Hotel Management Revision PDF

Hotel Management → Employment in the tourism sector in Spain : 10.1% → Tourism contribution to the spanish GDP : 11% Definitions Tourist = a traveler that spends at least 1 (or more) night in a visited place Hiker = a visitor (excursionist) that doesn't spend a night in a visited place HOSPITALITY...

Hotel Management → Employment in the tourism sector in Spain : 10.1% → Tourism contribution to the spanish GDP : 11% Definitions Tourist = a traveler that spends at least 1 (or more) night in a visited place Hiker = a visitor (excursionist) that doesn't spend a night in a visited place HOSPITALITY = a commercial system that provides places to stay, F&B for guests. It belongs to the service sector. CATERING = providing, preparing, selling, and serving F&B in a place away from home. → 37% of the global demand SERVICE SECTOR = The part of the economy that provides instead of producing goods. Includes : - education - healthcare - tourism - retail… The SERVICE adds value to personal life PRODUCT CONSUMPTION = The act of using a product that has been bought to satisfy a need or want. MAIN DIFFERENCES BETWEEN SERVICES AND PRODUCTS SERVICES PRODUCTS - Intangible (untouchable) - Tangible (touchable) - The production and consumption of - Products are produced and then services occur simultaneously consumed separately - The quality of services vary - Products are generally standardized depending on the staff and consistent - Services are perishable and cannot - Products can be stored, inventoried be stored for later use and tested Example of services : → You pay for a service to have your hair cut or styled by a professional. → You book a room at a hotel to stay in during your trip. Example of products: → You buy a laptop to use for work or personal tasks. → You purchase a shirt to wear. TOURIST ACCOMMODATION = a group of businesses that provides places for people to stay temporarily with or without extra services, in exchange of a price. → standard hotel classification is based on a minimum requirements system. Example : the Decree 75 TOURIST ESTABLISHMENTS Hotels → hotels → tourist apartments → hostals or pensions Tourist apartments Camping sites → luxury category → First category → Second category → Third category Rural housing → farmhouses (incomes from farming) → rural accommodation : with or without income from farming General features of the hotel industry : → significant initial investment, difficulty to increase business in a short term → 24h/24h work without interruption HOTEL CLASSIFICATION BY LOCATION MARKET SEGMENTATION - Sun & Beach - Leisure - Urban - Congresses - Roadside Hotel - Low cost - Rural - Boutique INDEPENDENT HOTELS →Individual management of a hotel establishment HOTEL CHAIN →Unified management of a certain number of establishments (Mandarin Oriental Barcelona) INDEPENDENT HOTEL Advantages Disadvantages - Autonomy and Independence in - High number of competitors, terms of management and benefit difficulties to access new markets - Low negotiating power - Freedom to establish quality and service standards - Higher flexibility of workers - Limited creativity of management - Business value and competitive - Lower decision power for the advantage by brand (IMAGE) management of the establishment HOTEL CHAIN Advantages Disadvantages - Higher efficiency and - The management of other professionalism of Staff (training) establishment in the chain cloud affect the image - Limited creativity of management - Career plans - Increased number of users - Staff motivation difficulties - Business value and competitive by - Decisions taken in the hotel chain brand (IMAGE) can take into account the features of each establishment To start managing a hotel establishment, there are two types of resources needed: → Financial Resources: Capital → Human Resources: Staff In relation with those two factors, we can find different hotel management models HOTEL MANAGEMENT MODELS: 1. Own management, owned hotel 2. Own management and central reservations affliction 3. Own management and voluntary chain affliction  4. Own management and franchise agreement 5. Lease agreement with an operator 6. Management contract with a hotel chain/company 7. Joint venture 8. Sale and lease back 1-OWN MANAGEMENT, OWNED HOTEL. → Hotel Management lies with the property owner. You own the hotel and manage it yourself. You make all decisions and keep all profits but also handle all the risks. Preferred option when : - Advanced operational experience - The property location is a singular building - The organization has a high number of repeat customers ADVANTAGES DISADVANTAGES - can generate high revenue, in - managing staff, maintaining quality, popular locations or during peak and ensuring guest satisfaction can seasons be demanding - no bureaucracy, take your own - unlimited power can result in decisions, design, target… burnout, operational inefficiencies, and employee dissatisfaction if not managed wisely - no operation cost : 100% benefit - limited funding 2-OWN MANAGEMENT AND INDEPENDENT CENTRAL RESERVATIONS AFFILIATION An independent hotel can adhere to a hotel central reservations office to compete with the big hotel chains. Central Reservations are companies that offer reservations and commercialization process to their customers (*TTOO (tour operators), final customers) Example: Hotel Alimara You own and manage the hotel but use a central booking system from a network to get more guests. You pay a fee for this service. → Main advantages for their associates - Commercialization process - Call center  - Business Advice - Revenue Management 3-OWN MANAGEMENT AND VOLUNTARY CHAIN AFFILIATION → Owner keeps the individual identity hotel and management and gains the chain advantages: - Brand and prestige - Central reservations - Comercial Structure - Scale economies You own and manage the hotel but join a group of independent hotels for marketing and shared benefits. You keep your independence but pay fees for being part of the group. ADVANTAGES DISADVANTAGES - Growth with minimal investment - Maximum risk if loss - Income increase - Affiliation costs - Freedom in management - Minimal quality and standards control - National and international - Revenue limited to affiliation fees representation and percentage of sales revenue 4-OWN MANAGEMENT AND FRANCHISE AGREEMENT Franchise = agreement of a license of processes where one company allows another company or individual to operate a business using its brand, products, services, and operational systems in exchange for fees. Example: A McDonald’s restaurant owned by an individual but operated under McDonald’s brand, following their rules and standards, is a