Chapter 1-1. Overview of the Hotel Industry

Summary

This script offers an in-depth introduction to the hospitality industry, encompassing lodging, transportation, food services, and event planning. It highlights the importance of guest experience, safety, cleanliness, and service. The lodging industry's characteristics, including perishability and labor intensity, are discussed. The classification of hotels by size, market segments, location, and ownership is explored, with examples of major hotel companies like Marriott International and Hilton, emphasizing their diverse brand portfolios and global presence.

Takeaways

• 🏨 The hospitality industry is a broad service sector encompassing lodging, transportation, food and beverage, event planning, theme parks, and cruise lines, all aiming to provide enjoyable experiences to customers.
• 🛏️ Hospitality is defined as the relationship between a guest and a host, characterized by the host's goodwill in receiving guests, which can include receptions, entertainment, and generous reception.
• 🏰 The term 'hotel' originates from French words for noblemen's residences or large official buildings and is an establishment offering sleeping and living accommodations to travelers.
• 🔑 Lodging industry characteristics include a focus on safety, cleanliness, and services, aiming to make guests feel at home with a sense of security and care.
• ⏳ The industry is characterized by perishability, meaning if rooms or food aren't sold on a given day, they are lost, necessitating daily availability and readiness.
• 🔄 The industry is labor-intensive, often involving repetitive tasks such as housekeeping and front desk operations, yet it remains dynamic due to the variety of guests encountered.
• 🏢 Hotels can be classified by size, ranging from small (under 115 rooms) to large (over 600 rooms), with mid-size hotels falling in between.
• 🎯 Market segments classify hotels into categories like economy, mid-scale, upper mid-scale, upscale, upper upscale, and luxury, with brands like Ritz Carlton and Four Seasons representing the luxury segment.
• 📍 Hotels can also be classified by target markets, such as business hotels near business districts, resort hotels chosen for vacations, and extended stay hotels designed for longer stays with additional amenities.
• 🌐 Geographic location is another way to classify hotels, with distinctions made between suburban, metropolitan, and other areas, as well as global regions like Americas, Europe, Middle East, Africa, and Asia Pacific.
• 🤝 Hotel ownership and affiliations can be independent, part of a franchise agreement, under a management contract, or part of membership groups, each with its advantages and challenges.

Q & A

What is the hospitality industry?

The hospitality industry is a broad category within the service industry that includes lodging operations such as hotels, transportation services like airlines or trains, food and beverage operations such as restaurants and bars, event planning for corporate events or weddings, theme parks, and cruise lines.

What is the primary goal of the hospitality industry?

The primary goal of the hospitality industry is to provide customers with enjoyable experiences, which can range from a good meal to a relaxing spa visit or a comfortable night's rest away from home.

What does the term 'hospitality' refer to in the context of the industry?

In the context of the industry, hospitality refers to the relationship between a guest and a host, where the host receives the guests with goodwill, including receptions or entertainment for visitors or strangers.

What is the origin of the word 'hotel'?

The word 'hotel' comes from the French word for the noblemen's residences, townhomes, or large official buildings.

What are the key characteristics of the lodging industry?

The key characteristics of the lodging industry include emphasis on safety, cleanliness, and services, providing guests with a sense of being at home while away from home.

What is the term used to describe the nature of service industry products?

The term 'perishability' is used to describe the nature of service industry products, which means if the product, such as a hotel room or a meal, is not sold at that moment, it disappears and cannot be sold later.

How is the hospitality industry characterized in terms of labor?

The hospitality industry is characterized as labor-intensive, which often results in high turnover rates.

What are the four main ways to classify hotels?

Hotels can be classified by size, level of service or market segments, locations, and ownerships and affiliations.

What does STR stand for and how does it classify hotel segments?

STR stands for Travel Research, and it classifies hotel segments into six categories: economy or budget, mid-scale, upper mid-scale, upscale, upper upscale, and luxury.

