Ch. 3 The 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 the U.S. Planes,
Trains and Automobiles

• Lodging industry in the U.S. has always been
  strongly 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 in the U.S. designed specifically as a
  hotel.
• From that point on, throughout the 1800s lodging
  properties began to flourish.
• The Tremont House, the first of the grand hotels,
  was built 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,
  and foodservice facilities located near railway.
• Near the turn of the century, Conrad Hilton, who
  was a banker in New Mexico, purchased is first
  hotel.
• Other famous hotels were build during the early
  part of the twentieth century, including the Ritz
  Carlton in Boston, 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
  high occupancy rates usually at least 90)
• 1950s cross-country vacations became popular with
  the automobile and freeway system
• 1958 airlines became popular

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Lodging Operations Organization

• Front-of-the-House vs. Back-of-the-House
• Typical lodging operation can be divided between
  its administrative departments and service
  departments
• Administrative departments manage the business
  responsibilities such as accounting, human
  resources and training, and marketing and sales.
• Service departments are responsible for serving
  the guest directly.

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Administrative Departments

• General Management (GM) person in charge of
  lodging establishment (other managers report
  directly to the GM)
• Accounting and Financial Management keeps track
  of overall profits, records sales, and calculates
  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 first
  impression, 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 and
  maintain the operations mechanical equipment
• Security protecting guest, employees and
  property, developing and following all emergency
  procedures
• Food and Beverage one of the most demanding
  arrears

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Questions

• Historically, the lodging industry has been
  closely tied to the ________industry?
• What mode of transportation was invented in the
  early 1800s?
• During which decade in the U.S. did the lodging
  industry experience the closing of many hotels?
• List the four arrears of administrative
  departments and what they do?
• List the five areas of service departments and
  what they do?

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Organization of the Lodging Industry

• 3.2

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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
  leisure travelers 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, copies personal computes etc.
• Most important factor considered when selecting a
  lodging facility is room cleanliness

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At Your Service Lodging Establishments for All

• Lodging properties can be classified in many
  ways by the level of service provided, rate
  charged, amenities offered
• Amenity service or facility within the lodging
  operation that guests may use or enjoy without
  having to leave the hotel
• Full-service properties cater to travelers in
  search of a wide range of conveniences. (offer
  larger rooms, well-trained staff, plenty of
  amenities)
• Luxury properties hotels that offer
  top-of-the-line comfort and elegance

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At Your Service Lodging Establishments for All

• Economy lodging offers clean, low-priced
  accommodations primarily to traveling
  salespeople, senior citizens,, and families with
  moderate income (sm. staff, simple rooms)
• Mid-price facilities between full-service and
  economy sectors
• All-Suite properties fastest growing segment,
  offer apartment style facilities
• Resorts (spares no expense), feature extensive
  facilities for vacationers who are looking for
  recreational activates and entertainment
• Bed and Breakfast guest who enjoy quaint, quiet
  accommodations 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 influential factors
  contributing to the success of lodging facility
• Airport facilities
• Downtown (primarily for business travelers, tend
  to charge higher rates)
• Suburban properties (travelers who wanted to
  attend downtown events but didnt want to spend
  the night in the city)
• Roadside motes (meet the needs of vacation and
  business travelers)
• Resorts (vacation arrears)

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Facility Rating Systems

• Several organizations rate quality of lodging
  establishments (AAA diamonds and Mobil Travel
  Guides rate with stars)
• AAA most widely recognized
• One diamond functional accommodations (minimum
  standards)
• Two Diamonds noticeable enhancements (décor 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

• 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
• What type of hotel is most likely to provide
  conference and meeting rooms.
• Florist shop that operates in a hotel's lobby is
  known as a?
• __________facilities are often constructed far
  from cities and transportation routes.
• Since hotels primarily relies on business
  travelers, which hotel typically experience low
  occupancy rates on the weekdays?

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Career Opportunities in the Lodging Industry

• 3.3

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Developing a Career in the Lodging Industry

• Certificates and diploma programs are offered by
  high schools and business.
• Work experience, associations and professional
  trade organizations offer programs and events
  that can help you further your career.
• While most lodging establishments perform the
  same basic functions, the number and type of
  employees at each property will depend on
  property size and other factors

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Administrative

• GM responsible for overall lodging
  establishment, have a bachelors degree and at
  least 10 years work experience
• Assistant General Manager helps carry out the
  GMs plans and serves as a liaison between
  management and staff. Reports to GM
• Resident Manager supervises front office
  operations and reservations and is responsible
  for emergencies twenty-four hours a day when the
  GM is not on duty.
• Executive Assistant Manager responsible for all
  room rentals.

