Hotel_Front_Office.pdf

This page intentionally left blank FMTOC.indd Page i 9/21/10 1:27:37 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi HOTEL FRONT OFFICE MANAGEMENT F I F T H E D IT IO N...

This page intentionally left blank FMTOC.indd Page i 9/21/10 1:27:37 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi HOTEL FRONT OFFICE MANAGEMENT F I F T H E D IT IO N James A. Bardi, EdD, CHA The Pennsylvania State University John Wiley & Sons, Inc. FMTOC.indd Page ii 9/21/10 1:27:38 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi This book is printed on acid-free paper. Copyright © 2011, 2007, 2003 by John Wiley & Sons, Inc. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, or online at www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993 or fax 317-572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com. Library of Congress Cataloging-in-Publication Data Bardi, James A., 1947- Hotel front office management /James A. Bardi.–5th ed. p. cm. Includes bibliographical references and index. ISBN 978-0-470-63752-4 (acid-free paper) 1. Hotel management. I. Title. TX911.3.M27B35 2011 647.94’068–dc22 2010035007 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 FMTOC.indd Page iii 9/21/10 1:27:41 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi To Linda Your love, patience, and encouragement made this book possible. and To Maria & Rob, Ryan & Jenni, and David The joy of sharing this book with you makes it all worthwhile. And now, the special delight in sharing this book with my grandchildren, Ben and Sophia, and all my future grandchildren will provide much joy for this grandfather. This page intentionally left blank FMTOC.indd Page v 9/21/10 1:27:41 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi Contents Pr eface xi Ac know l edgm ents xvii CHAPTER 1 Introduction to Hotel Management 1 Founders of the Hotel Industry 2 Historical Developments 5 Overview of the Hotel Industry 12 Types of Lodging Facilities 14 Market Orientation 17 Sales Indicators 17 Levels of Service 20 Business Affiliations 21 Trends That Foster Growth 27 Career Development 31 Solution to Opening Dilemma 35 Chapter Recap 35 End-of-Chapter Questions 36 Notes 38 Key Words 40 CHAPTER 2 Hotel Organization and the Front Office Manager 41 Organization of Lodging Properties 42 Organization Charts 43 Typical Job Responsibilities of Department Managers 50 Organization of the Front Office Department 59 Function of the Front Office Manager 62 Staffing the Front Office 69 Solution to Opening Dilemma 72 Chapter Recap 73 End-of-Chapter Questions 73 Key Words 76 CHAPTER 3 Effective Interdepartmental Communications 78 Role of the Front Office in Interdepartmental Communications 79 Front Office Interaction with Other Departments in the Hotel 79 FMTOC.indd Page vi 9/21/10 1:27:41 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi vi CONTENTS Analyzing the Lines of Communications 88 Solution to Opening Dilemma 94 Chapter Recap 94 End-of-Chapter Questions 94 Key Words 99 CHAPTER 4 Property Management Systems 100 Physical Structure and Positioning of the Front Desk 102 Selecting a Property Management System 104 Procedure for Performing a Needs Analysis 105 Other PMS Selection Considerations 113 Financial Considerations 115 PMS Applications 116 Solution to Opening Dilemma 130 Chapter Recap 130 End-of-Chapter Questions 131 Notes 133 Key Words 133 CHAPTER 5 Systemwide Reservations 135 Importance of a Reservation System 136 Overview of the Reservation System 137 Types of Reservation Systems 142 Sources of Reservations 143 Forecasting Reservations 148 Overbooking (Occupancy Management) 150 Revenue Management 153 Processing Guest Reservations 154 Process of Completing Reservations through a PMS 158 Solution to Opening Dilemma 167 Chapter Recap 168 End-of-Chapter Questions 168 Notes 171 Key Words 172 CHAPTER 6 Revenue Management 173 Occupancy Percentage 174 History of Yield Management 177 Use of Yield Management 177 Components of Revenue Management 181 Applications of Revenue Management 188 Solution to Opening Dilemma 189 Chapter Recap 189 End-of-Chapter Questions 189 FMTOC.indd Page vii 9/21/10 1:27:42 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi CONTENTS vii Notes 192 Key Words 193 CHAPTER 7 Guest Registration 194 Importance of the First Guest Contact 195 Components of the Registration Process 196 Registration with a PMS 216 Solution to Opening Dilemma 228 Chapter Recap 228 End-of-Chapter Questions 228 Notes 230 Key Words 230 CHAPTER 8 Managing the Financials 232 Common Bookkeeping Practices 233 Forms Used to Process Guest Charges and Payments 234 Account Ledgers 235 Posting Guest Charges and Payments 237 Transferring Guest and City Ledgers to Accounts Receivable 241 Importance of Standard Operating Procedures for Posting and the Night Audit 243 Solution to Opening Dilemma 243 Chapter Recap 243 End-of-Chapter Questions 244 Key Words 246 CHAPTER 9 Guest Checkout 247 Organizing Late Charges to Ensure Accuracy 248 Guest Checkout Procedure 249 Determining Method of Payment and Collection 252 Assisting the Guest with Method of Payment 256 Obtaining Future Reservations 258 Filing Documents 259 Relaying Guest Departures to Other Departments 259 Removing Guest Information from the System 260 Transfer of Guest Accounts to the Back Office 260 Checkout Reports Available with a Property Management System 260 Guest Histories 262 Last Impressions of the Hotel 265 Solution to Opening Dilemma 266 Chapter Recap 266 End-of-Chapter Questions 267 Notes 269 Key Words 269 FMTOC.indd Page viii 9/21/10 1:27:42 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi viii CONTENTS CHAPTER 10 Preparation and Review of the Night Audit 270 Importance of the Night Audit 270 The Night Auditor 271 The Night Audit Process 272 Goal of Preparing the Night Audit Report 278 Preparing the Night Audit Report 278 Reading the Flash Report 293 Reading the Night Audit 293 Solution to Opening Dilemma 296 Chapter Recap 296 End-of-Chapter Questions 297 Key Words 316 CHAPTER 11 Managing Hospitality 317 Importance of Hospitality 318 Managing the Delivery of Hospitality 320 Total Quality Management Applications 327 Developing a Service Management Program 328 Customer Relationship Management 338 Solution to Opening Dilemma 339 Chapter Recap 339 End-of-Chapter Questions 340 Notes 342 Key Words 343 CHAPTER 12 Training for Hospitality 344 Determining Employee Hospitality Qualities 345 Screening for Hospitality Qualities 346 Developing an Orientation Program 347 Policy and Procedure Manual 351 Administering the Orientation Program 352 Developing a Training Program 354 Steps in the Training Process 356 Administering a Training Program 361 Cross-training 362 Developing a Trainer 362 Training for Empowerment 364 Americans with Disabilities Act 365 Solution to Opening Dilemma 367 Chapter Recap 367 End-of-Chapter Questions 368 Notes 370 Key Words 371 FMTOC.indd Page ix 9/21/10 1:27:42 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi CONTENTS ix CHAPTER 13 Promoting In-House Sales 372 The Role of the Front Office in Marketing and Sales 373 Planning a Point-of-sale Front Office 375 Theories of Motivation 380 Applying Motivation Theories 381 Training Programs for a Point-of-sale Front Office 382 Budgeting for a Point-of-sale Front Office 384 Feedback 384 Planning a Point-of-sale Front Office—An Example 386 Solution to Opening Dilemma 388 Chapter Recap 388 End-of-Chapter Questions 389 Notes 391 Key Words 391 CHAPTER 14 Security 392 