franchise. You own and manage the hotel but join a group of independent hotels for marketing and shared benefits. You keep your independence but pay fees for being part of the group. OWNER MANAGEMENT ADVANTAGES DISADVANTAGES  - Assistance and advice in the - franchise fee development, pre-opening, and property management - national / International coverage - economic risk in case of loss - Freedom in the daily management - costs for selling rooms with the limitations of accomplishing the operating manual and procedures of the franchise. FRANCHISOR ADVANTAGES DISADVANTAGES - Hotel network growth with minimal - income limited to membership fees investment and a % of sales revenue - increase of revenue with minimal - minimum quality control in the daily cost operations management of the hotel establishment 5-LEASE AGREEMENT WITH AN OPERATOR Agreement between the hotel ownership and a management company -The management company is responsible of management financial obligations and payment of a rent to the owner. - Renting can be: Fixed Percentage of sales Percentage of G.O.P. (revenue-operations expenses) Mixed (fixed + variable % of sales or G.O.P.) You own the hotel but lease it to someone else to manage. They pay you rent, and they handle all operations. ADVANTAGES DISADVANTAGES Owner: Owner: - Possibility of investing in hotels with - Minimum profitability limited to rent no management experience Operator: - Minimal risks if market crisis - Own economic risk management and in case of crisis situation Owner: Owner: - Easier operation funded if the - Loss of control in the operation operator has good market reputation management or the hotel  Operator: Operator: - Direct and complete management - Hotel loss once the lease agreement control finishes 6-OWN MANAGEMENT AND FRANCHISE AGREEMENT Management contract with a hotel chain : → The hotel chain takes care of managing the hotel, including daily operations and decision-making. → The hotel owner owns the building, staff, and resources like furniture and equipment. → The hotel chain provides top managers and directors, who are paid by the hotel chain, while regular staff (like cleaners or receptionists) are hired and paid by the hotel owner. You own the hotel but hire a professional company (like Hyatt or Accor) to manage it. They run the hotel, and you split the profits or pay them a fee. ADVANTAGES DISADVANTAGES - chain growth with minimal or - difficulty to break the management moderate investment contract - possibility of investing in hotel - Hotel loss when the management industry without experience contract ends-up - easier finance investment if the - Incomes limited to the management chain has good reputation fee. 7-SALE AND LEASE BACK You sell the hotel building to someone else but then lease it back to keep running it. This helps you get money upfront while continuing operations. The hotel company sells its property or a group of properties to an investor, like a bank or investment fund. In return, the hotel agrees to rent the property back from the investor for a long time. Benefits to both sides: → The hotel company gets immediate money from the sale. →The investor earns regular income from renting the property back to the hotel. 8-JOINT VENTURE You partner with another company or investor to own and run the hotel together. You share the costs, risks, and profits.  ORGANIZATIONAL STRUCTURE Summary: Organizational Structure in Hospitality Management 1. Definition Hotels operate like theaters, requiring coordinated efforts to deliver services efficiently. 2. Key Elements - Functions: Research, operations, marketing, accounting. - Structure Types: Centralized (small companies) vs. decentralized (large chains). 3. Goals Customer satisfaction, managing seasonality, and maintaining professionalism. Goals must be measurable, realistic, and aligned with strategy. 4. Departments - Rooms:: Reception, housekeeping, maintenance. - Food & Beverage: Restaurants, bars, banquets. - Sales & Marketing: Revenue, reservations, PR. - Administration: Accounting, HR, IT. - Extras: Spa, fitness, retail. 5. Tools Organizational charts and clear principles (hierarchy, coordination) prevent inefficiencies and improve performance. GENERAL ORGANIZATION CHART Owner General Manager Hotel Manager Sales division more detailed  F&B division (front of the house) F&B Manager Assistant Manager Example of case study 1- The Oceanview Resort The Oceanview Resort is a 120-room mid-range hotel located along a popular beach destination. Over the last few months, the hotel has received negative feedback about cleanliness, long wait times for check-in, and outdated in-room amenities. While the hotel offers competitive rates compared to nearby resorts, it is struggling to retain guests, especially with many negative reviews on travel websites. The hotel manager is considering the following actions to improve the situation: 1. Hiring additional staff to speed up check-in and check-out processes. 2. Conducting a thorough renovation of rooms and common areas to update the hotel’s appearance. 3. Offering special promotions such as discounted stays and loyalty rewards to encourage repeat bookings. 4. Introducing a customer service training program to improve guest interactions. Questions: 1. What are the key challenges faced by Oceanview Resort? 2. Which of the proposed actions would you prioritize, and why? 3. How would you measure the success of the proposed actions? 2- The Sunshine Hotel The Sunshine Hotel, a 150-room luxury property located in a prime coastal destination, has been experiencing a decline in its occupancy rates and guest satisfaction scores over the past year. Despite a recent renovation of the rooms, the hotel is struggling to compete with nearby resorts that offer all-inclusive packages and superior service quality. Challenges: 1. Declining occupancy rates: From 80% to 60% over the last year. 2. Lower guest satisfaction: Complaints about slow service, outdated facilities in common areas, and lack of unique experiences. 3. Competition: Neighboring resorts offer better value with all-inclusive packages. The hotel manager is considering the following strategies: 1. Implementing staff training programs to improve service quality. 2. Partnering with local tour operators to offer unique excursions and activities. 3. Introducing an all-inclusive package to compete with nearby resorts. 4. Upgrading common areas like the pool, lobby, and spa. Questions: 1. What are the key factors contributing to the decline in the Sunshine Hotel’s performance? 2. Which of the proposed strategies would you prioritize, and why? 3. Suggest one additional strategy to improve the hotel's competitive position.