the lodging industry

The Lodging IndustryThe Lodging Industry

Understanding LodgingUnderstanding Lodging

The lodging The lodging industry in the industry in the United States United States

has always been has always been strongly strongly

influenced by influenced by changes in changes in

transportation.transportation.

Mid-1600sMid-1600s

Stage coach routes establishedStage coach routes established Coaching inns became popular Coaching inns became popular

resting places for travelersresting places for travelers Expected a bed and a meal for the Expected a bed and a meal for the

eveningevening

1794-18281794-1828 1794 City Hotel in 1794 City Hotel in

New York City opensNew York City opens The first building in The first building in

the US designed the US designed specifically as a hotel.specifically as a hotel.

1828 The Tremont 1828 The Tremont House, first grand House, first grand hotel, was built in hotel, was built in Boston.Boston.

First hotel to offer First hotel to offer private rooms with private rooms with locking doors.locking doors.

The RailroadThe Railroad

Inns, taverns and foodservice facilities Inns, taverns and foodservice facilities located near railway stations began to located near railway stations began to grow.grow.

Famous resorts because of the railway Famous resorts because of the railway include Hotel del Coronado near San Diego include Hotel del Coronado near San Diego and the Greenbrair Resort in West Virginia. and the Greenbrair Resort in West Virginia. Yellowstone was also a railway resort. Yellowstone was also a railway resort.

Conrad HiltonConrad Hilton

A banker in New Mexico purchased A banker in New Mexico purchased his first hotel around 1900. It was in his first hotel around 1900. It was in Cisco Texas.Cisco Texas.

This began his chain of hotels.This began his chain of hotels. Other hotels around this time: Ritz Other hotels around this time: Ritz

Carlton in Boston and the Plaza in Carlton in Boston and the Plaza in New York City.New York City.

1950’s1950’s

Increased availability and popularity of the Increased availability and popularity of the automobile and a new interstate freeway automobile and a new interstate freeway system made cross country vacations a system made cross country vacations a popular option.popular option.

Motels sprang up along highways offering Motels sprang up along highways offering travelers a place to bathe, sleep and eat.travelers a place to bathe, sleep and eat.

The Airline IndustryThe Airline Industry

1958 commercial airlines became popular.1958 commercial airlines became popular. Builders moved toward airports for hotels Builders moved toward airports for hotels

and restaurants.and restaurants.

Lodging Operations OrganizationLodging Operations Organization

Front of the house: employees who have Front of the house: employees who have direct contact to the publicdirect contact to the public

Back of the house: supporting operations, Back of the house: supporting operations, behind the scenesbehind the scenes

OROR Administrative Departments: Manage Administrative Departments: Manage

business (accounting, human resources, business (accounting, human resources, training, marketing, sales)training, marketing, sales)

Service Departments: responsible for Service Departments: responsible for serving guests directlyserving guests directly

Administrative DepartmentsAdministrative Departments

General Manager (GM)General Manager (GM) Accounting and Accounting and

Financial Management Financial Management (Controller)(Controller)

Human ResourcesHuman Resources Marketing and SalesMarketing and Sales

Service DepartmentsService Departments

Front Office Front Office HousekeepingHousekeeping Engineering and Engineering and

Facility Facility MaintenanceMaintenance

SecuritySecurity Food and Beverage Food and Beverage

(F & B)(F & B)

Leisure TravelersLeisure Travelers

On vacationOn vacation Shopping, fine dinning, sightseeing, Shopping, fine dinning, sightseeing,

sports events, relaxsports events, relax May provide activities for children, May provide activities for children,

on-site recreation or health facilitieson-site recreation or health facilities

Business TravelersBusiness Travelers

Looking for well lit work spaces, Looking for well lit work spaces, telephones, modems, copiers, fax telephones, modems, copiers, fax machines.machines.

Meeting facilitiesMeeting facilities 24 hour service - valet parking, 24 hour service - valet parking,

secure lodgingsecure lodging

AmenitiesAmenities

RestaurantsRestaurants Parking GaragesParking Garages BoutiquesBoutiques Barber shopsBarber shops Dry CleanersDry Cleaners FloristsFlorists Swimming poolsSwimming pools Room serviceRoom service

Cable TelevisionCable Television Pay per viewPay per view BathrobesBathrobes Gift shopsGift shops KitchensKitchens Computer modemsComputer modems SpaSpa Recreational Recreational

activitiesactivities

Types of PropertiesTypes of Properties

Full ServiceFull Service LuxuryLuxury EconomyEconomy Mid-pricedMid-priced All-suiteAll-suite ResortsResorts Bed and BreakfastBed and Breakfast

Terms to KnowTerms to Know FolioFolio- The written record of a hotel guest's account.- The written record of a hotel guest's account. CRS Central Reservation System- CRS Central Reservation System- A central A central

reservation system (CRS) is a computerized system that reservation system (CRS) is a computerized system that stores and distributes information on a hotel, resort, or stores and distributes information on a hotel, resort, or other lodging facilityother lodging facility

Room Inventory- Room Inventory- Total number of rooms a lodging Total number of rooms a lodging property has to sellproperty has to sell

Block- Block- In a hotel, a number of rooms set aside or In a hotel, a number of rooms set aside or reserved for a group.reserved for a group.

Rooms Forecast- Rooms Forecast- Analysis of anticipated room inventory Analysis of anticipated room inventory that is based on past room sales; allows front office that is based on past room sales; allows front office manager to determine projected revenues and make manager to determine projected revenues and make decisions about rates and reservations.decisions about rates and reservations.

No-Shows- No-Shows- A passenger who doesn't arrive for a flight or A passenger who doesn't arrive for a flight or a hotel guest who reserves but never arrives.a hotel guest who reserves but never arrives.

Overbook- Overbook- The practice of taking more reservations than The practice of taking more reservations than there are seats, rooms, or space in the expectation that there are seats, rooms, or space in the expectation that no showsno shows will bring the number of reservations actually will bring the number of reservations actually used below maximum occupancy.used below maximum occupancy.

Understays- Understays- Guests who leave before their anticipated Guests who leave before their anticipated date of departuredate of departure

Yield Management- Yield Management- The practice of adjusting prices up The practice of adjusting prices up or down in response to demand in order to control yield. or down in response to demand in order to control yield. This process is usually computerized. This process is usually computerized.

Rack Rate- Rack Rate- Highest rate category offered by a lodging Highest rate category offered by a lodging property.property.

Hubbart FormulaHubbart Formula

Helps managers set ratesHelps managers set rates

Operating expenses + Desired return on investment-Other IncomeOperating expenses + Desired return on investment-Other Income

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Projected room salesProjected room sales

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Room RateRoom Rate