Importance of a Security Department 393 Organization of a Security Department 395 Job Analysis of the Director of Security 395 In-House Security Departments versus Contracted Security 398 Room Key Security 401 Fire Safety 404 Emergency Communication 411 Employee Safety Programs 415 Safety Training Programs 418 Solution to Opening Dilemma 418 Chapter Recap 418 End-of-Chapter Questions 419 Notes 421 Key Words 422 CHAPTER 15 Executive Housekeeping 423 Importance of the Housekeeping Department 423 Role of Chief Engineer in a Lodging Property 446 The Greening of the Lodging Industry 450 Solution to Opening Dilemma 453 Chapter Recap 454 End-of-Chapter Questions 455 Notes 457 Key Words 459 Gl ossar y 460 I ndex 475 This page intentionally left blank FMTOC.indd Page xi 9/21/10 1:27:43 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi Preface T he Fifth Edition of Hotel Front Office Management remains one of the leading texts in addressing the demands for instructing future leaders of the hotel industry. Educators who are preparing profes- sionals for roles as front office managers and general managers in hotels are required to meet the challenges of operations, technology, training, empower- ment, and international applications. This latest edition of Hotel Front Office Management continues to encourage students to take an active part in apply- ing these concepts to the exciting world of hotel operations. To the Student The emphasis on management continues to play a central role in Hotel Front Office Management, Fifth Edition. The text’s structure will assist you as you prepare for positions as entry-level managers. The logical presentation of chapters in order of operations—overview of lodging hospitality; tour of the front office, review of the guest cycle, and analysis of guest services—allows you to gain insight into a front office manager’s role in the hotel. Reviews and analysis of other departments and how they relate to the front office include security and housekeeping. To the Instructor Instructors will find text material presented in a logical manner to develop lesson plans. Features include Chapter Focus Points; Opening Dilemmas to encour- age students to relate to practical information; figures, tables, and photos that FMTOC.indd Page xii 9/21/10 1:27:43 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi xii PREFACE represent current industry trends; International Highlights, which encourage diversity; End-of-Chapter Questions that support content presented in the text; and three well- developed Case Studies per chapter to facilitate student discussion. A list of Key Words can be found at the end of each chapter, and an excellent Glossary at the end of the text is provided to assist instructors as they develop classroom activities and exams. Faculty will also find PowerPoint Slides and a well-developed Instructor’s Manual with Test Bank on the web site. Text Features The Fifth Edition of Hotel Front Office Management has maintained its high standards of pedagogical features, including: Opening Dilemmas present students with a mini-case-study problem to solve with the help of subsequent chapter presentations; a Solution to the Opening Dilemma is included at the end of each chapter. O P E N I N G D I L E M M A The group leader of a busload of tourists approaches the front desk for check-in. The front desk clerk acknowledges the group leader and begins the check-in procedure, only to realize no clean rooms are available. The desk clerk mutters, “It’s 4:00 P.M., and you would think someone in housekeeping would have released those rooms by now.” The group leader asks, “What’s holding up the process?” Hospitality Profiles feature selected commentaries from hotel front office manag- ers, general managers, and other hotel department managers; these contribute a human relations element to the text. H O S P I TA L I T Y P R O F I L E ? E ric O. Long, general manager of the Waldorf=Astoria in New York City, has been employed by Hilton Corporation for 30 years. ? He has served in various management positions at the Hilton Short Hills, Chicago Hilton and Tow- ers, Hilton Walt Disney Village, Fontainebleau Hilton Resort, and the Palmer House. International Highlights include articles of interest that accentuate the international workforce and international career opportunities for hospitality graduates. Addi- tionally, they provide a forum for instructors and students to discuss this aspect of hotel management. FMTOC.indd Page xiii 9/21/10 1:27:44 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi WHAT’S NEW AND REVISED IN THIS FIFTH EDITION xiii I N T E R N AT I O N A L H I G H L I G H T S uI nternational translation cards, which assist foreign guests in translating travel phrases of their native language into English, are frequently kept at front desks. International visitors and hotel desk clerks find these cue cards helpful. Front-line Realities present unexpected yet realistic situations. Students are asked to discuss a method of handling these situations. F R O N T- L I N E R E A L I T I E S qA future guest has called the hotel and wants to arrange a small dinner party for his guests on the first day of his visit. The marketing and sales office is closed for the day, and the banquet manager has left the property for a few hours. What would you suggest the front desk clerk do to assist this future guest? There are now three Case Studies at the end of each chapter. A Glossary, which appears at the end of the book, summarizes terms introduced in each chapter (and appearing in italics in the text). What’s New and Revised in This Fifth Edition Chapter 1 Introduction to Hotel Management “Select-service” lodging terminology is introduced to reflect current usage; “limited- service lodging” was used previously. Technological advances, including social media, guest room technology, IT infrastruc- ture, surviving a tough economy with help from technology, and demystifying Web 2.0 are now included in the technological list of advances of the lodging industry. The importance of the Internet is emphasized for its role in marketing. A section on the economic downturn of the late 2000s is included to encourage students to address this challenge as they face their career and future management horizons. Additional metrics allow students to maintain their currency in the lodging market GOPPAR (Gross Operating Profit per Available Room). Chapter 2 Hotel Organization and the Front Office Manager Updates include organizational charts of a large, full-service hotel, a medium-sized lodging property, and a select-service lodging property. FMTOC.indd Page xiv 9/21/10 1:27:44 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi xiv PREFACE Chapter 3 Effective Interdepartmental Communications New information on social media and its use by the marketing and sales depart- ments is presented and discussed. Chapter 4 Property Management Systems Updates now include social media terminology (Facebook, Twitter, LinkedIn®, You- Tube) where applicable to emphasize its appropriateness to reservations as well as to marketing and sales. A brief listing of property management system vendors is now included, encourag- ing students to go beyond the text to seek information they will need in their future careers. Chapter 5 Systemwide Reservations New facts about social media applications including Facebook, Twitter, and LinkedIn are integrated throughout the chapter. Information on the central reservation