
a small hotel which typically has between 10 and 100 rooms in unique
settings with upscale accommodations and individualized Unique
Selling Points.
Unusual Hotels
Treetops Hotel
Ice Hotel
Underwater Hotel
Capsule hotel
Hotel in Himalayan Mountains
Green Lodging
Are lodges, hotels, motels, inns and resorts which
meet the standards for environmental responsibility.
Initiative in recycling
Kitchen waste diversification
Buying green power
Community outreach programs