What are the different types of hotel target markets mentioned in the script?

The different types of hotel target markets mentioned include business hotels, resort hotels, conference hotels, boutique hotels, extended stay hotels, bed and breakfast hotels, and casinos.

What is the largest hotel company in the world according to the script?

According to the script, Marriott International is the largest hotel company in the world.

What are the benefits and pitfalls of being an independent hotel?

The benefits of being an independent hotel include running the hotel with minimum costs without paying franchise fees. The pitfalls include difficulty in promoting the hotel to the market due to lack of a well-known brand name.

What are the types of agreements or affiliations that a hotel can have?

A hotel can have a franchise agreement, a management contract, or be part of a membership group. Each has its own benefits and responsibilities, such as brand recognition, operational support, and fees.

What are some examples of major hotel companies mentioned in the script?

Some examples of major hotel companies mentioned include Marriott International, Hilton, InterContinental Hotels Group (IHG), Accor Hotels, and Wyndham.

Outlines

00:00

🏨 Overview of the Hospitality Industry

The hospitality industry is a diverse sector within the service industry that encompasses lodging, transportation, food and beverage operations, event planning, and theme parks or cruise lines. It aims to provide customers with enjoyable experiences, emphasizing the importance of guest care. The script introduces the concept of hospitality as a relationship between a guest and a host, highlighting the need for goodwill and generous reception. Hotels, as part of this industry, are establishments offering sleeping and living accommodations to travelers, with a focus on safety, cleanliness, and services to make guests feel at home. The lodging industry's characteristics include perishability, where unsold services like rooms or meals are lost, and labor intensity, which contributes to high turnover rates.

05:03

📊 Classification of Hotels Based on Size and Market Segments

Hotels can be categorized by size, ranging from small hotels with under 115 rooms to large hotels with over 600 rooms. Additionally, market segments defined by STR include economy, mid-scale, upper mid-scale, upscale, upper upscale, and luxury. The script lists examples of hotel brands for each segment, such as Ritz Carlton for luxury and Motel 6 for economy. It also discusses hotel rating systems like AAA's diamond ratings and the star system from Forbes. The paragraph further elaborates on different target markets for hotels, such as business, resort, extended stay, bed and breakfast, and casino hotels, each with unique features and services tailored to their clientele.

10:07

🌍 Hotel Classification by Location and Ownership

Geographical location plays a significant role in hotel classification, with distinctions made between American areas, Europe, the Middle East and Africa, and the Asia Pacific region. The script also touches on the classification of hotels by ownership and affiliations, including independent hotels, franchise agreements, management contracts, and membership groups. Independent hotels have the freedom to operate without brand restrictions but face challenges in market promotion. Franchise agreements and management contracts offer brand recognition and operational support at the cost of fees. Membership groups, such as Best Western, provide collective marketing benefits for independent hotels.

15:08

🏢 Major Hotel Companies and Their Brand Portfolios

The script introduces some of the largest hotel companies in the world, such as Marriott International, which has a diverse portfolio of 30 brands and over 7,000 properties. It also mentions other major players like Hilton, Hyatt, IHG, Accor, and Wyndham, each with their own range of brands catering to different market segments from luxury to budget. The companies' brand portfolios are described, showcasing their presence across various service levels, from premium and luxury to mid-scale and budget options. The paragraph highlights the global reach and influence of these companies in the hospitality industry.

20:09

📈 Revenue and Market Presence of Leading Hotel Chains

The final paragraph focuses on the financial success and market dominance of leading hotel chains, particularly Marriott, which is noted for its significant sales revenue. The script emphasizes the importance of understanding the different business models and strategies employed by these companies to maintain their competitive edge in the global hospitality market. It also underscores the growth and expansion of these hotel chains, reflecting the dynamic nature of the industry and the continuous demand for diverse hospitality services.