systems for Choice Hotels®, Hilton Hotels®, and Marriott International, Inc., is updated. The effect of the Internet on pricing rooms is updated. Discussion of the global distribution system and its counterpart, customer relation- ship management, is expanded. Chapter 6 Revenue Management A discussion of the Star Report is now included. The section on channel management now covers current technology that allows users to alter rates, inventory, and reservations in connection with third-party web sites. Other features include multilingual and international currency capability. Chapter 7 Guest Registration The section on self-check-in is updated. Chapter 9 Guest Checkout Foreign currency transactions are exemplified by the exchange of Euros to U.S. dollars. Chapter 10 Preparation and Review of the Night Audit Figures on Case Studies (Night Audits) were updated. Chapter 11 Managing Hospitality Information on social media and the impact of technology on managing hospitality is refreshed. FMTOC.indd Page xv 9/21/10 1:27:44 PM f-392 /Users/f-392/Desktop/21::0:::10/bardi ADDITIONAL RESOURCES xv Chapter 13 Promoting In-House Sales The figures in the sales budget for the example Planning a Point-of-sale Front Office are updated. Chapter 14 Security The effects of international terrorism on hotel security are discussed. Information on electronic locks is expanded to included contactless electronic locks such as wristbands, key fobs, and key cards that use radio frequency identification (RFID). Chapter 15 Executive Housekeeping New emphasis is placed on technology used to assign room attendants. The management concept of outsourcing housekeeping activities is presented. A new section addresses the chief engineer’s responsibilities, including role in a lodging property, managing maintenance, interdepartmental communications, energy management, and the greening of the lodging industry. Additional Resources An Instructor’s Manual to accompany the textbook is available to qualified adopters and may be downloaded from www.wiley.com/college/bardi. It contains materials to assist in the classroom. An updated Test Bank is also included. The Test Bank for this textbook has been specifically formatted for Respondus, an easy-to-use software program for creating and managing exams that can be printed to paper or published directly to Blackboard, WebCT, Desire2Learn, eCollege, ANGEL, and other eLearning systems. Instructors who adopt Hotel Front Office Management can download the Respondus Test Bank for free. Additional Wiley resources also can be uploaded into your LMS course at no charge. PowerPoint Slides are available for download at the text’s website (www.wiley.com/ college/bardi). Each set of slides contains the chapter focus points and key discussion points of the main topics of the chapter. I think you will enjoy this new Fifth Edition of Hotel Front Office Management. I always appreciate hearing your comments ([email protected] or [email protected]). My very best to the future professionals of the hotel industry! This page intentionally left blank FMTOC.indd Page xvii 9/22/10 7:37:09 AM f-392 /Users/f-392/Desktop/22::09::10/bardi Acknowledgments I wish to acknowledge the following professors, who provided insight- ful reviews of individual chapters of this and previous editions; with- out their concern and thoughtful commentary, this effort for our students would not have been possible: Barbara Dexter-Smith, Middlesex Community College; Raphael Thomas George, The Ohio State University; Danna Gildersleeve, Anne Arundel Community College; Chad M. Gruhl, Metropolitan State College of Denver; Terry Jones, Community College of Southern Nevada; Thomas Jones, University of Nevada at Las Vegas, Robert McMullin, East Stroudsburg State University; Amanda Micheel, Purdue University; and James Reid, New York City Technical College. I would like to express my appreciation to the following hospitality profes- sionals, who provided commentary for the Hospitality Profiles included in this Fifth Edition: Gary Budge, Algonquin Hotel, New York City; Marti Cannon, former executive housekeeper, Sheraton Reading Hotel, Wyomissing, Pennsyl- vania; James Heale, corporate controller for Meyer Jabara Hotels; Lee Johnson, director of corporate sales at Pier 5 Hotel and Brookshire Suites at Baltimore, Maryland’s Inner Harbor; John Juliano, director of safety and security, Royal Sonesta Hotel, Cambridge, Massachusetts; Debra Kelly, revenue manager, The Sheraton Parsippany Hotel, Parsippany, New Jersey; Kevin Corprew, director of rooms operation at the Marriott in St. Louis, Missouri; Eric Long, general manager, Waldorf=Astoria, New York City; Joseph Longo, general manager, The Jefferson, Richmond, Virginia; and Patrick Mene, former vice president of quality for the former Ritz-Carlton Hotel Company, LLC. Special thanks are also extended to Gary Budge and Debra Kelly for their time in discussing the operations of room reservations and revenue manage- ment, and to Marti Cannon for her countless hours in explaining the manage- ment of the housekeeping department. Their insights provided a framework that will help future generations of hoteliers understand the business. One additional acknowledgment is offered to Dr. Trish Welch of Southern Illinois University, who was instrumental in developing the First Edition of Hotel Front Office Management. Her words of support to Van Nostrand Rein- hold for the initial prospectus and sample chapter are still greatly appreciated. This page intentionally left blank c01IntroductiontoHotelManagement1 Page 1 9/15/10 9:51:16 AM user-f391 /Users/user-f391/Desktop/15:09:10 C H A P T E R 1 Introduction to Hotel Management O P E N I N G D I L E M M A CHAPTER FOCUS POINTS Historical overview of the A hospitality career fair is scheduled at the end of the week at your hotel industry Hotel classification college or university. Your recent review of this chapter has enticed you system to explore the career opportunities in select-service and full-service Trends that foster growth and employment in the hotels. Your instructor has asked you to prepare a list of possible hotel industry Career development questions to ask the recruiter. What would you include in that list? The mere mention of the word hotel conjures up exciting images: a busy lobby filled with international dignitaries, celebrities, community leaders, attendees of conventions and large receptions, businesspeople, and family vacationers. The excitement you feel in a hotel lobby is something you will have forever in your career. Savor it and enjoy it. It is the beginning of understanding the concept of providing hospitality to guests. As you begin to grasp the principles of a well-operated hotel, you will discover the important role the front office plays in keeping this excitement intact. The front office is the nerve center of a hotel property. Communications and accounting are two of the most important functions of a front desk operation. Effective communications—with guests, employees, and other departments of the hotel—are paramount in projecting a hospitable image. Answering guest inquiries about hotel services and other guests, marketing and sales department requests for information on guest room availability, and housekeeping department inqui- ries concerning guest reservations are but a few of the routine tasks performed almost constantly by a hotel front desk in its role as communications hub. c01IntroductiontoHotelManagement2 