Prepared by: Bachelor of Science in
LIZYL S. DALIDA-GARAY TOURISM MANAGEMENT
MICRO
PERSPECTIVE IN
TOURISM AND HOSPITALITY
CHAPTER II
Accommodation Sector
TOPICS
A. Introduction B. History and Development of
Accommodation
C. Types of Lodging D. Classification of
Properties Hotels
E. Rating System F. Business Affiliations
G. Organization and Basic
Structure of the Lodging
Industry
LEARNING OBJECTIVES
A. Explain the historical development of the hospitality
industry and how it has evolved to meet the needs of travelers.
B. Differentiate various types of lodging facilities and hotel
classification.
C. Identify the basic management structure of a hotel.
B. Accommodation Sector
A. INTRODUCTION
The United Nations World Tourism Organization (UNWTO) estimates that the world hotel room inventory
grows by about 2.5 percent a year. Occupancy rates vary, but they average about 65% overall in a normal
year. Such places as London, Beijing, New York, San Francisco, Hawaii, the Caribbean area, and the city of
Las Vegas are noted for higher occupancy rates.
Technology has had a profound influence on the lodging industry in recent years. Over 90% of hotel
companies have Web sites, and industry surveys show that business travelers want internet access in
their guest rooms. Many hotels are becoming wireless. Online expenditures for hotel bookings are
increasing. Self-service check-in and check-out continues to grow as self-service kiosks are multiplying.
The kiosks are located in the lobby and allow the guests to check in or out of the hotel by simply swiping
their credit card, eliminating the need to go to the front desk. The kiosks are similar to the ones used by
the airlines. Major chains, such as Hyatt, Hilton, Marriott, Sheraton, and Fairmont, are installing kiosks that
allow busy customers to check themselves in and get a key.
The lodging industry has increased their emphasis on market segmentation in recent years. Many of the
big chains offer products at almost every price level: full-service luxury hotels, luxury all-suite hotels,
resort hotels, moderately priced full-service hotels, moderately priced all-suites, moderately priced limited-
service, and economy or budget motels. Hotels and motels are classified in a variety of ways. One of the
most common is by location, such as resort, city center, airport, suburban, or highway.
B. Accommodation Sector
B. HISTORY AND DEVELOPMENT OF ACCOMMODATIONS
Derived from the Latin word “hospes”, meaning host (one who provides lodging or entertainment for a
guest or visitor), hospitality has its roots in ancient history. The ancient Greeks used the word "xenia" to
define the sacred rule of hospitality: the generosity and courtesy shown to those who are far from home
or associates of the person bestowing guests friendship. Away from home, surrounded by strangers and
yet feeling welcome.
In Old times, locals used to let the travelers rest on kitchen floors or other extra spaces during their
journey. There were no purpose-built resting facilities for tourists until monasteries decided to build one.
This gave birth to lodging services. In the late 1700s, Inns came into being. Inns were nothing but a shelter
by the road where travelers can stop to take rest and get some food. They would also take care of
traveler’s horses while they rest. This is the time when the seeds of the modern hospitality facility were
planted. What we see today is the growth of the past two millennia.
The earliest guest rooms were parts of private dwellings, and travelers were hosted almost like members
of the family. In the Middle East and in the Orient, caravansaries and inns date back to antiquity. In more
modern times, first the stagecoach and then railroads, steamships, the automobile, motorcoach, and
airplane expanded the need for adequate accommodations. The railroad brought the downtown city hotel,
the automobile and motorcoach brought the motel, and the airplane led to the boom in accommodations
within or near airports. Accommodating—housing, feeding, and entertaining—travelers is one of the world’s
most important industries.
B. Accommodation Sector
C. 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, personal 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 entertainment 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
specialize 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 profitable 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.
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 freestanding 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 usually 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 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 considered “new.”
Examples of the all-suite concept include Hilton’s Embassy Suites Hotels and InterContinental Hotels’
Candlewood Suites.
B. Accommodation Sector
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
services may include reservations, minimal public dining and meeting facilities, cable television, personal
computers, personal services (valet and laundry), and ground transportation to and from an airport. The
size of the property can range from 100 to more than 200 rooms. Select-service hotels are found in center-
city, suburban, and airport locations. They are usually located near restaurants for guest convenience.
Guest stays can be overnight or long term. These properties sometimes specialize in catering to the
business traveler and offer special business technology centers. Select-service hotel properties include
Holiday Inn Express, operated by InterContinental Hotels Group; Comfort Inn, by Choice Hotels
International; and Marriott’s Fairfield Inn.
