Summary Slide zModern Hotel Innovators zLodging Management Associations zHotel Revenue Sources zProfit Margin–Room Cost zProfit Margin–Food Cost zOpportunity Cost zCaptive Audience Quotient zInternet Exercises zHotel Web Sites Figure 1-1

Modern Hotel Innovators zEllsworth Statler zConrad Hilton zJ. W. Marriott zKemmons Wilson zJay Pritzker zWhat three innovators emerged at about the same time in history? Figure 1-2

Lodging Management Associations zOwner-operated zOwner-managed zIndependent zFranchised zManagement contract zWhat are the similarities and differences between franchising and management contract? Figure 1-3

Greater Quality Control Higher Fee to Owners Less Owner Control Higher Employee Standards Higher Performance Expectations Less Quality Control Lower Fee to Owners Greater Owner Control Varying Levels of Employee Experience and Training Shared Benefits Brand Recognition CRS National Marketing Support Standard Operating Procedures Differences ManagementContracts Franchising Lodging Management Association Figure 1-4

Hotel Revenue Sources zSleeping Rooms zMeeting/Function Space zOutlets/Ancillary zWhy is this relationship so important? Figure 1-5

#2 Selling meeting/function space to utilize it’s best potential #1 Selling as many sleeping rooms as possible #3 Maximizing the capacity of the outlets and ancillary profit centers through the selling of #1 and #2 + + Successful Hotel Equation Figure 1-6

Profit Margin zRoom Cost Room Rate - Room Cost = Profit Margin Figure 1-7

Profit Margin zFood Cost Food Cost = Purchase Price/Menu Price Figure 1-8

Opportunity Cost zEach night, when a room goes unsold, the hotel loses the opportunity to ever sell it again. A hotel cannot regain that opportunity. zThe “Empty Room Theory” states that once a room goes unoccupied, it is gone forever. zWhy does opportunity cost differ in catering/outlet food and beverage sales? Figure 1-9

Captive Audience Quotient zApplies to both outlet/ancillary sales and catering sales. zA guest staying at a hotel is more likely, for convenience and other reasons, to choose at least once some outlet of the hotel (if it offer such services). zCatering traffic at a hotel benefits by the captive audience quotient, also called the group catering contribution. Figure 1-10

Chain Histories Internet Exercise yIn this chapter histories of Hilton, Marriott, Holiday Inn, and Hyatt were briefly discussed. yUsing the Internet (sample URLs are provided following the questions), choose a different hotel chain and obtain any printed materials you can about their beginnings and history. Answer the following questions: Figure 1-11

zWhat is the name of the hotel chain you selected? zWhen was the hotel chain established? zWhat was the name of the first hotel in the chain? zWhere was it located? zWho was the person or persons who started the chain? Figure 1-12 Chain Histories Internet Exercise

zHow many hotels are now in this chain? zHow long has this chain been in operation? zWhat types of hotels does this chain operate? zWhere is the corporate office for this chain located? Has it changed locations? zHas there been any mergers or acquisitions within this chain? Figure 1-13 Chain Histories Internet Exercise

zDoes this chain have more than one brand in its repertoire? zWhat unique thing did you learn about this chain that you didn’t know before? zWhy did you choose this chain? zDescribe the hotel in this chain that you would most like to visit. zWould you like to work for this hotel chain? Why or why not? Figure 1-14 Chain Histories Internet Exercise

zIs this chain publicly traded? If so, what is the current stock price? zWhat is the stock price history during the past 12 months? zWhat factors have been involved in any fluctuations over the past three years? zWhat is the current focus of this chain? zWhat percentage of this chain’s properties are corporately owned? Figure 1-15 Chain Histories Internet Exercise

Hotel Web Site Home Pages For this case study, try one of the following web sites: Accor Adam's Mark Amerisuites ANA Aston Best Western Figure 1-16

Cendant Choice Dorint Drury Elegant Resorts Fairmont Hotel Web Site Home Pages Figure 1-17

Fiesta Americana Four Seasons Golden Tulip Harrah's Hilton Hyatt Jameson Loews Hotel Web Site Home Pages Figure 1-18

Le Meridian Mandarin Oriental Manhattan East Suite Hotels Marriott Metropolitan Nikko Noble House Hotel Web Site Home Pages Figure 1-19

Omega Omni Outrigger Park Place Radisson Red Carnation Regal Ritz Carlton Rosewood Royal Sierra Suites Sholodge Hotel Web Site Home Pages Figure 1-20

Sonesta Station Starwood Swissotel SRS Summit Hotel Web Site Home Pages Figure 1-21

Super Clubs Thistle Trump US Franchise Systems Walt Disney World Resorts Warwick Wyndham Hotel Web Site Home Pages Figure 1-22