Page 2 9/15/10 9:51:17 AM user-f391 /Users/user-f391/Desktop/15:09:10 2 CHAPTER 1 INTRODUCTION TO HOTEL MANAGEMENT Accounting procedures involving charges to registered and nonregistered hotel guest accounts are also important in the hospitality field. Itemized charges are necessary to show a breakdown of charges if a guest questions a bill. Services for which fees are charged are available 24 hours a day in a hotel property. Moreover, because guests may want to settle their accounts at any time of the day or night, accounts must be current and accurate at all times. Keeping this data organized is a top priority of good front office management. Founders of the Hotel Industry A history of the founders of the hotel industry provides an opportunity to reflect on our heritage. Learning about the founding giants such as Statler, Hilton, Marriott, Wilson, and Schultz, to name a few, allows a student of the industry to discover the interesting lineage of hoteliers. Studying the efforts of the innovators who carved out the modern hotel industry may help future professionals with their own career planning. E. M. Statler To begin to understand the history of the modern hotel industry, let’s look at its early entrepreneurs, who were motivated by wealth and fame on a grand scale.1 Ellsworth M. Statler (1863–1928) developed the chain of hotels that were known as Statlers, beginning with a hotel in Buffalo, New York, built for the 1901 Pan-American Exposition. Eventu- ally there were Statler hotels in Boston, Cleveland, Detroit, New York City, St. Louis, and other locations. In 1954, Statler sold this chain to Conrad Hilton.2 Statler devised a scheme to open an incredible two-story, rectangular wood structure that would contain 2084 rooms and accommodate 5000 guests. It was to be a temporary structure, covered with a thin layer of plaster to make it appear substantial, although simple to tear down after the fair closed.3 Conrad Hilton Conrad Hilton (1887–1979) became a successful hotelier after World War I, when he purchased several properties in Texas during its oil boom. In 1919, he bought the Mobley Hotel in Cisco, Texas. In 1925, he built the Hilton Hotel in Dallas, Texas.4 His acquisi- tions during and after World War II included the 3000-room Stevens Hotel (now the Chi- cago Hilton), the Palmer House in Chicago, and the Plaza and Waldorf=Astoria in New York City. In 1946, he formed the Hilton Hotels Corporation, and in 1948, he formed the Hilton International Company, which came to number more than 125 hotels.5 With the purchase of the Statler chain in 1954, Hilton created the first major chain of modern American hotels—that is, a group of hotels that follow standard operating procedures in marketing, reservations, quality of service, food and beverage operations, housekeeping, c01IntroductiontoHotelManagement3 Page 3 9/15/10 9:51:17 AM user-f391 /Users/user-f391/Desktop/15:09:10 FOUNDERS OF THE HOTEL INDUSTRY 3 and accounting. Hilton Hotels now includes Hilton Garden Inns, Doubletree, Embassy Suites, Hampton Inns, Harrison Conference Centers, Homewood Suites by Hilton, Red Lion Hotels and Inns, and Conrad International. Cesar Ritz Cesar Ritz was a hotelier at the Grand National Hotel in Lucerne, Switzerland. Because of his management abilities, “the hotel became one of the most popular in Europe and Cesar Ritz became one of the most respected hoteliers in Europe.”6 William Waldorf Astor and John Jacob Astor IV In 1893, William Waldorf Astor launched the 13-story Waldorf Hotel at Fifth Avenue near Thirty-fourth Street in New York City. The Waldorf was the embodiment of Astor’s vision of a New York hostelry that would appeal to his wealthy friends by combining the opulence of a European mansion with the warmth and homey qualities of a private residence. Four years later, the Waldorf was joined by the 17-story Astoria Hotel, erected on an adjacent site by William Waldorf Astor’s cousin, John Jacob Astor IV. The cousins built a corridor connecting the two hotels, which together became known by a single hyphenated name, the Waldorf=Astoria. In 1929, after decades of hosting distinguished visitors from around the world, the Waldorf-Astoria closed its doors to make room for the Empire State Building. Today’s 2200-room, 42-floor Waldorf=Astoria Hotel was built at Park and Lexington avenues between Forty-ninth and Fiftieth streets. Upon the hotel’s opening, President Herbert Hoover delivered a message of congratulations. Hoover later became a perma- nent resident of the Waldorf Towers, the luxurious “hotel within a hotel” that occupies the twenty-eighth through the forty-second floors. Conrad N. Hilton purchased the hotel in 1949 and then the land it stands on in 1977. In 1988, the hotel underwent a $150 mil- lion restoration. It was designated a New York City landmark in January 1993.7 Kemmons Wilson Kemmons Wilson started the Holiday Inn chain in the early 1950s, opening the first in Memphis, Tennessee. He wanted to build a chain of hotels for the traveling family and later expanded his marketing plan to include business travelers. His accomplishments in real estate development coupled with his hotel management skills proved a highly suc- cessful combination. Wilson blazed a formidable path, innovating with amenities and high-rise architec- ture, including a successful round building concept featuring surprisingly functional pie- shaped rooms. Wilson also introduced the in-house Holidex central reservation system, which set the industry standard due to both the volume of business it produced and the important byproduct data it generated (for example, it made it possible to determine feasibility for new locations with cunning accuracy).8 c01IntroductiontoHotelManagement4 Page 4 9/15/10 9:51:18 AM user-f391 /Users/user-f391/Desktop/15:09:10 4 CHAPTER 1 INTRODUCTION TO HOTEL MANAGEMENT Wilson died in February 2003 at the age of 90. His legacy to the lodging industry is serving the traveling public with comfortable, safe accommodations while making a profit for investors. J. W. Marriott and J. W. Marriott Jr. J. W. Marriott (1900–1985) founded his hotel empire in 1957 with the Twin Bridges Marriott Motor Hotel in Virginia, near Washington, DC. By the time he died in 1985, Marriott Hotels and Resorts had grown to include Courtyard by Marriott and American Resorts Group. At this point, J. W. Marriott Jr. acquired the Howard Johnson Company; he sold the hotels to Prime Motor Inns but retained 350 restaurants and 68 turnpike units. In 1987, the Marriott company completed expansion of its Worldwide Reserva- tion Center in Omaha, Nebraska, making it the largest single-site reservations operation in U.S. hotel history. Also in 1987, Marriott acquired the Residence Inn Company, an all-suite hotel chain targeted at extended-stay travelers. With the introduction of limited- service hotels—hotels built with guest room accommodations and limited food service and meeting space—Marriott entered the economy lodging segment, opening the first Fairfield Inn in Atlanta, Georgia, in 1987.9 Ernest Henderson and Robert Moore Ernest Henderson and Robert Moore started the Sheraton chain in 1937, when they acquired their first hotel, the Stonehaven, in Springfield, Massachusetts. Within two years, they purchased three hotels in Boston and soon expanded their holdings to include proper- ties from Maine to Florida. At the end of its first decade, Sheraton was the first hotel chain listed on the New York Stock