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CHAPTER 6HOSPITALITY ANDRELATED SERVICES

Learning Objectives

·      Study the lodging industry, itsancient origins, its associations, names of leading companies, its economics,and vital role.

·      Appreciate the immensity of therestaurant-food service industry.

·      Learn the current trends inresorts and timesharing mode of operation.

·      Discover why meetings andconventions as well as meeting planners are so important to tourism.

Chapter Outline

      Outline Summary              Points of Emphasis

1.   Introduction                        The lodging business goesback to antiquity. First, accommodation was part of private dwellings, thencaravansaries and early inns, then monasteries. Today’s hotels often providemeeting rooms, convention facilities, restaurants, bars, entertainment, shops,sometimes gaming, health clubs, pools, exercise rooms, etc.

2.   The lodging industry           World growth is about 2.5 percent peryear, occupancy rates about 65 percent but vary greatly. This includes hotels,motels, suites, and resort properties. Because of overbuilding, the U.S. Hotelindustry lost about $14 billion between 1986 and 1992. Since 1993 the industryhas been enjoying profits. Hotels are concentrated in Europe and North Americawith 71.7 percent of the world’s supply. Trend is to build new hotels in AsiaPacific, Eastern Europe, and states of former Soviet Union. Smith TravelResearch (www.strglobal.com) is an excellent source of lodging information. Thefive leading chain companies world-wide are InterContinental Hotels Group, WyndamHotel Group, Marriott International, Hilton Hotels Corp and Accor.

3.   Bed and breakfast                There are over 20,000 B & Bhomes in the U.S.  B & Bs provideboth luxury and economy accommodations.

4.   Resorts and timesharing       The American Resort DevelopmentAssociation (ARDA) is the preeminent source of information about timesharingand vacation owners. ARDA reports there were 1,548 timeshare resorts in theUnited States in 2009, representing about 170,200 units for an average resortsize of 110 units.

5.   Lodging Organizations       In the U.S. the largest is the AmericanHotel and Lodging Association (AH&LA). Among others are the InternationalHotel Association, Caribbean Hotel Association, and International Youth HostelFederation.

6.   The food service industry    Like lodging, a very old business, and usuallypart of it. Restaurant is a French word meaning restorative. Early food servicewas provided in the English taverns and in ordinaries, taverns and inns alongstagecoach routes in the U.S. French service was often used in the old New YorkCity restaurants. Menus can be a la carte or table d’ hote. Eating and drinkingplaces are big business, $580 billion (2010) and employing more than 12.7million people. Fast food chains have enjoyed great success and franchising hasbeen used extensively.

7.   Restaurant organizations     There are state restaurant associations andthe National Restaurant Association (NRA). The NRA’s goals are: politicalaction to protect their industry; information/education; and promotion. Theysponsor the NRA Educational Foundation which provides many study aids for thosein this business.

8.   Meetings Industry               With the growth of more corporateand association meetings, there has developed a demand for professionalplanners. They consult with a sponsor on needs for a successful meeting or conventionand are concerned with such matters as negotiating with hotels for services,with airlines, tour companies for tours, after the convention activities, andplanning meetings and seminars.

9.   Meetings and conventions   A huge market in the U.S. made up of over 1.8million meetings. The total U.S. market is estimated at $263 billion.

10. Miscellaneous Services       Providing needed services to tourists andtourist facilities are such organizations as hospitals, medical and dentalfirms, police, sanitary trash removal, laundries, maintenance firms,advertising agencies, public relations firms, magazine, travel writers, etc.

Chapter Overview and Suggestions

Thehospitality industry is of great interest to a large percentage of tourismstudents. They can visualize being a part of this exciting and creative kind ofbusiness. Also, it is found practically everywhere. Thus, positions might befound in any of the most desirable places to live. Hotels and restaurants havea great variety of jobs available that should fulfill almost anyone’s specialtalents and interests – from being a renowned chef in New Orleans to a famousski instructor at Vail.

There are a number of companies that provide data on thehotel and motel businesses, plus the United States Bureau of the Census. In theU.S. it is a $127.2 billion industry with 50,800 properties and 4.76 millionrooms in 2009.