Extended-stay Hotels
Extended-stay properties were designed to offer guests a home-away-from-home atmosphere over long
stays precipitated by business, leisure, or personal necessity. For example, a person may have to attend to
a business project for several days or weeks; another may want to visit with relatives whose home does
not have adequate accommodations for visitors; a third may be accompanying a relative or friend
receiving an extended health treatment at a medical center and require overnight accommodations. The
patient himself may appreciate the homelike atmosphere of the extended-stay hotel in which to recover
between treatments. At Hilton’s Homewood Suites, the following room amenities are included: king-size
bed or two double beds in the bedroom and foldout sofa in the living room; two remote-controlled color
televisions; fully equipped kitchen with a microwave, refrigerator with ice maker, coffeemaker, twin-burner
stove, and kitchen utensils; a spacious, well-lit dining area; ceiling fans; iron and ironing board. Additional
hotel services include a business center, an exercise room, and a pool. This hotel concept also structures
its room rates to attract the long-term guest.
D. HOTEL CLASSIFICATION
Hotels are classified based on several factors such as size, target market, location, available facilities, the
level and type of service, affiliation, and ownership. Apart from these parameters, hotels can also be rated
according to the Crown Star, or Diamond system, which depend on their geographic location. These
classifications help visitors and guests to have an overview of a hotel even before visiting the property in
person. As a result, classification plays an essential intermediary role in facilitating trade and trust
between the property and the customer.
B. Accommodation Sector
Based on Size Based on Services
Small Full-Service
Medium Select Service
Large Extended Stay
Very Large
Based on Ownership
Based on Star Chain
1 Star Referral
2 Stars Company-Owned Property
3 Stars Management Contract
4 Stars Independent
5 Stars
Based on Location
Downtown Hotel
Sub-urban Hotel
Resort Hotel
Airport Hotel
Motel
Business Hotel
Transient House
Boutique Hotel
Bed & Breakfast
Casino Hotel
Conference Hotel
Green Hotel
B. Accommodation Sector
E. RATING SYSTEMS
In the years before the growth of franchises and referral chains, travelers depended on rating guides to
direct them to hotels or motels. Now, the name of a franchise or chain implies a certain level of quality in
service, price, and accommodations, and travelers in the United States do not rely so heavily on ratings.
Nevertheless, hotel ratings are still important. Domestically, the American Automobile Association (AAA)
and Mobil are among the most influential rating services. And in international travel, hotel guides and
ratings remain very important.
The AAA is one of the most widely recognized rating services in the United States. It publishes a series of
Tour Books that rate hotels using a system ranging from one diamond, representing a good basic facility,
to a high of five diamonds, designating an exceptional establishment. Accommodations that do not meet
AAA’s minimum standards are not listed in the books. Mobil Travel Guides, like the AAA Tour Books, are
revised and published annually.
Mobil uses a five-star rating for its highest-ranking hotels or motels, and one star to designate hotels that
are “good, better than average.”
Numerous other publishers rate hotels and motels around the world. Two of the more widely known travel
guide series are Frommer’s and Fodor’s. In addition, many specialty guides are written to appeal to
particular audiences such as business travelers, the budget-minded, or those traveling with children.
Travel professionals, in particular, refer to the Hotel & Travel Index, which provides information on
thousands of hotels, resorts, lodges, and motels around the world. The Hotel & Travel Index is updated four
times per year. Travel agents may use the index to find basic information before accessing a CRS for
specific hotel availability and reservations.
F. BUSINESS AFFILIATIONS
Business affiliations, which indicate either chain or independent ownership of hotels, also categorize the
hotel industry. These classifications are the most easily recognizable by consumers with regard to such
features as brand name, structural appearance, and ambience. Long-lasting marketing effects develop a
brand loyalty and acceptance that are most important in long-term profitability for a hotel.
Chain Affiliation
When asked to name several chain operations (a group of hotels that follow standard operating
procedures such as marketing, reservations, quality of service, food and beverage operations,
housekeeping, and accounting), most people would probably mention Holiday Inn, Marriott, Sheraton, Days
Inn, Hyatt, Hilton, or EconoLodge.
Chain affiliations, which include hotels that purchase operational and marketing services from a
corporation, are further divided into franchisee, referral, company-owned properties, and management
contract companies. Franchise corporations offer support to the franchisee, who is the owner of the land
and building, in the form of reservation systems, advertising, operations management, and management
development. In return for these services, the franchisee pays fees for items such as initial start-up, rental
of signs and other equipment, use of the corporation’s reservation referral system, and national
advertising, among others.