Exchange. In 1968, Sheraton was acquired by ITT Corpora- tion as a wholly owned subsidiary, and ambitious development plans were put into place to create a global network of properties. In the 1980s, under the leadership of John Kapi- oltas, Sheraton’s chairman, president, and chief executive officer, the company received international recognition as an industry innovator in modern hotel accommodations.10 The Sheraton chain is currently owned by Starwood Hotels & Resorts Worldwide. Ray Schultz In the early 1980s, Ray Schultz founded the Hampton Inn hotels, a former company in the Holiday Inn Corporation. These hotels were tagged as limited-service (now referred to as select-service), meeting the needs of cost-conscious business travelers and pleasure travel- ers alike. Schultz’s pioneering efforts in developing a product and service for these market segments have proved a substantial contribution to the history of the hotel industry. At a 1998 celebration of the expansion of the Hampton Inn hotel corporation to more than 800 properties, Schultz said: We started the Hampton Inn chain in 1984 to provide guests with a quality room and special amenities, like a free continental breakfast and free local phone calls, all c01IntroductiontoHotelManagement5 Page 5 9/15/10 9:51:19 AM user-f391 /Users/user-f391/Desktop/15:09:10 HISTORICAL DEVELOPMENTS 5 at an exceptional value. The opening of this hotel today tells us that we understood our guests’ needs and that price/value is still a viable concept nearly 15 years later. Hampton Inn has been, and is committed to remaining, the standard against which all midpriced, limited-service hotel brands are measured.11 Historical Developments The history of the hotel industry is filled with concepts that shaped the products and services offered. The atrium concept design, limited-service hotels, and technology were notable inno- vations. Management concepts such as marketing and total quality management (TQM) offered managers a new way to do business in hotels. The major U.S. economic reorga- nization in the late 1980s shaped the way hotels could be profitable. Also, in the 1990s, a new financial approach—real estate investment trusts (REITs)—changed the financial structuring and operation of hotels. The terrorist events of September 11, 2001, continue to affect how hotels market their products and services and deliver hospitality. The economic upheaval of the recession of the late 2000s has challenged marketing practices and operational practices in the hotel world. Atrium Concept The hotel industry has seen many notable developments over the past years. The atrium concept, an architectural design in which guest rooms overlook the lobby from the first floor to the roof, was first used in the 1960s by Hyatt Hotels. FIGURE 1-1 Atriums are a common site in today’s hotels. Courtesy of the Bellevue Hilton, Bellevue, Washington. c01IntroductiontoHotelManagement6 Page 6 9/15/10 9:51:19 AM user-f391 /Users/user-f391/Desktop/15:09:10 6 CHAPTER 1 INTRODUCTION TO HOTEL MANAGEMENT The dramatic approach to hotel style was exemplified by the Hyatt Regency in Atlanta. Designed by architect John Portman and featuring a striking and impressive atrium soaring up its 21 stories, the hotel changed the course of upscale hotel design. As a result, hotels became more than a place to rest one’s head. They became hubs for excite- ment, fun, relaxation, and entertainment.12 This 1260-room hotel “is now one of the nation’s premier convention and trade show facilities, with 180,000 square feet of ballroom, exhibit, meeting, and hospitality space.”13 Select-Service Hotels The movement of hotel construction from the downtown, center-city area to the suburbs in the 1950s coincided with the development of the U.S. highway system. The select-service concept—hotels built with guest room accommodations and limited food service and meet- ing space—became prominent in the early 1980s, when many of the major chains adopted this way to serve business travelers and travelers on a limited budget. Hampton Inn revo- lutionized the hotel industry as the first national brand targeted to the new select-service hotel segment. The hotels featured spacious, comfortable rooms but eliminated or reduced other elements common to hotels at that time, such as restaurants, lounges, and meeting and lobby space, passing on the resulting cost savings to guests in the form of lower rates. The company pioneered a number of ideas, including the mounting of the first site by a hotel brand on the Internet. In 1989, Hampton Inn became the first national brand to offer guests an unconditional 100 percent satisfaction guarantee, which today is the cornerstone of all Promus brands and a testament to the company’s commitment to quality.14 Technological Advances Technology has played a major role in developing the products and services offered to guests. Reservations systems, property management systems, and in-room guest checkout are only the most obvious advances. Impressive firsts in the adaptation of technology to the hotel industry are shown in Figure 1-2. Note how many of the developments we call technology are recent adaptations. Recent additions to the list include applications of wireless technology that allow front office staff to alert others on VIP check-ins, housekeeping staff to report guest room clean- ing and release, marketing staff to maintain guest profiles, and bell staff to process bag- gage handling. Guests have also found technology in the 2000s to increase their ability to work and play at the same time; they can check email and print documents as needed from so-called hot spots, or designated wireless transmission and reception areas in the hotel. Marketing Emphasis An emphasis on niche marketing to guests was the theme in the 1970s. This technique surveyed potential guest markets and built systems around the needs of identified segments. c01IntroductiontoHotelManagement7 Page 7 9/15/10 9:51:20 AM user-f391 /Users/user-f391/Desktop/15:09:10 HISTORICAL DEVELOPMENTS 7 FIGURE 1-2 Introduction of technological advances to the hotel industry. 1846 Central heating 1859 Elevator 1881 Electric lights 1907 In-room telephone 1927 In-room radio 1940 Air conditioning 1950 Electric elevator 1958 Free television 1964 Holiday Inn reservation system with centralized computer 1965 Message lights on telephone Initial front office computer systems introduced followed by room status capability 1970s Electric cash register POS (point of sale) systems and keyless locks Color television standard 1973 Free in-room movies (Sheraton) 1980s Property management systems In-room guest checkout 1983 In-room personal computers Call accounting 1990s On Command Video (on-demand movies) LodgeNet Entertainment (interactive video games) Interactive guest room shopping, interactive visitor’s guide, fax delivery on TV, interactive guide to hotel’s facilities and activities, reservations from the guest room for other hotels within the same organization, and interactive weather reports Internet reservations Introduction of legislation that monitored hotel ownership through real estate investment trusts (REITs) 2000s Wireless technology—Wireless technology VIP check-in, housekeeping guest room clean and release status, marketing guest profile, bell staff baggage handling; guest “hot spot” centers in hotels for wireless transmission and reception of emails and documents. Social media, guest room technology, IT infrastructure, surviving