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Accounting and Financial Management Back Office

• Controller manages the accounting department,
  participates in long-term financial planning, and
  provides daily financial reports to management.
  Smaller facilities often share the accounting
  responsibilities among the GM.
• Management Information Systems (MIS supervisor
  computer specialist responsible for solving
  computer-related problems and making sure
  computer systems are running as efficiently as
  possible.

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Human resources

• HR responsible for interviewing, selecting,
  recruiting, training, and evaluating 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 generating
  new business, organizing special events and
  conducting market research.
• Convention manager plans meetings, determines
  rates, and sells the facilitys banquet service.
• Convention sales manager brings in the business
  by promoting the establishment as a site for
  conferences, seminars, and meetings. (larger
  properties also have positions such as tour and
  travel sales manager and corporate sales manager)

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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 forecast room sales. A good
  communicator and supervisor, oversees a team of
  people
• Desk clerk greets and registers guests, and
  performs all check-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
  of information services (answer questions, books
  restaurant reservations, make arrangements for
  car rentals, obtains theater tickets and more)
• Night auditor works the evening shift, posting
  changes not reordered during earlier shifts and
  balancing daily financial transactions

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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 the department
  by hiring, training, scheduling, and directing
  staff purchasing and maintaining an inventory of
  cleaning supplies and equipment and setting
  cleaning priorities
• Room attendants employees who actually 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 the tasks to
  be carried out by the department (administrative
  duties include budgeting, coordinating and
  supervising repair and maintenance orders, and
  negotiating contracts 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 law enforcement
  training, work with the director of human
  resources, goal is to minimize theft
• Provides on-going training
• Train security officers
• Some security officers dress in plain-clothes
  other offices place guards in visible locations
  where they can see everyone who enters and leaves
  the facility.

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Food and Beverage

• Food and beverage director supervises the most
  labor-intensive department 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 other
  chefs to provide quality meals and refreshments
  for hotel's guests

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Questions

• The following list, please tell me the job
  function of each lodging position.
• assistant general manager chief engineer
• chief engineer night auditor
• room attendant human resources director
• convention manager
• Tell me what an executive housekeeper is in
  charge of?
• Tell me the four main responsibilities of a front
  office operations.
• Tell me what a concierge is?

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Property Management Systems and Room Rates

• 3.4

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General Management

• Property management systems are computer
  software programs that are designed to
  specifically for the lodging industry.
• PMS computer program eliminates the need to
  perform the same tasks over and over.
• For a manager a PMS provides fast and accurate
  information and allows for improved control over
  the operation
• PMS can connect accounting systems, reservations
  and registration databases, housekeeping room
  status records and marketing research

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Guests Account Management

• Customer service and satisfaction are the goals
  of every lodging establishment
• Guest folio record of guest charges and
  payments (chares added to account)
• Lodging operations now feature electronic
  checkout systems that allow guests to use their
  in-room television remotes to review their
  folios, or slip a bill under the door

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Rooms Management

• To lodging property departments
• Front office operations
• Housekeeping
• Room Status
• Reservations If a room is available it will read
  open, confirmed indicates room has been reserved,
  guaranteed rooms are usually prepaid, repair
  means the room is unavailable
• Housekeeping occupied, available, stay over, on
  charge (guest have been checked out, but room not
  cleaned), out of order

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Reservation Management

• Central reservation system (CRS) guest call
  with toll free , sometimes hooked up with
  airlines
• Room inventory (total number of rooms that 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 to change 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 depending on a
  variety of factors, including construction, real
  estate cost, level of luxury, type of bedding and
  time of year
• Many methods for setting room rates, rule of
  thumb method suggest that room rates should be
  set at 1 for every 1,000 of construction cost
• Ex. If a new hotel is built at 50,000 per room,
  rat should initially be 50.00

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Hubbart Formula(Setting Room Rates Formula)

• Operating expenses which are the costs of
  running the establishment
• Desired return on investment (ROI) which is the
  money a business hopes to make
• Other income which is earned in various
  department (food, catering)
• Projected room sales forecasting
• (operating expense desired (ROI)) other
  income
• Projected room sales room rate
• 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??
• (3,000,000 2,000,000) - 300,000
• 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

• Use the hubbart formula to set a room rate given
  the following information
• Projected room sales 100,000
• .Desired return on investment 3,000,000
• Operating expenses 4,000,000
• Other income 600,000
• Which rate category would most likely apply to
  vacation travelers reserving a hotel room during
  the high season?
• A guest uses his in-room TV remote to check out.
  This convenient checkout procedure is made
  possible through the lodging property's what?