Summary Slide z Modern Hotel Innovators z Lodging

Summary Slide z Modern Hotel Innovators z Lodging Management Associations z Hotel Revenue Sources z Profit Margin–Room Cost z Profit Margin–Food Cost z Opportunity Cost z Captive Audience Quotient z Internet Exercises z Hotel Web Sites Figure 1 -1

Modern Hotel Innovators z. Ellsworth Statler z. Conrad Hilton z. J. W. Marriott z. Kemmons Wilson z. Jay Pritzker z. What three innovators emerged at about the same time in history? Figure 1 -2

Lodging Management Associations z Owner-operated z Owner-managed z Independent z Franchised z Management contract z What are the similarities and differences between franchising and management contract? Figure 1 -3

Shared Benefits Brand Recognition CRS National Marketing Support Standard Operating Procedures Lodging Management Association Differences • Greater Quality Control • Higher Fee to Owners • Less Owner Control • Higher Employee Standards • Higher Performance Expectations Management Contracts • Less Quality Control • Lower Fee to Owners • Greater Owner Control • Varying Levels of Employee Experience and Training Franchising Figure 1 -4

Hotel Revenue Sources z. Sleeping Rooms z. Meeting/Function Space z. Outlets/Ancillary z. Why is this relationship so important? Figure 1 -5

#1 Selling as many sleeping rooms as possible Successful Hotel Equation + #2 Selling meeting/function space to utilize it’s best potential + #3 Maximizing the capacity of the outlets and ancillary profit centers through the selling of #1 and #2 Figure 1 -6

Profit Margin z. Room Cost Room Rate - Room Cost = Profit Margin Figure 1 -7

Profit Margin z. Food Cost = Purchase Price/Menu Price Figure 1 -8

Opportunity Cost z. Each night, when a room goes unsold, the hotel loses the opportunity to ever sell it again. A hotel cannot regain that opportunity. z. The “Empty Room Theory” states that once a room goes unoccupied, it is gone forever. z. Why does opportunity cost differ in catering/outlet food and beverage sales? Figure 1 -9

Captive Audience Quotient z. Applies to both outlet/ancillary sales and catering sales. z. A guest staying at a hotel is more likely, for convenience and other reasons, to choose at least once some outlet of the hotel (if it offer such services). z. Catering traffic at a hotel benefits by the captive audience quotient, also called the group catering contribution. Figure 1 -10

Chain Histories Internet Exercise y. In this chapter histories of Hilton, Marriott, Holiday Inn, and Hyatt were briefly discussed. y. Using the Internet (sample URLs are provided following the questions), choose a different hotel chain and obtain any printed materials you can about their beginnings and history. Answer the following questions: Figure 1 -11

Chain Histories Internet Exercise z. What is the name of the hotel chain you selected? z. When was the hotel chain established? z. What was the name of the first hotel in the chain? z. Where was it located? z. Who was the person or persons who started the chain? Figure 1 -12

Chain Histories Internet Exercise z. How many hotels are now in this chain? z. How long has this chain been in operation? z. What types of hotels does this chain operate? z. Where is the corporate office for this chain located? Has it changed locations? z. Has there been any mergers or acquisitions within this chain? Figure 1 -13

Chain Histories Internet Exercise z. Does this chain have more than one brand in its repertoire? z. What unique thing did you learn about this chain that you didn’t know before? z. Why did you choose this chain? z. Describe the hotel in this chain that you would most like to visit. z. Would you like to work for this hotel chain? Why or why not? Figure 1 -14

Chain Histories Internet Exercise z. Is this chain publicly traded? If so, what is the current stock price? z. What is the stock price history during the past 12 months? z. What factors have been involved in any fluctuations over the past three years? z. What is the current focus of this chain? z. What percentage of this chain’s properties are corporately owned? Figure 1 -15

Hotel Web Site Home Pages For this case study, try one of the following web sites: Accor Adam's Mark http: //www. accorhotel. com http: //www. adamsmark. com http: //www. sofitel. com Amerisuites http: //www. amerisuites. com http: //www. novotel. com ANA http: //www. mercure. com http: //www. ananet. or. jp/anahotels/e/ http: //www. ibishotel. com Aston http: //www. etaphotel. com http: //www. aston-hotels. com http: //www. hotelformule 1. com Best Western http: //www. motel 6. com http: //www. bestwestern. com http: //www. redroof. com http: //www. coralia. com/coralia/gb/index. htm Figure 1 -16