a tough economy with help from technology, and demystifying Web 2.0 Sources: Sources: American Hotel & Motel Association; Madelin Schneider, “20th Anniversary,” Hotels & Restaurants International 20, no. 8 (August 1986): 40 (copyright Hotels magazine, a division of Reed USA); Larry Chervenak, “Top 10 Tech Trends: 1975–1995,” Hotel & Motel Management 210, no. 14 (August 14, 1995): 45; www.hotel-online.com/News/ PR2009_2nd/Apr09_HITECTechTrends.html. c01IntroductiontoHotelManagement8 Page 8 9/15/10 9:51:20 AM user-f391 /Users/user-f391/Desktop/15:09:10 8 CHAPTER 1 INTRODUCTION TO HOTEL MANAGEMENT The larger hotel-management and franchise companies also were discovering the advantages of forging strong reservations and marketing systems. For a guest, this meant that by calling a single phone number, he or she could be assured of a reservation and feel confident of the quality of accommodations expected.15 The marketing emphasis continues in the 2000s through the routine use of the Internet to place guest reservations. Surveys show that up to 84 percent of travel research and planning in the United States is conducted via the Web (eMarketer/TIA). The Internet has become the single most important travel planning and distribution channel in hospitality. In 2009, over 40 percent of all revenues in hospitality will be generated by the Internet, and another third of hotel bookings will be influenced by the Internet but done offline. Each year since 2004, Internet hotel bookings have surpassed GDS hotel bookings.16 Total Quality Management Total quality management (TQM), a technique that helps managers critique processes used to create products and services with an eye to improving those processes, is practiced in hotels today. This emphasis on analyzing the delivery of services and products, with decision making at the front lines, began in the 1990s and continues today under terms such as qual- ity assurance and service quality. These concepts are discussed in more detail in chapter 11. Major Reorganization, 1987–1988 The economic period of 1987 to 1988 saw a major reorganization of the hotel industry. In 1986, Congress unraveled what it had stitched together in 1981. The revised Tax Act made it clear that passive losses on real estate were no longer deductible. Hotels that were previously economically viable suddenly were not. At this time, there were plenty of Japanese investors who seemed intent on buying up, at astronomical prices, any piece of U.S. property with a hotel or golf course on it. As a result, the value of American hotel properties continued to increase. Between 1990 and 1995, the recession began and ended, and the full impact of the 1986 law and overbuilding were experienced. Some investors who had built properties in the early 1980s found those properties’ sales or replacement value had fallen to 50 percent or less of original cost. Some owners simply abandoned their properties to their mortgage holders—which in many cases turned out to be Uncle Sam, because of the simultaneous savings and loan debacle.17 Hotel Investment Real estate investment trusts (REITs) provide an investment opportunity for hoteliers. In the Spring 2000 Virginia Hospitality and Leisure Executive Report, P. Anthony Brown of Arthur Andersen wrote the following about the U.S. Tax Relief Extension Act of 1999. This information will be useful as you plan your career. c01IntroductiontoHotelManagement9 Page 9 9/15/10 9:51:20 AM user-f391 /Users/user-f391/Desktop/15:09:10 HISTORICAL DEVELOPMENTS 9 The most significant provision… creation of a new type of corporation—a “Tax- able REIT Subsidiary” (effective January 1, 2001)—which will allow REITs to cre- ate new incremental income streams. With new growth opportunities, shareholders should be rewarded with higher stock prices since companies with increased growth rates typically trade in the market at higher earnings multiples. Under the terms of the 1999 legislation, Taxable REIT Subsidiaries can provide non-customary services to tenants through their subsidiaries. This legislation should enable REITs to provide better customer service, create stronger customer loyalty and sell new, non-customary services to tenants. In addition these new subsidiaries can lease lodging facilities from REITs. However, the lodging facilities must be managed by an independent contractor that is actively engaged in the trade or business of oper- ating lodging facilities for any person other than the REIT. With these changes, hotel REITs will be able to reorganize their structure in order to retain more of the income generated by their hotels. For example, FelCor Lodging Trust Inc., a hotel REIT based in Irving, Texas, in 2000 leased its hotels to two tenants: (1) a company owned by its executives and directors and (2) Bristol Hotels and Resorts, a publicly traded company. With the new legislation, FelCor will be able to form a new tax- able REIT subsidiary and transfer the leases of its hotels to this new subsidiary. Accord- ingly, the net income of the existing lessee would be transferred to the new taxable REIT subsidiary. However, a management company (not owned by FelCor) must manage the hotels and must be actively engaged in the trade or business of operating lodging facilities for any person other than the REIT.18 September 11, 2001 The terrorist events of September 11, 2001, will have a lasting effect on how a hotel mar- kets its products and services and delivers hospitality. The immediate impact of the terror- ist attacks on the industry was a decrease in the number of people willing to fly and, thus, a decrease in demand for hotel rooms. Hotels (as well as restaurants, tourist attractions, government agencies, and the like) and the federal, regional, and state tourism associa- tions continue to cooperate to address the issue of fear as it relates to travel and tourism. Hoteliers reviewed their marketing plans and determined how to attract the post-9/11 corporate traveler. The huge corporate guest market can no longer be taken for granted. Corporate executives, travel planners, and traffic managers now must be greeted person- ally by hotel staff and asked when business might be expected. New methods of attracting markets such as local and regional residents are being developed. These efforts include special packages emphasizing local history and culture, businesses, sporting events, and natural attractions and are combined with the products and services of an individual hotel. Is this an easy challenge? Indeed no, yet it is one that hoteliers had to grasp with eagerness and enthusiasm in order to succeed. R. Mark Woodworth reports that this effort is indeed a formidable task in light of the data revealed in Trends in the Hotel Industry—USA, published by PKF Consulting and c01IntroductiontoHotelManagement10 Page 10 9/15/10 9:51:21 AM user-f391 /Users/user-f391/Desktop/15:09:10 10 CHAPTER 1 INTRODUCTION TO HOTEL MANAGEMENT the Hospitality Research Group (HRG). The 2003 edition reported that “the operating profit for the average U.S. hotel dropped 9.6 percent in 2002, this after a 19.4 percent decline in profits in 2001.”19 Rick Swig of RSBA & Associates notes that although hotel revenues increased by 2 percent from 2003 to 2004, “other issues such as supply of hotel rooms of 4.4% since June 2001 versus average number of rooms sold increas[ed] only by 3.3%.” He urges, “Hotel operators should focus on pricing power for the next 24 months until occupancy