{3725b759-9f64-4e45-83b6-b230fa7c03a1}ch. 3 lodging industry

8/3/2019 {3725b759-9f64-4e45-83b6-b230fa7c03a1}ch. 3 lodging industry

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Ch. 3The Lodging

Industry


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Understanding Lodging

3.1


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A Brief History of Lodging in theU.S.: Planes, Trains and

Automobiles

Lodging industry in the U.S. has always beenstrongly influenced by changes in transportation.

As stagecoach routes were established in the mid-

1600, coaching inns became popular 1700s Americans started combining lodging with food

1794 City Hotel in New York City, the first building inthe U.S. designed specifically as a hotel.

From that point on, throughout the 1800s lodgingproperties began to flourish.

The Tremont House, the first of the grand hotels, wasbuilt in Boston in 1828. (First hotel to offer private

rooms with locking doors)


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History Continued

1825 invention of the railroad, inns, taverns, andfoodservice facilities located near railway.

Near the turn of the century, Conrad Hilton, who was abanker in New Mexico, purchased is first hotel.

Other famous hotels were build during the early part ofthe twentieth century, including the Ritz Carlton inBoston, Plaza in New York City, and the Stevens Hotel

in Chicago During the Depression in the 1930s, several hotel

properties closed

During World Was II in the 1940s, the lodging industry

prospered. (Hotels experienced extremely highoccupancy rates usually at least 90%)

1950s cross-country vacations became popular with theautomobile and freeway system

1958airlines became popular


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Lodging Operations Organization

Front-of-the-House vs. Back-of-the-House

Typical lodging operation can be dividedbetween its administrative departmentsand service departments

Administrative departments = manage thebusiness responsibilities such as accounting,

human resources and training, and marketing andsales.

Service departments = are responsible for servingthe guest directly.


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Administrative Departments

General Management (GM) person in chargeof lodging establishment (other managers reportdirectly to the GM)

Accounting and Financial Managementkeeps track of overall profits, records sales, andcalculates costs

Human Resources hiring labor and evaluate

performance (resp. local labor laws) Marketing and Sales make sure their lodging

facility suite their customers (sales, advertising)


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Service Departments

Front Office have to give good firstimpression, good people skills, manage rooms

Housekeeping maintaining property,responsible for keep guest ready and rooms

prepared. Engineering and Facility Maintenance keep

physical building in good running order andmaintain the operations mechanical equipment

Security protecting guest, employees andproperty, developing and following allemergency procedures

Food and Beverage one of the mostdemanding arrears


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Questions

1. Historically, the lodging industry has been closelytied to the ________industry?

2. What mode of transportation was invented in the

early 1800s?3. During which decade in the U.S. did the lodging

industry experience the closing of many hotels?

4. List the four arrears of administrative departmentsand what they do?

5. List the five areas of service departments andwhat they do?


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Organization of the

Lodging Industry3.2


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Two Types of Travelers

Guest fall under one of two categories:leisure travelers or business travelers

Leisure travelers= often want to get away from it

all lodging properties cater to specific leisuretravelers by offering services of activities

Business travelers= stay at lodging for business-related reasons. They represent the majority of

guests they might need fax machines, copiespersonal computes etc.

Most important factor considered whenselecting a lodging facility is room

cleanliness


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At Your Service: LodgingEstablishments for All

Lodging properties can be classified inmany ways: by the level of serviceprovided, rate charged, amenities offered

Amenity= service or facility within thelodging operation that guests may use orenjoy without having to leave the hotel

Full-service properties= cater to travelers insearch of a wide range of conveniences. (offerlarger rooms, well-trained staff, plenty ofamenities)

Luxury properties= hotels that offer top-of-the-line

comfort and elegance


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At Your Service: LodgingEstablishments for All

Economy lodging= offers clean, low-pricedaccommodations primarily to traveling salespeople,senior citizens,, and families with moderate income (sm.staff, simple rooms)

Mid-price facilities= between full-service and economysectors

All-Suite properties= fastest growing segment, offerapartment style facilities

Resorts= (spares no expense), feature extensivefacilities for vacationers who are looking for recreationalactivates and entertainment

Bed and Breakfast= guest who enjoy quaint, quietaccommodations with simple amentias (private-owned)

Page 159, ex. Of hotels and what service bracket they fit into


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Location, Location, Location

Location is one of the most influentialfactors contributing to the success oflodging facility