B. Accommodation Sector
Referral Property
Sometimes a hotel organization will choose to become a referral property, a hotel operating as an
independent that wishes to be associated with a certain chain. Since the property has been physically
developed, the entrepreneur may only want assistance with management, marketing and advertising,
and/or reservation referral. Likewise, the fees are based on services required. The chain’s quality
assurance standards must, however, also be met by the referral property.
Company-Owned Property
A company-owned property, a hotel that is owned and operated by a chain organization, allows the hotel
company developer to act as an independent entrepreneur. The hotel company developer operates the
hotel property in competition with all other properties in the area. It uses its own expertise in site
selection, property development, marketing and advertising, and operations management. The hotel
company developer recruits talented professions into the organization to manage such properties. It uses
the chain’s reservation system. The hotel company developer may set a limit on the number of franchises
so that a majority of the properties remain company-owned.
Management Contract Property
A management contract property, a hotel that is operated by a consulting company that provides
operational and marketing expertise and a professional staff, is similar to a referral property. There are
several management contract organizations that develop business relationships with existing hotels and
operate the hotels as their own. Their business relationship requires financial accountability and
profitability. Management contract companies may choose to operate each hotel as a member of a
franchise or as an independent.
Independent Properties
An independent hotel is one that is not associated with a franchise. It provides a greater sense of warmth
and individuality than does a property that is associated with a chain. Independent hotels have particular
characteristics, which include an owner who functions as a manager, room rates similar to chain
properties, rooms decorated in different styles, and inviting dining rooms. These hotels may be residential
or commercial, with locations in the center city, suburbia, along the highway, or near an airport. The
number of rooms can range from 50 to 1,000. They may offer full services to the guest, including suites,
dining room, room service, banquets, gift shop, beauty shop, athletic facilities, swimming pool, theaters,
valet services, concierge, and airport shuttle service. Some older independent hotels have refurbished
their suites to capture their share of the all-suites market. The independent entrepreneur operates his or
her business without the advantages of consultation and assistance. This person may have worked for a
large chain or gained a great deal of operations and development experience in the industry. He or she
may also purchase a hotel property to balance an investment portfolio.
B. Accommodation Sector
G. ORGANIZATION AND BASIC STRUCTURE OF THE LODGING INDUSTRY
The objective of most hospitality establishments is to produce a profit. To meet this goal, factors such as
current economic conditions, marketing plans, competition, and staff size and ability are constantly
reviewed.
The General Manager, the person in charge of directing and leading the hotel staff in carrying out its
financial, environmental, and community responsibilities, develops organization charts that fit his or her
plan to meet the goals of the company. The organization charts—schematic drawings that list management
positions in an organization—included in this chapter are offered as instructional examples only. An
organization chart represents the span of control for the general manager. Not all hotels have every
position listed in these organization charts. Persons pursuing a career in the hotel industry will be called
on many times to develop or restructure an organization. The people who are part of these operational
plans will have a direct influence on the type of structure developed or reorganized. The goals of the
organization must be paramount in the decision-making process. However, flexibility is necessary to make
the plan work. This section points out the major organizational features of a lodging property and typical
managerial duties of the people within the organization.
It is not uncommon for the general manager of a property to move people from department to department
of the hotel. This is done for many reasons. The Front Office Manager, the person responsible for leading
the front office staff in delivering hospitality, may express interest in the position of Controller, the
internal accountant for the hotel, or in a position in the marketing and sales department. The general
manager realizes a candidate must possess certain skills before being placed in any new position. To
prepare someone for an opening in the controller’s office, the general manager may assign him or her
some of the controller’s busywork. The front office manager might also spend slack periods with the
Director of Marketing and Sales, the person who analyzes available markets and sells products and
services at a profit, to become familiar with that department.
The General Manager may also use the weekly staff meeting to explain the financial condition and
marketing plans of the property. This tactic reinforces the management team concept. By exposing
interested employees to the responsibilities of other departments and by keeping the staff informed of
the current situation of the property, the General Manager enables staff members to meet their career
goals within the organization.
B. Accommodation Sector
BASIC STRUCTURE
Prepared by: Bachelor of Science in
LIZYL S. DALIDA-GARAY TOURISM MANAGEMENT
CHAPTER II
Accommodation Sector
END OF MODULE
MICRO
PERSPECTIVE IN
TOURISM AND HOSPITALITY
