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Hospitality Management Week 6

by: Brandon Notetaker

Hospitality Management Week 6 HOSP 1603

Marketplace > University of Arkansas > Hospitality > HOSP 1603 > Hospitality Management Week 6
Brandon Notetaker
GPA 3.5

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Chapters 9, and 10 Notes and Vocab
Intro to Hospitality Mgmt
Kelly Way
Class Notes
Hospitality and Business Management
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This 5 page Class Notes was uploaded by Brandon Notetaker on Sunday October 2, 2016. The Class Notes belongs to HOSP 1603 at University of Arkansas taught by Kelly Way in Fall 2016. Since its upload, it has received 12 views. For similar materials see Intro to Hospitality Mgmt in Hospitality at University of Arkansas.

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Date Created: 10/02/16
Hospitality Management Week 6 (Week of 9/25/16) Chapter 9: Lodging: Meeting Guest Needs Chapter 9  LODGING  1. The lodging industry has been in existence ever since the first traveler looked for a place to spend the night (thousands of years ago)  2. Over the years, these facilities have evolved and have been known as hotels, motels, inns, taverns, ordinaries, etc.  3. We use the term “lodging” to characterize the overall category of facilities  LODGING TODAY  1. The lodging industry is a huge segment, by any measure   Over 49,500 properties   Over 4.6 million guest rooms   Generates over $40.6 billion in revenues   Supports more than 7.5 million jobs  THE EVOLUTION OF LODGING  1. Structures built specifically for overnight accommodation have been around for thousands of years dating back to Mesopotamia which was a center for commerce  2. Hotels in the US date back to the late 1700s and the early 1800s including hotels in Boston, New York, Chicago, and Philadelphia  3. Important features of early hotels included location and accessibility to transportation  4. “Grand” hotels were later built in resort areas, city centers, and along transportation routes – Waldorf Astoria, Palmer House,  5. The Tremont (in Boston) was the first to offer guests their own room!  6. Other “Grand” hotels were built in the 1800s and early 1900s, each offering a new amenity or feature 7. First developed in California in 1925, motels (Motor Hotels) are a relatively recent development 8. Holiday Inn was the first well known chain of “motels” built in the US (1952) 9. Holiday Inn was started by Kemon’s Wilson after a family vacation  10. There have since developed many different types of lodging facilities focusing on different customer needs (example: guest suites)  CRITERIA FOR CLASSIFYING HOTELS  1. Price (or service), Function, Location, Market segment, Distinctiveness of style or offerings  HOTELS CLASSIFIED BY PRICE  1. Limited­service hotels, Select­service, Full­service hotels, and Luxury hotels  CLASSIFYING HOTELS BY PRICE  1. Limited­Service Hotels   Usually no public meeting space and limited food and beverage   Typical ADR is between $80.00 and $90.00 and the average number of rooms is 122   Examples include Holiday Inn Express, Comfort Inn, and Fairfield Inn  2. Select­Service Hotels   Relatively new addition to lodging; akin to addition of fast­causal restaurants in the food service sector   With 100 to 200 guest rooms, focus is on value and a cheaper alternative to full­service properties   Hot breakfast service and sometimes other food service is offered along with limited meeting space  3. Full­Service Hotels   Have a wide range of facilities and services including public meeting space and choice of food and beverage   Typical ADR is over $150.00   Business and leisure travelers represent 57.3 percent of room sales   Average size is 272 rooms  4. Luxury Hotels   Have a wide range of facilities and services offered in an upscale environment including concierge and multiple dining options   Rooms number between 150 and 500   Higher ratio of employees to guest room   Typical ADR is over $225.00   Industry leaders include Ritz­Carlton, Four Seasons, and Fairmont  CLASSIFYING HOTELS BY FUNCTION  1. Convention hotels   Typically, more than 500 rooms   Often located near convention centers  2. Commercial hotels   Smaller than convention hotels with 100 to 500 guest rooms   Typically, in downtown locations  CLASSIFYING HOTELS BY LOCATION  1. Downtown hotels  2. Suburban hotels   Typically have 200 to 350 guest rooms and interior corridors  3. Highway/interstate hotels   100 to 250 guest rooms  4. Airport hotels   250 to 550 guest rooms  HOTELS CLASSIFIED BY MARKET SEGMENT  1. Where different types of hotels have been built to respond to specific traveler needs  Executive conference centers, Resorts, Casino hotels, Health spas, and Vacation ownership  CLASSIFYING HOTELS BY OFFERINGS  1. All­suite hotels 2. Extended stay hotels 3. Historic conversions 4. Bed and breakfast inns 5. Boutique hotels. PRINCIPAL CUSTOMER TYPES  1. Leisure or vacation travelers  2. Transient business travelers ─ individual traveling alone  3. Business travelers attending conferences  4. International travelers  5. SMERF – social, military, educational, religious, and fraternal  WHAT’S CHANGING?  