Airport facilities

Downtown (primarily for business travelers, tend tocharge higher rates)

Suburban properties (travelers who wanted toattend downtown events but didnt want to spend

the night in the city)

Roadside motes (meet the needs of vacation andbusiness travelers)

Resorts (vacation arrears)


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Facility Rating Systems

Several organizations rate quality of lodgingestablishments (AAA diamonds and MobilTravel Guides rate with stars)

AAA most widely recognized One diamond functional accommodations

(minimum standards) Two Diamonds noticeable enhancements (dcor

and or quality of furnishing) Three Diamonds upgrade in services and comfort,

with additional amenities Four Diamonds excellent properties offering high

level of service and a wide variety of amenities Five diamonds exceptional establishment,

providing the highest level of luxury and service


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Questions

1. Indicate which type of traveler business (B) or leisure (L)would find the features listed below important.

1. Meeting rooms 2. Programs for children

3. Near shopping areas 4. Location close to airport

5. Shuttle bus to theme park 6. Kiddie swimming pool

7. Shuttle to convention center 8. Twenty-four hr. room service

2. What type of hotel is most likely to provide conference andmeeting rooms.

3. Florist shop that operates in a hotel's lobby is known as a?

4. __________facilities are often constructed far from cities andtransportation routes.

5. Since hotels primarily relies on business travelers, which hoteltypically experience low occupancy rates on the weekdays?


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Career Opportunities in

the Lodging Industry3.3


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Developing a Career in the LodgingIndustry

Certificates and diploma programs areoffered by high schools and business.

Work experience, associations and professional

trade organizations offer programs and events thatcan help you further your career.

While most lodging establishments perform thesame basic functions, the number and type of

employees at each property will depend onproperty size and other factors


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AdministrativeGM= responsible for overall lodging

establishment, have a bachelors degree and at

least 10 years work experience

Assistant General Manager= helps carry outthe GMs plans and serves as a liaison between

management and staff. Reports to GM

Resident Manager= supervises front officeoperations and reservations and is responsible

for emergencies twenty-four hours a day whenthe GM is not on duty.

Executive Assistant Manager= responsible

for all room rentals.


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Accounting and FinancialManagement Back Office

Controller= manages the accountingdepartment, participates in long-term financialplanning, and provides daily financial reports to

management. Smaller facilities often share theaccounting responsibilities among the GM.

Management Information Systems (MIS

supervisor= computer specialist responsiblefor solving computer-related problems andmaking sure computer systems are running as

efficiently as possible.


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Human resources

HR= responsible for interviewing,selecting, recruiting, training, andevaluating performance of the operations

staff. Motivating staff

Providing pay increases

Establishing employment policies Administration of labor laws


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Marketing and Sales(Sell rooms and facilities by creating contracts with guest,

business and people involved in the travel industry)

Marketing director= responsible for generatingnew business, organizing special events andconducting market research.

Convention manager= plans meetings,determines rates, and sells the facilitys banquetservice.

Convention sales manager= brings in the

business by promoting the establishment as asite for conferences, seminars, and meetings.(larger properties also have positions such astour and travel sales manager and corporatesales manager)

Front Office


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Front OfficeFront office is the heart of all lodging properties. It has four main

responsibilities. 1. check-in 2. reservations 3. information 4. checkout

Front desk manager= (heading the department) He or she

prepares budgets, maintains cost-control systems, and forecastroom sales. A good communicator and supervisor, oversees ateam of people

Desk clerk= greets and registers guests, and performs allcheck-in functions (including blocking rooms, verifying

information and providing details of room rates and availability) Reservations manager= oversees the reservations function

and managers a number of full-time reservations Bell captain= managers an number of employees, including

bellhops, door attendants and valet parking

Concierge= specializes in providing a wide range ofinformation services (answer questions, books restaurantreservations, make arrangements for car rentals, obtainstheater tickets and more)

Night auditor= works the evening shift, posting changes not

reordered during earlier shifts and balancing daily financialtransactions


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Housekeeping(One of the most important departments, often the largest, works

closely with front office personnel and maintains public areas)

Executive housekeeper= oversees thedepartment by hiring, training, scheduling,and directing staff; purchasing and

maintaining an inventory of cleaningsupplies and equipment and settingcleaning priorities

Room attendants= employees whoactually clean guest rooms


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Engineering and Facility Maintenance(ensures that all mechanical systems are safe and in proper working order)

Chief engineer= plans and organizes thetasks to be carried out by the department(administrative duties include budgeting,

coordinating and supervising repair andmaintenance orders, and negotiatingcontracts oversees the maintenance)

Often train other employees to conserve energy

and save on utility costs Provide advice about equipment maintenance and

environmental control


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Security(Emphasis is on preventing problems, protect guests, large

establishments, hire off-duty police officers)

Security chief= extensive lawenforcement training, work with thedirector of human resources, goal is to

minimize theft Provides on-going training

Train security officers

Some security officers dress in plain-clothes otheroffices place guards in visible locations where theycan see everyone who enters and leaves thefacility.


