Introduction to Hospitality- Chapter 4


Terms in this set (...)

How many properties are in the lodging industry?
The lodging industry is worth how much?
$155 Billion
How many guest rooms to lodging properties have?
True or False the Average occupancy is 96% and the Average rate is 62%
False Average Occupancy rate
What are the external environmental influences on the hotel industry, design, construction, marketing and operations?
Marketing segmentation
Vacation resorts
changes in peoples travel pattersn
new investment patterns in hotels.
What are the three recent challenges to the Hotel Industry?
Huge capital Investment


What is the driving force in hotel development and operation?
1.) Franchising

2.) Management Contracts
What are the four Components of Hotel Development
1.) Feasibility Studies
2.) Appraisals
3.) Real Estate Financing
4.) Hotel Management
Define Franchising
"A concept that allows a company to expand more rapidly, by using other peoples money."
Franchisee receive
use of the product and access to, all other systems and standards associated with the business.. both for and initial fee and an ongoing fee structure.
Average agreement between a franchisor and a franchisee agrees to a fee based on what percent of room revenue?
True or False
Franchising began in 1907 in Europe
False- Franchising began in 1907 in America
Who makes 3-4% of Rooms Revenue the franchisor or the franchisee?
True or False Franchising Eliminates all risk and profits are always guarenteed
False- Minimizes risk but profits are not guarenteed
How many brand extensions and franchises are in the U.S.
180 Brand Franchises
Benefits to a Franchisee.
A recognizable brand name
Building plans
National advertising
CRS system
Volume discounts
Listing in the franchisor's directory
Low credit card percentage
CRS system stands for _________________________?
Central Reservation System
What are the four Drawbacks to the franchisee are
1.) High fees
2.) CRS produce only 17-26% of reservations
3.) Conformity to Franchise Company
4.) Must maintain all standards set by the franchisor
Benefits to the franchise company
Increased market shares
Up-front fees
The drawbacks to the franchise company
Need to carefully select franchisees

Difficulty maintaining control of standards
Does the franchisee have full, daily operating control and responsibility?
Staffing, Renovations, Budgets, Advertising, Suppliers are all major decisions and responsibilities of the franchisee or or the franchise company?
The Franchisee
Franchise Agreements include
- Use of Trademarks
- Location of the Franchise
- Term of the franchise
- Franchisee's Fees and other payments
- Obligations and duties of the franchisor
- Restrictions on goods and services offered
- Renewal, termination, and transfer of franchise agreement
What are the 5 factors propelling franchise growth?
1.) Fresh looks
2.) Location
3.) Expansion in smaller cities throughout the U.S.
4.) New markets
5.) Foreign expansion
Management Contracts
How does a management company work?
Hotel owners hire a proven company to manage their entire operation, lend their name, hire and train, with responsibility for the bottom line (profitability)
True or False
Management contracts drive the hotel industry growth since 1970's
The five main responsibilities of a management company are
1.) Pre-opening
2.) Market and sales
3.) Selection and training
4.) preparation of operating budget
5.) Day to day operations
What are the largest chains in franchise or management company hotels?
Wyndham worldwide
Choice hotels international
Intercontinental hotels
Hilton world wide
marriot international
True or False
Hotel development is always a response to travelers needs.
U.S. hotels first sprung up along which mode of transportation
Train stations
What 1916 legislation gave rise to the Motel
Federal Road Act 1916
By 1900 there were less than how many hotel rooms in the U.S.
What are the 6 Segments of Hotels
1.) Price
2.) Function
3.) Location
4.) Marketing Segment
5.) Distinctiveness of style
6.) Offerings
What are the three categories of hotels?
1.) Limited Service
2.) Full Service
3.) Luxury
Limited Service average rate is
Full Service average rate is
Luxury average rate is
What are the two types of Ratings for hotels
AAA Diamond

Mobile Travel Guide 5 Star System
What are the levels of service for hotels
1.) Full service
2.) Luxury
3.) Mid-scale
4.) Extended stay
5.) Limited service
6.) Economy
Limited service hotels have what occupancy percentage
Mixed Use Properties are
- hotel and residence combined
Hotel and Condominium
can be owned, rent, or hotel room
Where did Bed and Breakfast originate?
How many Bed and Breakfasts are there in the U.S.
25,000 properties
Vacation Ownership
What is the Fastest growing segment of U.S. travel and tourism industry?
Vacation Ownership
Vacation owner is a fancy name for what?
Time share
each year vacation ownership increases by what percent?
15 %
What are the different types of time share programs?
What are the different types of hotels?
What is the fastest growing segment of the U.S. lodging industry?
Vacation Ownership
What time of lodging allows guests to use points as currency?
Vacation Ownership
True or False
You are never locked into a time constraint with vacation ownership
False- Sometimes you are locked into a time constraint with vacation ownership
Which Type of hotels enjoy a high occupancy rate, a guest mix of business, meeting and leisure travelers, are full service, always have food offerings and have 1 night stays majority of the time.
Which types of hotels are marketing themselves as business hotels
Casinos and airport hotels
True or False
Management Contract Allow hotel owners with no experience to use their name and expertise (for a price)
True or False
Franchisers take a risk when franchising their brand
True or False
Franchising and management contracts allow companies to expand using other peoples money.
True or False
Management Contracts are often based on a fixed dollar amount.
True or False
Resorts, budget hotels, city hotels, and casino hotels make the majority of their money from room revenue.