Keywords

💡Hospitality Industry

The hospitality industry encompasses a broad category of fields within the service industry, including lodging operations like hotels, transportation services such as airlines, food and beverage operations like restaurants, and event planning. It aims to provide customers with enjoyable experiences, which can range from a good meal to a relaxing spa visit. The video emphasizes that the industry's success hinges on making guests feel well taken care of, whether they are seeking a luxurious experience or a simple night's rest.

💡Lodging Industry

The lodging industry is a subset of the hospitality industry, focusing on providing accommodations for travelers. It includes hotels, motels, and other establishments that offer rooms for short-term stays. The video mentions that this industry is characterized by an emphasis on safety, cleanliness, and services, aiming to make guests feel at home even when they are away.

💡Perishability

Perishability in the context of the hospitality industry, particularly the lodging sector, refers to the fact that unsold services, like hotel rooms or restaurant meals, cannot be stored for future sale and are 'lost' if not utilized on the day they are offered. The video explains that this characteristic requires hotels to manage their inventory effectively to maximize occupancy and revenue.

💡Labor Intensive

The term 'labor intensive' describes an industry that requires a significant amount of human labor to operate, as opposed to being highly automated. The video points out that the hospitality industry is labor intensive, which contributes to high turnover rates. This is because the industry relies heavily on staff to provide services and create memorable experiences for guests.

💡Market Segments

Market segments in the hotel industry refer to the classification of hotels based on the level of service and amenities they offer. The video outlines six segments: economy, mid-scale, upper mid-scale, upscale, upper upscale, and luxury. Each segment caters to different customer needs and preferences, with luxury brands like Ritz Carlton and Four Seasons at the high end, and economy brands like Motel 6 and Super 8 at the lower end.

💡Extended Stay Hotels

Extended stay hotels are designed for travelers who need accommodations for five nights or longer. These hotels provide a home-like atmosphere with additional amenities such as kitchens, laundry facilities, and sometimes even grocery delivery services. The video contrasts these with standard hotels, highlighting that extended stay hotels aim to offer a more residential experience for longer-term guests.

💡Bed and Breakfast (B&B)

A bed and breakfast, or B&B, is a type of accommodation facility that typically offers lodging and limited food service, usually just breakfast. The video mentions that B&Bs often have lower rates than full-service hotels because they provide fewer services. They are popular for their intimate, homely atmosphere and personalized service.

💡Casino Hotels

Casino hotels are a specific type of hotel that features gambling facilities as a primary attraction. The video uses Las Vegas and Macau as examples of locations where casino hotels are prominent. These hotels not only provide accommodation but also offer a range of entertainment options, including gaming, which is a significant part of their business model.

💡Hotel Classification by Size

The video discusses how hotels can be classified by size, with small hotels having under 115 rooms, medium-sized hotels ranging from 115 to 600 rooms, and large hotels having over 600 rooms. This classification helps in understanding the scale of operations and the level of services that a hotel can provide.

💡Ownership and Affiliations

Ownership and affiliations in the hotel industry refer to the different business models and relationships that hotels can have. The video explains three main types: independent hotels, franchise agreements, and management contracts. Independent hotels operate without brand affiliations, franchises use a brand's name and may have little operational involvement, and management contracts involve a third party managing the hotel's operations. Each model has its advantages and challenges, such as cost management, brand recognition, and operational control.

💡Hotel Companies

The video introduces several major hotel companies, including Marriott International, Hilton Worldwide, Hyatt, IHG, Accor, and Wyndham. These companies operate multiple hotel brands across various market segments and are known for their global presence and diverse portfolio of properties. They exemplify the scale and diversity within the hospitality industry, offering a range of services from luxury to budget accommodations.

Highlights

The hospitality industry is a broad service sector encompassing lodging, transportation, food and beverage operations, event planning, theme parks, and cruise lines.

Hospitality involves the relationship between a guest and a host, characterized by goodwill and generous reception.