Trends include providing more suites, more completefacilities, and the remodeling of fine older properties. If there is anespecially attractive and outstanding property in your locality, arrange for afield trip to visit it. Usually the manager or assistant will be glad to talkto the class.

Chain or system companies are very important and Table6.1 provides details on the top 25 companies. Franchising is a common ownershiparrangement.

Discuss the J.W. Marriott, Jr., profile with thestudents and his view of the future.

Bed and breakfast homes seem to be growing and have aworld-wide reservation system.

The American Hotel and Lodging Association is the mostprominent industry group. It is a federation of hotel and motel associationslocated in the 50 states and District of Columbia. It also sponsors theEducational Institute of AH&LA in Lansing, Michigan.

Resorts that operate as a timesharing organization arewidespread globally and are popular, especially in the United States.

Food service is the giant of the hospitality industrywith 2010 industry sales of $580 billion. Growth has been phenomenal over thepast two decades. Fast food chains have enjoyed particular success andfranchising is a common type of ownership.

The National Restaurant Association (NRA) is the mostimportant group in the U.S. with over 20,000 members. The work of theassociation is aimed at (1) political action, (2) information and education,and (3) promotion. They sponsor the NRA Educational Foundation whichcontributes to information and training throughout the industry.

With the growth of meetings attendance and conventions,there has arisen a great need for professional meeting planners. Such plannersprovide consultation, negotiate hotel and airline services, and even negotiatewith firms in foreign countries for hotels and other needed services andfacilities. Several associations serve this specialty. These include the MeetingPlanners International (MPI) and the Society of Company Meeting Planners(SCMP).

Meetings and conventions are big business with $263billion in expenditures. Discuss the Convention Industry Council (CIC) 2010economic impact study with your students.

Key Concept Definitions

AMERICANHOTEL AND LODGING ASSOCIATION: The premier tradegroup in the U.S. is afederation of state lodging associationsincluding D.C., Puerto Rico, and U.S. Virgin Islands. Sponsors the EducationalInstitute in Michigan.

BEDAND BREAKFAST: A small business type ofovernight facility, which has a worldwide reservation system.

CULINARYTOURISM: The pursuit of unique and memorableculinary experiences of all kinds while traveling.

CLASSIFICATIONOF HOTELS AND MOTELS: Several systems are used.Probably the easiest understood is the five-star system with five starsindicating a top quality hotel and one star more modest accommodation. Othersare deluxe, superior, and good. Another is super deluxe, first class, andreasonable. There is also the A, B, C, D, or E classification. Accommodationscan also be classified according to location such as urban, suburban, highway,airport, resort, spa or by type of operations such as transient or residentialhotels. Others are: full-service hotel, limited-service, suite, or conventionhotel.

FASTFOOD COMPANIES: A major part of the food serviceindustry with about three fourths being franchised. Best known are KentuckyFried Chicken (KFC), McDonald’s, Wendy’s, Burger King, Pizza Hut, Taco Bell,Hardees, and Arby’s.

FOODSERVICE INDUSTRY: The giant of the hospitalityindustry, with 2007 sales of $537 billion. Franchising is a common ownershippattern. Fast food companies are a major portion of this industry and U.S.firms are found in many foreign countries. The industry employs over 12.8million people and is developing more new jobs than any other retail industry.

FRANCHISING: A contractual agreement granting the right to use a trade nameand/or goods and services in a particular territory. Involves a continuingrelationship in which a franchisor (the parent company) provides right to usethe trademark plus management assistance in return for financial considerationsfrom a franchisee (owner of the individual business).

LARGESTCORPORATE HOTEL CHAIN COMPANIES: Table 6.1documents the top 25 hotel chain or systems companies.

LODGINGINDUSTRY: World’s oldest commercial business. Worldhotel room inventory now grows about 2.5 percent a year, with occupancypercentages averaging about 65 percent. Europe and North America have thelargest concentrations of hotel properties, about 72 percent of the world’ssupply.