1. Increasing competition (subject of Chapter 12)  2. In­room technology  3. Unique hotels  4. Increased service levels  5. Blurring of segments  6. Increased business travel  7. Increased occupancy in city hotels  8. Rising room rates  9. Condo/time share conversions Chapter 9 Vocab 1. Ordinaries – Inns of colonial America. Named because they provided respite for the ordinary person, typically provided a meal. 2. Limited Service Hotels – typically offer guest rooms only. 3. Full­service hotels – offer a wide range of facilities and amenities. 4. Luxury Hotels – At the top of price category. Upscale decor and furniture. 5. Convention hotels – made for large amounts of groups. 6. Commercial Hotels – in comparison to convention hotels less public space, smaller meeting and function space, fewer food and beverage  outlets, and limited recreational amenities. 7. Executive conference centers – well­designed learning environments for meetings. Made with audiovisual and technical support. 8. Vacation Ownership – timeshares and vacation intervals 9. All­Suite Hotels – Guest rooms are much larger than average hotels 10. Boutique hotels – Range all price spans, and looks/feels like a more traditional lodging. 11. Corporate market segment – consists of for­profit companies and therefore may have more money than non­profit or other business  segments. 12. Association market segment – consists of individuals or companies that have banded together in sharing common purpose or goals. 13. SMERF – another market segment for most lodging properties. Called this because it originates from 5 sources: Social, Military,  Educational, Religious, and Fraternal. 14. Employers of choice – obtain this from customers by providing better benefit packages, more career development opportunities, increased  recognition, and mentoring. 15. Internal Customer – employees of the hotel industry Hospitality Management Week 6 (Week of 9/25/16) Chapter 10: Hotel and Lodging Operations LODGING OPERATIONS: Hotels are generally divided into three major functional areas  1. Rooms division   includes front desk, reservations, uniform services (security, etc.), and housekeeping  2. Food and beverage department   includes restaurants, bars, banquets and room service  3. staff and support departments   includes accounting, engineering, marketing, human resources, and contracted areas ROOMS DIVISION 1. The heart of the house   The main business of the hotel and the main source of revenue  rooms can contribute 70 percent or more to overall revenue and even more to profit 2. The center of activity in the rooms division is the front office   it is overseen by the resident manager, front desk manager (or assistant general manager) and various department heads   responsibilities include: checking guests in, checking them out, securing payment, listening to complaints, communicating with other  departments, determining room availability, and selling additional rooms RESERVATIONS DEPARTMENT 1. Reservations can be made by the guest via other methods (more and more online) but many requests are still made through the hotel’s  reservation department 2. Reservations must maintain contact with other departments as well as other reservations channels to be able to forecast available rooms 3. The reservations department attempts to maximize: Room rate, and occupancy rate. this is known as yield management –maximizing these two at any given time. Reservations departments must consider city wide events, competition, minimum stays, etc. HOUSEKEEPING 1. The essential requirement that guests have is to be able to check into a clean room  2. Housekeeping department is responsible for: cleaning of guest rooms, stocking essential supplies and amenities, laundry (sometimes) and  maintenance of public areas  3. housekeeping is one of the largest departments in the hotel (up to 50 % of all employees) 4. the executive housekeeper is the head of the department   he or she must be adept at scheduling, coordinating, managing people, etc.  5. room attendants are responsible for cleaning of individual guestrooms  6. housekeepers work from a rooms report, which provides them with the status of all guest rooms from which they can prioritize their work  7. the housekeeping department must know at any given time:   the occupancy of the hotel   the number of guests checking in   the number of guests checking out   the