A hotel is an establishment providing sleeping and living accommodations to travelers, emphasizing safety, cleanliness, and service.

The lodging industry is characterized by perishability, requiring daily room availability and maximizing occupancy.

The service industry, including lodging, is labor-intensive, often facing high turnover rates.

Hotels can be classified by size, ranging from small hotels with under 115 rooms to large hotels with over 600 rooms.

Market segments classify hotels into economy, mid-scale, upper mid-scale, upscale, upper upscale, and luxury categories.

Hotel brands like Ritz Carlton, Four Seasons, and St. Regis are recognized as high-rated luxury segments.

Target markets for hotels include business, resort, conference, budget, extended stay, and bed and breakfast.

Geographical locations influence hotel classifications, with distinctions made between urban, suburban, and rural areas.

Ownership and affiliations categorize hotels as independent, franchised, under a management contract, or part of a membership group.

Independent hotels have the freedom to operate without brand restrictions but may struggle with market promotion.

Franchise agreements allow hotels to use a famous brand name but require franchise fees.

Management contracts provide operational support and ensure efficiency but involve contract fees.

Major hotel companies like Marriott International, Hilton, IHG, and Accor have diverse brand portfolios catering to various market segments.

Marriott International is the largest hotel company globally, with 30 brands and over 7,000 properties.

Hotel companies like Wyndham and Choice Hotels focus on mid-scale, budget, and economy brands.

The transcript provides a comprehensive overview of the hotel industry, its classifications, and major players.

Transcripts

[Music]

hello everyone welcome to chapter one

overview of the hotel industry

so what is the hospital industry

hospitality industry is a

broad category of fields within a

service industry

that includes

lodging operations such as hotel

transportation services such as

airlines or trains or food and beverage

operations

such as restaurant and bar

event plannings

planning for

corporate events or weddings

or theme parks such as disney or cruise

lines such as cruise ships

the hospital industry provides customers

with enjoyable experiences whether

that enjoyment comes from eating a good

meal

relaxing in a luxurious spa or getting a

good night's rest away from home

making sure each individual guest

is taken care of is such a paramount

[Music]

advice hotel operations

the first we're going to think about

what

hospitality means

hospitality is the relationship between

a guest and host

wherein the host

receives the guests with some amount of

goodwill

including such as like receptions or

entertainment of cast visitors or even

strangers so

in a dictionary term a hospital is the

uncourtier sincere and

generous reception of guests a hotel is

part of the hospitality

businesses

which

comes from the french word hotel

for the noblemen's residents townhomes

or large official buildings

hotel is an established establishment

that provides away from home sleeping

and living accommodations to

friendships travelers for daily

enumerations or even

grief travelers

family and so on

lodging industry

characteristics includes

the emphasis on safety cleanings and

services

think about

your guests

is staying your hotel away from home but

they want to feel like they're in the

home

so it should provide them with a sense

of safety

cleanness and

service as well

and our field not only the lodging

industry whether it's a service industry

in general

it's impossible to separate

manufacturing your products and selling

your products so we do both things at

the same time we make the food and then

provide that food to the guests at the

same time

the perishability is also

a key terms when it comes to

lodging in the serious characteristics

because if you don't sell to your

products such as your room or the papers

in the restaurant today

or at this moment it just disappears so

the hotels have to make sure that

the rooms are available every day

the guests to

increase or even maximize their

readiness

our industry also has some sort of

repetitiveness characteristics

when it comes to housekeeping

they clean the same room every day

when it comes to front desk their job is

somewhat liquidity

the restaurant is also some other period

whether

serving the food or culling the dishes

but

what makes our industries different is

that your guests are not

seen

so even though your work is about

repetitive

but it makes you feel like you're

in the like a live environment because

you meet

different people every day

it's hard to deny that our industry

is about labor intensive

that's why

the logic industry has

issues with high term level rates

[Music]