returns to pre-2001 levels and compression begins to build…National con- sortium and high volume travel contracts are being finalized for 2005. Hotels will have to be successful in achieving significant rate hikes through these conduits, since the past two years of negotiations have yielded little or no rate increase as operating expense inflated.”20 Further insight into the challenge facing hoteliers is expressed by Tom Belden of the Philadelphia Inquirer, who relates that 94 percent of the 112 corporations surveyed by the Business Travel Coalition of Radnor, Pennsylvania, cut their travel spending over a three-year period. He reports that one participant increased its use of web-based meeting software by 50 percent in one particular year.21 The delivery of hospitality in hotels has also come under review. For example, hoteliers are reviewing security plans to include the front-line employee who must take immediate action based on observations at the front desk, in the dining room and recreational areas, and on guest and public floors. The front-line employee who sees uncommon activities must know the importance of reporting concerns to supervisors. Special training in what to look for in guest interactions in public areas and on guest floors assists the front-line person in becoming proactive. Hoteliers must also be concerned with how to support hospitality as part of respon- sible community citizenship. Hotel general managers should develop emergency plans that allow immediately offering public space to medical personnel and disaster victims. Short-term concerns, such as feeding disaster victims and emergency personnel, and long- term commitments, such as housing displaced members of the community, are among the many issues faced by the hotel industry. Liability implications for the owner, management contractor, or lessee with respect to repair of facilities have arisen, as have concerns for the safety of guests resulting from terrorism. Andrew MacGeoch, reporting in Hotel, notes: The obligation of an owner to repair the hotel under a management agreement usually depends on the extent of the damage. In general, if the costs of repair do not exceed a certain threshold specified in the management agreement [which is usually a certain percentage of the replacement costs of the hotel], the owner will be obliged to return it to its condition prior to the destruction. However, if the costs of repair exceed the specified threshold, the owner will have the right to choose not to undertake the repair and to terminate the management agreement. MacGeoch continues with a note on liability toward guests by acts of terrorism. c01IntroductiontoHotelManagement11 Page 11 9/15/10 9:51:21 AM user-f391 /Users/user-f391/Desktop/15:09:10 HISTORICAL DEVELOPMENTS 11 Generally, neither the operator nor the owner would be held liable for any injury or death caused by terrorist activities, unless the owner or operator has failed to exercise reasonable care for the safety and security of their guests. Therefore, to make sure that the reasonable-care standard is met, it is necessary and advisable for owners and operators to take reasonable and necessary steps to protect the safety of guests, includ- ing implementing appropriate security policies and measures and providing crisis- management training to all employees.22 Economic Downturn of the Late 2000s PKF Hospitality Research (PKF-HR) prepared a statement in June 2009 concerning the effects of economic impact upon the U.S. hotel economy. Given the forecast 17.5 percent decline in RevPAR for 2009, PKF-HR is projecting total hotel revenues to decrease 16.0 percent for the year. U.S. hotel manag- ers, as they have in the past, will cut costs by 7.5 percent, but that will not be enough to avoid a decline in the typical hotel’s net operating income (NOI) (before deduc- tions for capital reserve, rent, interest, income taxes, depreciation, and amortization). PKF-HR is forecasting that the typical U.S. hotel will suffer a 37.8 percent decline in NOI in 2009 and an additional 9.2 percent in 2010. It should be noted that U.S. hotels will continue to generate a positive NOI. However, given the projected declines in NOI, hotel profit margins are forecast to be well below the long-term average of 25.7 percent. The article continues with a quote from Professor Robert C. Baker of Cornell University. “Fewer guests paying lower prices is a recipe for evaporating profits,” said John B. (Jack) Corgel, the Robert C. Baker professor of real estate at the Cornell Univer- sity School of Hotel Administration and senior advisor to PKF-HR. “Add to that the potential for an increase in fixed charges such as utility costs, insurance, and property taxes and the situation could get ugly quickly. Not many current industry partici- pants were around 72 years ago, the last time PKF-HR recorded a unit-level profit decline in excess of 20 percent. Needless to say, profit declines in excess of 30 percent have a wide-ranging impact on hotel values, debt coverage, default covenants, and solvency.” However, the forecast for the future looks brighter with the following quote from the same article. While the cumulative declines in revenue and profits during the current industry recession exceed those of previous industry downturns, the magnitude of forecast c01IntroductiontoHotelManagement12 Page 12 9/15/10 9:51:22 AM user-f391 /Users/user-f391/Desktop/15:09:10 12 CHAPTER 1 INTRODUCTION TO HOTEL MANAGEMENT recovery will be exceptionally robust. In 2011 and 2012, PKF-HR forecasts that RevPAR will increase on an average annual basis of 9.2 percent, while profits will rise at a 17.8 percent pace. “If you are an owner, investor, or lender that can weather this year and next, the return to prosperity should be strong and quick,” Woodworth added.23 The economic downturn of the late 2000s had its effect on marketing effort and operations in hotels. Marketing is a vital planning tool that hotels rely on to determine customers, to determine customers’ needs, and to make a profit. Activities related to business include advertising (newspapers, radio, television, Internet); public relations and publicity; and promotions (coupons). Concerns for hotel-operations cost include labor and product. Carol Verret, in her article “Selling Into a Bad Economy: Overcoming Fear and Steal- ing Share,” says the following about hotel sales in tough economic times. Pull way back if not eliminate expensive hard copy print advertising in favor of Internet- based strategies. How do you buy things, how do you research your options for a pur- chase? Consumer buying behavior has changed and this also applies to the business and leisure consumer—accessing information on the web. Take calculated risks—try platforms that you haven’t tried before or increase your presence on those that you are already on. Some of these will represent “electronic billboards” that consumers will use for research prior to making direct contact.24 At the eighth annual Americas Lodging Investment Summit (ALIS), “2009: Industry Looks to the Long Term, Leaders, and Innovation,” Frits van Paasschen, president and CEO of Starwood Hotels and Resorts Worldwide, commented, “Focus on operations, watch costs and prepare for a turnaround and growth. You must have an enormous amount of will to ask how we can be internally more efficient and reach out to our guests and stakeholders.25 These issues—marketing, delivering hospitality, the possibility of