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Food and Beverage

Food and beverage director=supervises the most labor-intensivedepartment of a full-service lodging

operation Manages the formal dining room, coffee shop and

lounge, manager also directs the hotels banquet,

catering and room service

Executive chef works with a sous chef and otherchefs to provide quality meals and refreshmentsfor hotel's guests


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Questions

1. The following list, please tell me the jobfunction of each lodging position.

2. assistant general manager chief engineer3. chief engineer night auditor

4. room attendant human resourcesdirector

5. convention manager

2. Tell me what an executive housekeeper is in

charge of?3. Tell me the four main responsibilities of a frontoffice operations.

4. Tell me what a concierge is?


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Property Management

Systems and Room Rates3.4


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General Management

Property management systems= arecomputer software programs that are designedto specifically for the lodging industry.

PMS computer program eliminates the need to performthe same tasks over and over.

For a manager a PMS provides fast and accurateinformation and allows for improved control over theoperation

PMS can connect accounting systems, reservations andregistration databases, housekeeping room statusrecords and marketing research


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Guests Account Management

Customer service and satisfaction are thegoals of every lodging establishment

Guest folio= record of guest charges andpayments (chares added to account)

Lodging operations now feature electroniccheckout systems that allow guests to use

their in-room television remotes to reviewtheir folios, or slip a bill under the door


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Rooms Management

To lodging property departments Front office operations

Housekeeping

Room Status

ReservationsIf a room is available it will read open,confirmed indicates room has been reserved, guaranteedrooms are usually prepaid, repairmeans the room is

unavailable

Housekeepingoccupied, available, stay over, on charge (guest havebeen checked out, but room not cleaned), out of order


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Reservation Management

Central reservation system (CRS) guestcall with toll free #, sometimes hooked upwith airlines

Room inventory (total number of roomsthat a property has to sell)

Block rooms room unavailable

Rooms forecast order to anticipate room

inventory levels, managers ask for a forecast No-shows

Overbook rooms

Under stays guests who leave before their

anticipated date of departure


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Yield Management

Yield Management allows managers tochange room rates

High Demand raise rates, limit cheaper rooms,

block out rooms to ensure minimum stay Low Demand lower rates, seek business,

promote


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Setting Room Rates

Room rates vary considerably dependingon a variety of factors, includingconstruction, real estate cost, level of

luxury, type of bedding and time of yearMany methods for setting room rates, rule

of thumb method suggest that room ratesshould be set at $1 for every $1,000 ofconstruction cost

Ex. If a new hotel is built at $50,000 per room, rat shouldinitially be $50.00


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Hubbart Formula(Setting Room Rates Formula)

1. Operating expenses which are the costs of running theestablishment

2. Desired return on investment (ROI) which is the money abusiness hopes to make

3. Other income which is earned in various department (food,catering)

4. Projected room sales forecasting5. (operating expense + desired (ROI)) other income6. Projected room sales = room rate7. Ex. Operating expense are $3,000,000; desired ROI $2,00,00; additional income

$300,00; projected room sales $100,00 what should the room rate be??

8. ($3,000,000 + $2,000,000) - $300,0009. $100,000 = $47.00


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Different Room Rates

Complimentary

Government rates

Airline/agent

Day rates

Weekly rates

Family rates

Educational rates

Local business rates


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Questions

1. Use the hubbart formula to set a room rategiven the following information

1. Projected room sales: $100,0002. .Desired return on investment: $3,000,0003. Operating expenses: $4,000,0004. Other income: $600,000

2. Which rate category would most likely apply tovacation travelers reserving a hotel roomduring the high season?

3. A guest uses his in-room TV remote to checkout. This convenient checkout procedure ismade possible through the lodging property'swhat?

{3725b759-9f64-4e45-83b6-b230fa7c03a1}ch. 3 lodging industry

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