now we are going to

classify hotels by four categories

by size of the hotels by the level of

service in other words market segments

by locations and by

ownerships and affiliations

you can classify the hotel based on the

size of its hotels

when it comes to

small size of hotel usually room under

the hotel that has room under 115

is considered

the small size of hotels

the hotel that has over 115

to

600

it's somewhat in the middle of between

like middle size or medium size

or just normal size of breakdowns

the usually the hotels that had

room over 600 rooms

uh it's considered a large size of

hotels but here on the right side you

can see the average number of rooms per

repairs

in the united states

[Music]

you can also classify the hotel by

market segments so this segment which

includes six categories

is

defined by str which is travel research

they

have classified the voters by

six segments including economy or budget

mid scale upper mid scale upscale

upward upscale or

the luxury

so luxury segments

include brands such as woods carton

four seasons or dolph australia

or saint regis

up pop scales like such a westin

renaissance were hired

upscales

mario 3

upper mid scale

holiday inn la moda

miss skills like some of the best in

best westerns or queensland economy or

projects project hotels mostly like a

motel segment

econo large motel 6 or micro pail super

8

so this is the chart indicating uh

highest rated luxury hotel brands in

north america as of may 19th

as you can see the rich carton is

the brand that is higher rated luxury

brand hotel

in america

other companies such as

triple diamonds

or

orbs

they also provide

a hotel rating

systems

based on their definitions so

great they use the diamond to

find hotel segments from basic

luxury the start system from folks also

have five stars

from economy

to village

you also classify the hotel by target

markets

the business hotel which is just mainly

located near the business district of

that regions

focused primarily on business people

and

this obviously is the largest will

hotels reserved hotels are open chosen

as destinations or vacation spots

obviously for your

uh the vacations

also features

recreational facilities or activities

and even

breathtaking sceneries

like i said

the lizard hotel targets leader

travelers

extended stay hotel is designed for

travelers who stay five nights or longer

which provides online atmospheres

differences between normal hotel and

extensive hotel is that in the extended

state hotel

it provides additional

equipment

or facilities

or amenities

such as

kitchens

in the room or

like refrigerators in the rooms

or

laundry rooms in the hotels

[Music]

or extended

provisional

meals

and the amenities

one more thing is that

a bed and breakfast hotel

so simply

the accommodations facilities that

provides bad breakfast

simply we call it bnbs

most of only offer lodging and limited

food service which is breakfast room

rates tend to be lower than the first

service hotel because they are providing

uh limited services

or even you have casinos featuring

gambling facilities las vegas is one of

the

great examples in asia macau is one of

great examples too

you can also classify the hotel by

locations

this is the americans map right you can

see uh the pacific area mountaineer west

north adventure west centre or even new

england south athletes so on

when it comes to the world

you can divide

this world based on four areas which is

american areas

and europe

mid-east and africa

and asia pacific

so based on the locations

the suburban area has most

uh hotels in that area

because that has lots of lizards

or

motors for

the rotary

peoples and so on

and over and areas and small metro also

has

um hotels

as well

you can also classify the hotel

by ownership and affiliations

independent hotel is

the hotel that is independently on

denver

this

type of hotel doesn't allow any other

proprietors

to use its name or brands

overtime italian loving is one of the

examples that you can think about

as independent repairs has lots of

benefits

you know

you can run your hotel with minimum

amount of

costs

you don't have to pay for

franchise fees or amazement fees

however

as independent hotel one of the biggest

pitfalls is that it's really hard to

promote your hotels to

the markets

[Music]

the other one is the franchise agreement

you just

borrow

some famous hotel brands

name to your hotels

this is a formal license of different

source flow

targets on the branding a little or even

no involvement in the operations

obviously it's easy to

promote your hotel because people know

their brand's name

but at the same time you have to pay for

defensive speed

the management contract is a service

contract which means by the contract

which comes with arrangement of all

functions such as

technical operations

personnel

management accounting surgical marketing

even training

as an owner they don't have to worry

about how to operate the day-to-day

businesses

but again

they have to pay for the mainstream

contract fees

the the management contract

like i just said uh they manage

the daily uh operations of a hotel they

also ensure that hotel is managed

effectively and

efficiently days

sometimes they own their own hotels but

they do not always own the physical

accounts the remington cortex company is

one of the um

example of

management company

[Music]

