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Midterm Study Guide
Terms in this set (55)
brand; the sign/name that guests see
group; made up of multiple brands
may be a component of a Brand or may not be a brand affiliated
-operates a hotel for another company
-the company has contracts where it receives payment and/or some portion of profits
-may manage a variety of different chains as well as independent hotels
-some chains or parent companies manage their own hotels
What are multiple affiliations for a single hotel?
chain, parent company, management company, owner(s), and assest management company
What are the operation types?
chain/brand management, franchise, or independent
a hotel managed and/or owned by the chain or the parent company
a hotel run by a third party where the brand receives some sort of franchise fee
What are the fundamental benefits of franchising?
for franchissee- helps reduce risk
for franchiser- expands the brand with more locations at much fast than alone
What is Franchising?
A business strategy allowing one party (franchisee) to use the logo, trademarks and operating systems of another business entity (franchisor) in exchange for a fee.
A network of interdependent business relationships allowing a number of people to share the brand id, develop successful method of doing business and to establish a strong marketing and distribution system
a consumer who is unhappy with a product or service and takes every opportunity to share their disgruntlement with as many people as possible, often on social media.
usually an individual hotel not affiliated with a chain or parent company
a consumer who feels so positively about a brand or product that they will not only recommend the brand to others but will freely work to convince other consumers that the brand is superior to others in the marketplace.
a front desk staffer who can fulfll any request a guest may have during the course of their stay. In high-end, or luxury, hotels, this employee may act as a butler: booking dinner reservations, arranging transportation, and generally making the impossible possible!
the set of employees that has direct contact with guests
this broad term covers the entire guest experience, but here we emphasize the kind of service that includes a front desk staff that gives guests a lasting good impression of the business by maintaining a friendly and helpful attitude; it can set the hotel apart from competitors.
Property Management System (PMS)
a computer-based system used to manage, among other things, the central reservation system, rooms revenue, room rates, room assignments, guest history, and accounting information.
Average Daily Rate (ADR)
The average selling price of all guest rooms in a hotel or city for a specifed period of time.
The practice of offering low rates during periods of low demand in order to attract guests while offering higher rates during periods of high demand in order to maximize revenues.
A selection of competing hotels against which a property or chain measures its own performance.
Competitors are selected based on their location, service level, amenities, and physical condition.
A pricing strategy in which prices adjust daily or even more frequently to refect up-to-the-minute market information. Dynamic pricing is common in several industries, including hospitality and travel.
Information gathered about large groups of guests to identify common trends; examples include age, education level, income, and gender. This information is used by marketing departments to gain insight into how best to sell a product (such as a guest room or food).
programs that reward frequent customers
The ratio of guest rooms sold to the number of guest rooms available for sale in a given time period,
expressed as a percentage.
A situation in which a hotel books more guest reservations than it has rooms available, assuming that some guests will cancel or fail to show up.
Revenue Management (RM)
The process and procedures used to optimize RevPAR.
The person responsible for strategic decisions, who takes into consideration demand generation, market
positioning, and strategic pricing.
Revenue per Available Room (RevPAR)
The average revenue generated by each room available during a specifc time period. RevPAR combines the information from the ADR and the occupancy rate into a single measure. It gives a clear picture of how effectively rooms are being utilized as a means of revenue generation.
A strategy for flling as many rooms as possible each night; it principally involves a hotel accepting
more reservations than it has actual rooms available knowing there will be at least a few cancellations and no-shows.
An organization or event that drives customers into a marketplace; an activity or entity that produces demand.
The practice of offering discounted rates for specifc room types during specifc periods.
The practice of placing time constraints on reservations in order to accommodate guests who wish to stay
for an extended period.
the highest room rate charged by a hotel
The processes and procedures used to optimize RevPAR.
-there are many companies that own multiple hotels
-owners may own hotels from a variety of different chains/brands
-some chains/brands or parent companies/groups own their own hotels
aka the P&L
Aside from "operating profits" why else may owners invest in hotel?
- long-term (hoped for) effects of real estate price appreciation
- favorable effects of depreciation ("writing off" costs of building, equipment etc. which is generally tax deductible)
- desire to meet the needs of travelers/guests
- make the world a better place
a hotel investor who also manages (operates) the hotel
-can be an individual/their family members or a company
Investors with only one hotel will often a hire what/who?
a single General Manager
the traditional title of the individual at a hotel property who is responsible for final decision-making regarding property-specific operating policies and procedures
In the 1900's there were far more _______________ hotels than ___________ hotels.
What are the types of management companies?
first tier- branded operators or chain
second tier-independent operators or no chain
First Tier of Management Companies
are branded operators or chains
- they operate hotels for owners using the management company's trade name as the hotel brand
e.g Marriott, Holton, Hyatt, etc.
Second Tier of Management Companies
are independent dent operators or no chain
-they operate hotels for owners and don't use the management company name as part of the hotel name
e.g Aimbridge/Interstate, White Lodging Services, Suburban Inns, AHC+Hospitality etc.
is a percentage of "gross revenue" (sometimes referred to as "total revenue") rewards the management company's revenue-generating capability (but not efficiency)
is intended to incentivize management efficiency because it is a percentage of some level of "operating income" (often referred to as "gross operating profit" or "GOP") that is "gross revenue" minus certain operating expenses
What are the advantages to Hotel Owners?
- targeted expertise can be obtained
- documents managerial effectiveness is available
- payment for services can be tied to performance
- partnership opportunities are enhanced
Assest Management Company
- they represent the owner in the operation of a hotel
- they work to create the highest possible revenue while reducing unnecessary cost, achieve the best profit margin possible
What are the disadvantages to Hotel Owners?
- they usually cannot control the selection of the onsite G.M. & other high-level managers
- talented managers leave frequently
- the interests of hotel owners and the management companies they employ sometimes conflict
- the cost of management company errors are borne by the owner
- transfer of ownership may be complicated
- the high cost of buyout limits the number of potential buyers
A hotel may have both of what?
management company and an assist management company
What is Property improvement Programs (PIPS)?
it's designed to bring franchises into compliance w/ the brand identity standards. updating things such as furniture, fixtures, and equipment can help provide better customer experience & drive revenue
Individualized hotels that give owners and operators the opportunity to affiliate with a major chain distribution while retaining their unique design, name, and orientation
triple branded hotels
they attract an expansive range of guests within the same location. also by sharing the same development amenities, back-of-house operations& sometimes even employees, these provide vast operational & financial benefits for developers
computes/explain hotel math fundamentals (KPIs-key performance indicators)
they are calculated from the raw performance data obtained from hotels:
-average daily rate/ADR
-revenue per available room/RevPAR
the percentage of available rooms that were sold during a specific time period
its calculated by dividing Demand (number of rooms sold) by the Supply (number of rooms available
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