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Copyright © 2010 by John Wiley & Sons, Inc. All Rights Reserved.

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1 Copyright © 2010 by John Wiley & Sons, Inc. All Rights Reserved

2 LODGING The lodging industry has been in existence ever since the first traveler looked for a place to spend the night (thousands of years ago) Over the years, these facilities have evolved and have been known as hotels, motels, inns, taverns, ordinaries, etc. We use the term “lodging” to characterize the overall category of facilities

3 LODGING TODAY The lodging industry is a huge segment, by any measure  Over 49,500 properties  Over 4.6 million guest rooms  Generates over $40.6 billion in revenues  Supports more than 7.5 million jobs

4 THE EVOLUTION OF LODGING Structures built specifically for overnight accommodation have been around for thousands of years dating back to Mesopotamia which was a center for commerce Hotels in the US date back to the late 1700s and the early 1800s including hotels in Boston, New York, Chicago, and Philadelphia Important features of early hotels included location and accessibility to transportation

5 THE EVOLUTION OF LODGING “Grand” hotels were later built in resort areas, city centers, and along transportation routes – Waldorf Astoria, Palmer House, Tremont Hotel The Tremont (in Boston) was the first to offer guests their own room! Other “Grand” hotels were built in the 1800s and early 1900s, each offering a new amenity or feature

6 THE EVOLUTION OF LODGING First developed in California in 1925, motels (Motor Hotels) are a relatively recent development Holiday Inn was the first well known chain of “motels” built in the US (1952) Holiday Inn was started by Kemmons Wilson after a family vacation There have since developed many different types of lodging facilities focusing on different customer needs (example: guest suites)

7 CRITERIA FOR CLASSIFYING HOTELS Price (or service) Function Location Market segment Distinctiveness of style or offerings

8 HOTELS CLASSIFIED BY PRICE Limited-service hotels Select-service Full-service hotels Luxury hotels

9 CLASSIFYING HOTELS BY PRICE LIMITED-SERVICE HOTELS Usually no public meeting space and limited food and beverage Typical ADR is between $80.00 and $90.00 and the average number of rooms is 122 Examples include Holiday Inn Express, Comfort Inn, Rodeway Inn, and Fairfield Inn

10 CLASSIFYING HOTELS BY PRICE SELECT-SERVICE HOTELS Relatively new addition to lodging; akin to addition of fast-causal restaurants in the food service sector With 100 to 200 guest rooms, focus is on value and a cheaper alternative to full- service properties Hot breakfast service and sometimes other food service is offered along with limited meeting space

11 CLASSIFYING HOTELS BY PRICE FULL-SERVICE HOTELS Have a wide range of facilities and services including public meeting space and choice of food and beverage Typical ADR is over $ Business and leisure travelers represent 57.3 percent of room sales Average size is 272 rooms

12 CLASSIFYING HOTELS BY PRICE LUXURY HOTELS Have a wide range of facilities and services offered in an upscale environment including concierge and multiple dining options Rooms number between 150 and 500 Higher ratio of employees to guest room Typical ADR is over $ Industry leaders include Ritz-Carlton, Four Seasons, and Fairmont

13 CLASSIFYING HOTELS BY FUNCTION Convention hotels – Typically more than 500 rooms – Often located near convention centers Commercial hotels – Smaller than convention hotels with 100 to 500 guest rooms – Typically in downtown locations

14 CLASSIFYING HOTELS BY LOCATION Downtown hotels Suburban hotels – Typically have 200 to 350 guest rooms and interior corridors Highway/interstate hotels – 100 to 250 guest rooms Airport hotels – 250 to 550 guest rooms

15 HOTELS CLASSIFIED BY MARKET SEGMENT Where different types of hotels have been built to respond to specific traveler needs  Executive conference centers  Resorts  Casino hotels  Health spas  Vacation ownership

16 CLASSIFYING HOTELS BY OFFERINGS All-suite hotels Extended stay hotels Historic conversions Bed and breakfast inns Boutique hotels The beautifully restored boutique hotel, the Regent Wall Street

17 PRINCIPAL CUSTOMER TYPES Leisure or vacation travelers Transient business travelers ─ individual traveling alone Business travelers attending conferences International travelers SMERF – social, military, educational, religious, and fraternal

18 WHAT’S CHANGING? Increasing competition (subject of Chapter 12) In-room technology Unique hotels Increased service levels Blurring of segments

19 WHAT’S CHANGING? Increased business travel Increased occupancy in city hotels Rising room rates Condo/time share conversions


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