you can also think about different

groups just

work as

based on membership groups this is a

group of independent hotels that have

banded together for their common goals

so tell us within that group before they

are departing guests or those guests

that they cannot accommodate

to other properties

that refer groups

the best western is one of the examples

of liquor

groups

so

here's the chart

when owners

want to

build

their hotels in their land

they

may have to think about whether they are

going to have chain brands such as

marion here in hyatt

or

just operate hotel and just independent

hotel

if they want to do

main independent hotel

they have to decide whether they want to

operate their business by themselves

or

have a contract web management company

to

let them you know

operate their businesses on behalf of

them

or when it comes to chain hotels

they always have to decide whether they

are going to run the businesses by

themselves

or have the management contract

so you can have the management contract

with

your franchisor

or

amazement companies

[Music]

so you can also lastly classify military

by company and friends so i'm going to

introduce

some of major hotel companies

in america as well as in the world

maria international

is

the biggest total company group

in this world

which is an american multinational

diversified military company

founded by john lillard marion and back

in 1927

currently they have

30 brands

with over 7 000 properties

to sort of the world

this is their brands

in their luxury line

which carton is part of the marriott

the luxury collections sandwiches w jw

marriott and edison i'm sorry edition

is their luxury line premium nine

in other words up up scale or upscale

includes

uh sharon's

westin or libations

renaissance

and so on

select someone in the middle of like mid

scale or upscale

courtyard

four points spring and sweets or

fairfield

longer stay let's

as for extend this day

you can see here resident skin or town

place

or elements

pilton

worldwide

is also american multinational

diversified

hotel

uh company founded by conrad here back

in 1919

they have 15 brands with almost 6 000

properties

that's just the sort of the word

[Music]

it's their brand portfolio um in the

luxury line they have world of australia

conrad or and get canopy

first service

which is upscale or

pop-up scales you can see here

or doubletree or courier

they have all suites

of

lines which is somewhat related to

extend this name

embassy suites or homework suites or

homes

for christmas service it's someone

in the middle of like made it scarce or

upscales

hampton or herton gardens

not their friends

[Music]

hayat is also american-based company

founded by jay pritzker back in 1957

they have 13 brands with

over 700 properties in 54 countries

it's their brand food full year

luxury brand they have uh park ions

uh then they're in their premium brands

grand hyatt and regions

and that is also part of luxury brands

and then they also characterize them as

lifestyles

and then when it comes to modern

east centres they can see a high place

or high heights

ihg group uh it's british multinational

diversified um

hospitality company

founded by juan

tripe in 1946 they have 15 grand

as their friends may see a holiday in

everywhere

intercontinental hotel is their luxury

brands

and accor hotel is a french

multinational diversified hospital merch

group

and founded by poe and gerard back in

1977

they have 15 brands 1 almost 5 000

properties

maybe uh you're right i'm familiar with

fairmont

luxury brands

banyan tree is

the most luxurious wizard they can think

about

full moon is also part of their luxury

line novotel is first service line

avs

is their budget hotel

lines

as well on the software tail there's

also the luxury brands too

windham is american multinational a

diversified hotel company

founded by trammell

crowd company back in 1981.

they have 20 brands with

over 9000 properties

they mostly focus on

mid-scale or

budgets or economy brands

gabada

fertilize super 8 daisy micro town

along with windum choice ontario group

also focus on budget hotel brands

like comfort in

quality sleep in econo lodge

so

maria like i said

it's the biggest total company in this

world you can see sales revenue by

the marriott is

phenomenal