number of guests staying over   late check­outs, etc.  8. rooms can take as little as 15 minutes or as much as 1 hour to clean and prepare for the next guest  9. check­in and check­out times are based in large part on the time it takes to clean a room UNIFORMED SERVICES 1. The uniformed services department is another important department in the rooms division   bell staff, valet, security and concierge   the bell staff assists with luggage, acts as an escort, and answers questions   the valet assists with parking 2. the concierge is the resident expert in activities, events, restaurants, and attractions   the position of concierge is becoming more important as hotels try to offer a higher level of guest services   there is an international association for concierges (les chefs d’or)   sometimes this responsibility falls to the bell staff or the front desk clerks in smaller hotels SECURITY 1. Hotels are required to provide “reasonable care” of their guestswhich includes general security, locks and lighting and security of guest  belongings 2. New security measures that have been introduced in recent years include:   in­room safes, keyless locks (with magstrips), tighter security at the front desk, redesigned hotels where guests (and others) must pass  through the lobby FOOD AND BEVERAGE 1. The food and beverage department can contribute 15 to 20 percent of overall revenue  2. it should be a profit center but does not always make money for the hotel  3. this department is headed up by a food and beverage manager who oversees both front­of the­house and back­of­the­house functions 4. banquets –are often profitable for hotels.  Can support meetings and conferences or outside functions  5. some hotels are limiting what they offer and others are outsourcing  6. bars, room service, food production, and stewarding are other areas STAFF AND SUPPORT DEPARMENTS  1. Sales and marketing  responsible for “creating customers”   largely revolves around selling “blocks” of rooms   can be a large department in convention hotels specialized by market  2. accounting  role is moving beyond just bookkeeping  includes overseeing the “house ledger” and the “city ledger”  also, includes the night audit 3. Human resources  labor intensive industry requires progressive hr.  responsibilities include supporting line departments in all hr. related activities (hiring and recruiting, training, staffing, etc.) 4. Engineering   oversees heating, cooling, water, lighting, telecommunications, energy management, electric, other FINANCIAL MANAGEMENT 1. Income and expenses 2. revenue and profit 3. changes in income and expenses over time 4. outsourcing as a strategy to cut costs 5. cost of maintaining a hotel KEY OPERATING RATIOS 1. Occupancy percentage =   rooms sold ÷total rooms available   example: 500 room hotel sells 300 rooms  o 300/500=60%  2. average rate =   dollar sales ÷number of rooms sold   example: $18,000 in sales  o $18000/300=$60 3. Number of guests per occupied room =   number of guests ÷number of occupied rooms  o 400/300=1.33  4. RevPAR–revenue per available room=    rooms revenue ÷available rooms  o 18000/200 =90  5. average rooms cleaned per room attendant day=   number of rooms occupied ÷number of eight­hour shifts  o 300/30=10 CAREER ENTRY POINTS 1. Front office, Accounting, sales and marketing, food and beverage Chapter 10 Vocab 1. Rooms Department – Executive house keeper oversees this department 2. Night Auditor – Desk clerk with special accounting responsibilities. 3. Auditing process – Auditor compares the balanced owed to the hotel at the end of yesterday with today’s balance. 4. Property Management System (PMS) – improves operational efficiency by eliminating repetitive tasks and improves service by providing  information more quickly and accurately. 5. Support Areas – Departments of a hotel that go into maintaining the different systems of the hotel operations.  6. House ledger – located at the front desk made to keep bills owed by guests. 7. City Ledgers – Charges by guests posted after they have checked out and any charges by others (Restaurants) 8. Capital Costs – Fixed Costs include expenses such as the management fee, property taxes, and other municipal charges and insurance and  are a direct function of the cost of the building and its furnishings and fixtures. 9. Uniform System of accounts – Hotel accounting is generally guided by this. Identifies important profit centers as revenue departments. 10. RevPAR – Revenue per available room. Room Revenue divided by available rooms multiplied by AVG room rate. 11. Leverage – refers to the fact that a small amount of an investors capital often comes forth much larger amounts of money lent by banks or  insurance companies on a mortgage.


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