Standard 2: Objective 1 Travel and Tourism Marketing THE LODGING INDUSTRY Evolution of the Hotel~ INN – Ancestor to the hotel Small, people shared rooms AND beds. Cleanliness was a problem – bed bugs/fleas! Indoor plumbing – 1800’s Hotel Industry Milestones U.S.A. and Canada – First Hotels USA First grand hotel – Boston’s TREMONT HOUSE. $2/day which included 4 meals! Started the “Chain Hotel” concept and private baths in each room – Ellsworth Milton Statler Greatest Hotelier of all time – Ce’sar Ritz Hotel Industry Milestones cont. First No-frills motel – Motel 6 – 1963 ($6/night) First Atrium Motel - Hyatt Regency in Atlanta Hotels traditionally were established near TRANSPORTATION CENTERS Conrad HILTON… Sometimes called, “The Biggest Hotel Man in the World” He catered to the American Business Traveler Also opened up the Caribbean for leisure travel Hotel Classifications Location Guest Type Price Style and Function HOTEL Location Resorts – great locations, lots of amenities/activities Airport – business or leisure AND airline employees Freeway access – usually for one night guests traveling to another destination Downtown (bigger cities) – near shopping or business Conference Centers - convention/meetings HOTEL Guests Business Guests – Business, conventions, meetings Leisure Guests – Vacation for pleasure HOTEL Price BUDGET (or Economy): Inexpensive, limited services (Comfort Inn, Motel 6) MID PRICE: More services than budget (Holiday Inn Express, Courtyard) UPSCALE (luxury): Great locations, many services and amenities (Grand America, Hyatt Regency) HOTEL Style and Function All Suite: Larger rooms, separate living areas Extended Stay: More space for guests needing to stay for longer periods of time (kitchenettes) Bed-n-Breakfasts: Fewer rooms, lots of personal service AND cooked breakfast. HOTEL Style and Function Spas: Health related services (Biggest Loser at Fitness Ridge) Vacation Properties (Time Shares): Guests can “buy” a lodging location for period of time Retreat Centers: Business travelers who want a secluded location. Yield Management Setting different prices for goods and services in an effort to maximize revenue when limited capacity is a factor. Yield Management Pricing Average Daily Balance (ADR) Occupancy percentage (OCC%) Total sales / total number of rooms = ADR Number of rooms sold / # of rooms available = OCC% Revenue per available room (RevPAR) Revenue / total rooms available = RevPAR Room Rate Variables Room size and amenities Location of the room (ocean view or parking lot) Number of people in the room Group, corporate or convention rate Taxes, (each city is different), resort & service fee’s Season Cost of operation and quality of services Currency fluctuations Hotel prices are quoted WITHOUT taxes, service charges or resort fee’s. Hotel Room Rates Rack Rates – price of a room “originally” Frequent-guest incentives – rewards for members with each stay. Can earn points for free nights. Weekend Rates – in cities, where business traveler’s usually stay.