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Check-in Check-Out Managing Hotel Operations, 9e Gary Vallen Jerome Vallen
(Solutions Manual All Chapter)
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C H A P T E R 1
The Traditional Hotel Industry
Preparing The Lecture
:
- Use the chapter outline (provided on its own page for distribution or overhead use) to
structure the week’s work. Better still: Use the Power Point.
2. Aim to develop specific objectives for the students:
• A framework of historical reference that will document the direction of hotel development and demonstrate the industry's vibrancy across the centuries.• An appreciation for the magnitude of the hotel industry and the variety of its products.• A sense of the cyclical nature of the lodging industry.• A desire to build a technical vocabulary as an entree to the profession and a prerequisite to understanding the lectures and reading materials that follow.• An ability to compute and comprehend the three, basic formulas: Percentage of Occupancy (%); Average Daily Room Rate (ADR); and Revenue Per Available Room (RevPar).
3. Establish lecture goals, which might include:
• Identifying the hotel type, plan, and estimated rate whenever a hotel brand is named during the class hour.• Distinguishing between plans and differentiating these from classes of hotels.• Understanding the limitations of rating systems especially outside of the United States.• Describing the service culture and the impact technology has played in recent decades. This might include a preliminary discussion on how the shift to newer but less personal forms of service (self-check-in and check-out, for instance) impacts the role of the hospitality service provider in the 21 st century.• Touch on the impact of social network sites (including travel blogs, Twitter, and Facebook) on the industry.• Present the idea that BECAUSE the hotel industry is so dynamic in nature, it can provide an exciting career path.
What The Chapter Is All About
:
The introductory unit explains the hotel business. Students better understand the rooms division if they appreciate the history, magnitude and culture of the industry. Chapter 1 does this using several techniques. A brief history of hotelkeeping emphasizes its changing profile. Definitions, specialized vocabulary, and basic industry formulas introduce terminology that is prerequisite both to professional membership and a better understanding of the material to come.The hotel industry makes a major economic contribution to the global economy by serving both business and tourism development. When the economy is strong, the lodging industry is generally strong. But just as the economy has its cycles of good times and bad, so does the hotel 2 / 4
2 business. Factors such as oil prices, inflation, and terrorism impact the fiscal health of lodging industry. The industry's ups and downs reflect the limitations inherent in hotelkeeping. (1) The product is perishable – a room not sold tonight is lost forever. (2) The location and product inventory (rooms) are fixed – they cannot be moved as demand patterns change. (3) Entry into the business takes large amounts of capital – creating huge fixed costs that necessitate high occupancies to achieve break-even status. (4) Activity is seasonal – with all the adjunct problems of operating an ebb-and-flow business. All of which contributes to boom-and-bust cycles as business volume lags or exceeds the industry's break-even point.
Hotelkeeping is a varied business. Hotels differ in size (as measured in number of rooms); in class (of services rendered); in purpose of use (type of hotel); and in plan offered (meals provided or not). Worldwide, most governments – with the United States the major exception – have classified and formalized these differences into rating systems.
Room rate is one measure used by the industry worldwide. Average Daily Rate (ADR), is a helpful indicator for guests, but serves managers, owners and lenders equally well. Percentage of Occupancy is another standardized measurement. In some countries, it is a ratio of the number of rooms sold to the number of rooms available for sale. Many other countries, as well as the international organizations that monitor the industry, use a Percentage of Bed Occupancy (number of beds sold as a ratio to the number of beds available) as the measuring norm.
Some Chapter Highlights
:
What Is The Hotel Business? The quantitative value of the business (market share) is measured in Percentage of Occupancy (Number of Rooms Occupied ÷ Number of Rooms Sold). The qualitative value of the business (the class of hotel) is measured by Average Daily Rate or Sales Per Occupied Room (Room Sales Measured in Dollars ÷ Number of Rooms Sold).Traditional Classifications are used to identify the many segments that now comprise the industry. The size and location of the property, its services and charges (including the various “plans” for including meals in the daily room rate), and the nature of its clientele (leisure, business, discount, convention, etc.) are among the traditional identifications. Chapter 2 offers additional groupings, new classifications that have emerged as the industry adapts its profile to a changing society. Along with the basic math principles (ADR, occupancy, RevPar), vocabulary words and terms are also introduced in this chapter as a means for developing industry professionalism. Key concepts such as break-even point, perishability of inventory, seasonality of demand, full-service to limited-service classifications, employee-to-room ratios, and rating systems are all presented in this chapter. They lay the foundations on which the student builds understanding and clarity.
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CHAPTER 1
THE TRADITIONAL HOTEL INDUSTRY
Chapter Outline
:
UNDERSTANDING THE HOTEL BUSINESS
The Service Culture A Cyclical Industry How Hotels Count and Measure Occupancy Sales per Occupied Room RevPar (Revenue per Available Room) Double Occupancy Break-even Point Special Characteristics of the Hotel Business Perishability Location Fixed Supply High Operating Costs Seasonality
TRADITIONAL CLASSIFICATIONS
Size Mom-and-Pop Motels Class Average Daily Rate Full-Service to Limited-Service Number of Employees Rating Systems Worldwide The U.S. System Type Commercial Hotels Residential Hotels Extended-Stay Hotels Resort Hotels The Megaresort Plan European Plan Continental Plan (Continental Breakfast) American Plan Modified American Plan Variations on the Themes Bed and Breakfast (B&B) Boutique Hotels Trophy Hotels
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