Lodging: Meeting Guest Needs

Chapter 9

Copyright © 2010 by John Wiley & Sons, Inc. All Rights Reserved

LODGING

• The lodging industry has been in existence ever since the first traveler looked for a place to spend the night (thousands of years ago)

• Over the years, these facilities have evolved and have been known as hotels, motels, inns, taverns, ordinaries, etc.

• We use the term “lodging” to characterize the overall category of facilities

LODGING TODAYThe 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

• Structures built specifically for overnight accommodation have been around for thousands of years dating back to Mesopotamia which was a center for commerce

• Hotels in the US date back to the late 1700s and the early 1800s including hotels in Boston, New York, Chicago, and Philadelphia

• Important features of early hotels included location and accessibility to transportation

THE EVOLUTION OF LODGING

• “Grand” hotels were later built in resort areas, city centers, and along transportation routes – Waldorf Astoria, Palmer House, Tremont Hotel

• The Tremont (in Boston) was the first to offer guests their own room!

• Other “Grand” hotels were built in the 1800s and early 1900s, each offering a new amenity or feature

THE EVOLUTION OF LODGING

• First developed in California in 1925, motels (Motor Hotels) are a relatively recent development

• Holiday Inn was the first well known chain of “motels” built in the US (1952)

• Holiday Inn was started by Kemmons Wilson after a family vacation

• There have since developed many different types of lodging facilities focusing on different customer needs (example: guest suites)

CRITERIA FOR CLASSIFYING HOTELS

• Price (or service)

• Function• Location• Market

segment• Distinctiveness

of style or offerings

HOTELS CLASSIFIED BY PRICE

• Limited-service hotels• Select-service• Full-service hotels• Luxury hotels

CLASSIFYING HOTELS BY PRICELIMITED-SERVICE 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, Rodeway Inn, and Fairfield Inn

CLASSIFYING HOTELS BY PRICESELECT-SERVICE HOTELS

• Relatively new addition to lodging; akin to addition of fast-causal restaurants in the food service sector

• With 100 to 200 guest rooms, focus is on value and a cheaper alternative to full-service properties

• Hot breakfast service and sometimes other food service is offered along with limited meeting space

CLASSIFYING HOTELS BY PRICEFULL-SERVICE 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

CLASSIFYING HOTELS BY PRICELUXURY 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 Ritz-Carlton, Four

Seasons, and Fairmont

CLASSIFYING HOTELS BY FUNCTION

• Convention hotels– Typically more than 500 rooms – Often located near convention centers

• Commercial hotels– Smaller than convention hotels with 100 to

500 guest rooms– Typically in downtown locations

CLASSIFYING HOTELS BY LOCATION

• Downtown hotels• Suburban hotels

– Typically have 200 to 350 guest rooms and interior corridors

• Highway/interstate hotels– 100 to 250 guest rooms

• Airport hotels– 250 to 550 guest rooms

HOTELS CLASSIFIED BY MARKET SEGMENT

Where different types of hotels have been built to respond to specific traveler needs

Executive conference centers Resorts Casino hotels Health spas Vacation ownership

CLASSIFYING HOTELS BY OFFERINGS

• All-suite hotels• Extended stay hotels• Historic conversions• Bed and breakfast

inns• Boutique hotels

The beautifully restored boutique hotel, the Regent Wall Street

PRINCIPAL CUSTOMER TYPES

• Leisure or vacation travelers• Transient business travelers ─ individual

traveling alone• Business travelers attending conferences• International travelers• SMERF – social, military, educational, religious,

and fraternal

WHAT’S CHANGING?

• Increasing competition (subject of Chapter 12)• In-room technology• Unique hotels• Increased service levels• Blurring of segments

WHAT’S CHANGING?

• Increased business travel• Increased occupancy in city hotels• Rising room rates• Condo/time share conversions