Hotel Web Site Home Pages Cendant http: //www. cendant. com http: //www. super 8. com/ctg/cgi-bin/Super 8# http: //www. knightsinn. com/ctg/cgi-bin/Knights. Inn http: //www. hojo. com/ctg/cgi-bin/Howard. Johnson http: //www. villager. com/ctg/cgi-bin/Villager http: //www. ramada. com/ctg/cgi-bin/Ramada http: //www. travelodge. com/ctg/cgi-bin/Travelodge Choice http: //www. choicehotels. com Dorint http: //www. dorinthotels. com Drury http: //www. druryinn. com Elegant Resorts http: //www. elegantresorts. com Fairmont http: //www. fairmont. com http: //www. cphotels. com/cp. asp? loc=corp Figure 1 -17

Hotel Web Site Home Pages Fiesta Americana Hyatt http: //www. fiestaamericana. com http: //www. hyatt. com Four Seasons Jameson http: //www. fourseasons. com/index. html http: //www. jamesoninns. com Golden Tulip http: //www. signature-inns. com/index. htm http: //www. goldentulip. com Loews Harrah's http: //www. loewshotels. com http: //www. harrahs. com/home. html Hilton http: //www. hilton. com/doubletree/index. html http: //www. hilton. com/conradinternational/index. html http: //www. embassy-suites. com http: //www. homewood-suites. com http: //www. hampton-inn. com www. redlion. com http: //www. hilton. com/hiltongardeninn/index. html Figure 1 -18

Hotel Web Site Home Pages Le Meridian http: //www. lemeridien-hotels. com http: //www. forte-hotels. com http: //www. heritage-hotels. com http: //www. posthouse-hotels. com Mandarin Oriental Metropolitan http: //www. mandarin-oriental. com/ http: //www. methotels. com Manhattan East Suite Hotels Nikko http: //www. mesuite. com http: //www. nikkohotels. com Marriott Noble House http: //www. marriott. com http: //www. noblehousehotels. com http: //www. renaissancehotels. com http: //www. courtyard. com http: //www. residenceinn. com http: //www. fairfieldinn. com http: //www. towneplacesuites. com/js/Default. asp http: //www. springhillsuites. com/js/Default. asp Figure 1 -19

Hotel Web Site Home Pages Omega http: //www. omegaresorts. com/omega_info/index. html Omni http: //www. omnihotels. com Outrigger Rosewood http: //www. outrigger. com http: //www. rosewoodhotels. com Park Place Royal http: //www. parkplace. com http: //www. royalhotels. com Radisson http: //www. radisson. com/RAD/Radisson. Home/0, 2509, , 00. html Red Carnation Sierra Suites http: //www. redcarnationhotels. com http: //www. sierrasuites. com Regal Sholodge http: //www. regalhotel. com/main. html http: //www. shoneysinn. com http: //www. millennium-hotels. com Ritz Carlton http: //www. ritzcarlton. com] Figure 1 -20

Hotel Web Site Home Pages Sonesta http: //www. sonesta. com/sonesta/sonweb 2. nsf Station http: //www. stationcasinos. com/home/default. asp Starwood SRS http: //www. starwoodhotels. com/ http: //www. srs-worldhotels. com http: //www. westin. com/main. taf Summit http: //www. sheraton. com/main. taf http: //www. summithotels. com http: //www. fourpoints. com/main. taf http: //www. stregis. com/ http: //www. luxurycollection. com/main. taf http: //www. whotels. com Swissotel http: //www. swissotel. com/index. html Figure 1 -21

Hotel Web Site Home Pages Super Clubs http: //www. superclubs. com Thistle http: //www. thistlehotels. com Trump Wyndham http: //www. trump. com http: //www. wyndham. com/default. cfm US Franchise Systems http: //www. summerfieldsuites. com http: //www. usfsi. com http: //www. microtelinn. com http: //www. hawthorn. com http: //www. bestinn. com Walt Disney World Resorts http: //asp. disney. go. com/disneyworld/db/seetheworld/resorts/index. asp Warwick http: //www. warwickhotels. com Figure 1 -22