THE LODGING INDUSTRY

Standard 2: Objective 1Travel and Tourism Marketing

Evolution of the Hotel~

INN – Ancestor to the hotel Small, people shared rooms AND beds. Cleanliness

was a problem – bed bugs/fleas! Indoor plumbing – 1800’s

Hotel Industry Milestones

U.S.A. and Canada – First Hotels USA First grand hotel –

Boston’s TREMONT HOUSE. $2/day which included 4 meals!

Started the “Chain Hotel” concept and private baths in each room –

Ellsworth Milton Statler

Greatest Hotelier of all time – Ce’sar Ritz

Hotel Industry Milestones cont.

First No-frills motel – Motel 6 – 1963 ($6/night)

First Atrium Motel - Hyatt Regency in Atlanta

Hotels traditionally were established near

TRANSPORTATION CENTERS

Conrad HILTON…

Sometimes called, “The Biggest Hotel Man in the World” He catered to the

American Business Traveler

Also opened up the Caribbean for leisure travel

Hotel Classifications

LocationGuest TypePrice Style and

Function

HOTEL Location

Resorts – great locations, lots of amenities/activities

Airport – business or leisure AND airline employees

Freeway access – usually for one night guests traveling to another destination

Downtown (bigger cities) – near shopping or business

Conference Centers - convention/meetings

Business Guests –Business, conventions, meetings

Leisure Guests –Vacation for pleasure

HOTEL Guests

HOTEL Price

BUDGET (or Economy): Inexpensive, limited services (Comfort Inn, Motel 6)

MID PRICE: More services than budget (Holiday Inn Express, Courtyard)

UPSCALE (luxury): Great locations, many services and amenities (Grand America, Hyatt Regency)

HOTEL Style and Function

All Suite: Larger rooms, separate living areas

Extended Stay: More space for guests needing to stay for longer periods of time (kitchenettes)

Bed-n-Breakfasts: Fewer rooms, lots of personal service AND cooked breakfast.

HOTEL Style and Function

Spas: Health related services (Biggest Loser at Fitness Ridge)

Vacation Properties (Time Shares): Guests can “buy” a lodging location for period of time

Retreat Centers: Business travelers who want a secluded location.

Yield Management

Setting different prices for goods and services in an effort to maximize revenue when limited capacity is a factor.

Yield Management Pricing

Average Daily Balance (ADR) Total sales / total number of rooms = ADR

Occupancy percentage (OCC%) Number of rooms sold / # of rooms available = OCC%

Revenue per available room (RevPAR) Revenue / total rooms available = RevPAR

Room Rate Variables

Room size and amenitiesLocation of the room (ocean view or parking

lot)Number of people in the roomGroup, corporate or convention rateTaxes, (each city is different), resort &

service fee’sSeasonCost of operation and quality of servicesCurrency fluctuations

Hotel prices are quoted WITHOUT taxes, service charges or resort fee’s.

Hotel Room Rates

Rack Rates – price of a room “originally”

Frequent-guest incentives – rewards for members with each stay. Can earn points for free nights.

Weekend Rates – in cities, where business traveler’s usually stay.