terrorism, and the economic recession of the late 2000s—are ongoing concerns hoteliers must continue to discuss. They must focus on goals and subsequent planning for implementation of a safe environment for guests and employees. Overview of the Hotel Industry A working knowledge of the classifications used in the hotel industry is important to understanding its organization. The types of properties, their market orientation and location, sales indicators, occupancy, and revenues as they relate to levels of service and types of business affiliation are all means of classifying hotel properties. Figure 1-3 serves as a reference point throughout this discussion. c01IntroductiontoHotelManagement13 Page 13 9/15/10 9:51:22 AM user-f391 /Users/user-f391/Desktop/15:09:10 OVERVIEW OF THE HOTEL INDUSTRY 13 FIGURE 1-3 Hotel industry overview. I. Types of hotel properties 3. All-suites a. Hotels 4. Select-service b. Motels iv. Highway c. All-suites 1. Motels d. Select-service hotels 2. All-suites e. Extended-stay hotels 3. Select-service II. Market orientation/location 4. Extended-stay a. Residential III. Sales indicators i. Center-city a. Occupancy 1. Hotels b. Average daily rate (ADR) 2. All-suites c. Yield percentage 3. Select-service d. Revenue per available room (RevPAR) 4. Extended-stay e. Gross Operating Profit per Available ii. Suburban Room (GOPPAR) 1. All-suites f. Revenue per Available Customer (RevPAC) 2. Select-service IV. Levels of service 3. Extended-stay a. Full-service b. Commercial b. All-suites i. Center-city c. Select-service 1. Hotels d. Extended-stay 2. All-suites V. Affiliation 3. Select-service a. Chain 4. Extended-stay i. Franchise ii. Suburban ii. Company-owned 1. Hotels iii. Referral 2. Motels iv. Management contract 3. All-suites b. Independent 4. Select-service 5. Extended-stay iii. Airport 1. Hotels 2. Motels c01IntroductiontoHotelManagement14 Page 14 9/16/10 11:30:29 AM user-f391 /Users/user-f391/Desktop/Ravindra_16.09.10/JWCL358:BARDI:202 14 CHAPTER 1 INTRODUCTION TO HOTEL MANAGEMENT Types of Lodging Facilities Classification of hotel facilities is not based on rigid criteria. Definitions can change depending on market forces, legal criteria, location, function, and, in some cases, per- sonal preference, but the definitions that follow are generally accepted and are the ones intended for these classifications throughout this text. Hotels A hotel usually offers guests a full range of accommodations and services, which may include reservations, suites, public dining and banquet facilities, lounge and entertain- ment areas, room service, cable television, personal computers, business services, meeting rooms, specialty shops, personal services, valet, laundry, hair care, swimming pool and other recreational activities, gaming/casino operations, ground transportation to and from an airport, and concierge services. The size of the property can range from 20 to more than 2000 rooms. Hotels are found in center-city, suburban, and airport locations. Guest stays can be overnight or long term—as long as several weeks. Properties sometimes spe- cialize in catering to particular markets, such as conventions or gambling. Casino hotels usually take a secondary role to the casino operation, where the emphasis is on profit- able gaming operations. Marriott’s hotels operated as JW Marriott Hotels & Resorts and Renaissance Hotels & Resorts, as well as Hyatt brands operated as Hyatt Regency Hotels, Grand Hyatt Hotels, and Park Hyatt Hotels, are examples in this category. FIGURE 1-4 Photo courtesy of Waldorf=Astoria Hotel, New York City. c01IntroductiontoHotelManagement15 Page 15 9/15/10 9:51:25 AM user-f391 /Users/user-f391/Desktop/15:09:10 T Y P E S O F L O D G I N G FAC I L I T I E S 15 Motels Motels offer guests a limited range of services, which may include reservations, vending machines, swimming pools, and cable television. The size of these properties averages from 10 to 50 units. Motels are usually in suburban highway and airport locations. Guests typically stay overnight or for a few days. Motels may be located near a freestand- ing restaurant. All-suites The all-suites concept was developed in the 1980s as a separate marketing concept. These hotels offer guests a wide range of services that may include reservations, living room and separate bedroom, kitchenette, optional public dining room and room service, cable television, videocassette players and recorders, specialty shops, personal services, valet and laundry, swimming pool, and ground transportation to and from an airport. The size of the operation can range from 50 to more than 100 units. This type of property is usu- ally found in center-city, suburban, and airport locations. The length of guest stay can be overnight, several days, or long term. Although this type of hotel may seem relatively new, many downtown center-city hotels have offered accommodations with in-room kitchenette and sitting room since the H O S P I TA L I T Y P R O F I L E ? ? J oseph Longo is the general man- ager of The Jefferson Hotel, a 265-room historic property in Group. Prior to becoming general manager of The Jefferson Hotel, Mr. Longo was regional director of operations for the Field Hotel Association in Richmond, Virginia. One of only 17 Valley Forge, Pennsylvania. hotels in North America to receive both the Mobil The sales and marketing effort for this indepen- Five Star and AAA Five Diamond ratings, The dently owned property requires aggressive sales Jefferson Hotel offers guests the highest level of and public relations strategies. Focus is placed not products and services available, with a strong com- only on the guest rooms but also on the 26,000 mitment to warm, genuine, and gracious service. square feet of function space and the two restau- Mr. Longo obtained B.S. degrees in business rants, one an AAA Five Diamond Award winner. administration and communication from Saint Mr. Longo encourages students who are pursu- John’s University in New York. While in college, ing a hospitality management career to remember he worked at the front desk at The Saint Regis that, as innkeepers, the hotel is like your home, Hotel in New York City and began his profes- where all of your guests are made to feel welcome. sional career at the Sheraton-Carlton Hotel in This means providing all guests with the basics of Washington, DC, as the rooms division manager. hospitality: a comfortable room, exceptional food, He then became general manager of The River Inn and a friendly staff to serve them. He adds that hotel in Washington, DC, and then the regional hospitality is a diverse business, offering a unique director of operations for the Potomac Hotel work experience each day. c01IntroductiontoHotelManagement16 Page 16 9/15/10 9:51:26 AM user-f391 /Users/user-f391/Desktop/15:09:10 16 CHAPTER 1 INTRODUCTION TO HOTEL MANAGEMENT early 1900s. Now, with mass marketing—advertising products and services through mass communications such as television, radio, and the Internet—this type of hotel is consid- ered “new.” Examples of the all-suite concept include Hilton’s Embassy Suites Hotels and InterContinental Hotels’ Candlewood Suites. Select-service Hotels Select-service hotels appeared in the mid-1980s. Hampton Inn and Marriott were among the first organizations to offer select service properties. The concept of select service was developed for a specific segment of the market: business and cost-conscious travelers. The range of accommodations and s