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1 PART CHAPTER 1 The Traditional Hotel Industry CHAPTER 2 The Modern Hotel Industry CHAPTER 3 The Structures of the Hotel Industry 1 The Hotel Industry IS B N 1 -2 56 -9 77 03 -9 Check-in Check-Out: Managing Hotel Operations, Second Edition, by Gary K. Vallen and Jerome J. Vallen. Published by Prentice Hall. Copyright © 2013 by Pearson Education, Inc. 2 Over eons of time, wanderers and single travelers found security and accommodations in trees and caves, castles and churches, homes and estates. Greater political and economic freedom eventually increased their numbers. Soon, the courtesy of friendly hosts gave way to commercial enterprise. The hotel industry was born carrying this culture of hospitality. So hospitality and hotels are related concepts, deriving from the same Latin root. However, the word “hotel,” which comes from the French hôtel, meaning large house, didn’t appear until the 18th century. The Traditional Hotel Industry 1Chapter UNDERSTANDING THE HOTEL BUSINESS The Service Culture The hotel industry has flourished through the centuries by adapting to the changing environment that marks human progress. These stages have been labeled: The 18th century was the agricultural age; the 19th, the industrial age; and the 20th century the age of service, including medicine, education, and hotelkeeping. The 21st century opened with that same service culture, but will likely close as the age of technology. Innkeeping has started to adapt its hospitality heritage to the new age. The shift translates into newer kinds of, but less personal, services. A Cyclical Industry Hotelkeeping is a cyclical industry that closely follows economic phases. Wide swings carry the innkeep- ing industry between peaks of exceptional profits and troughs of outright distress. This rollercoaster has been most evident over the past half century. The entire travel industry was brought to its knees by the oil embargo of 1973. Innkeeping then cycled from bankruptcy to recovery. A decade later, in the early 1980s, the industry witnessed a second such distress when the federal government changed the income tax laws on real estate. (Remember, as hotels are pieces of real estate, any change in real estate will directly affect the hotel industry.) Dominant companies bought distressed properties at that time and recovery followed once again. By the late 1990s, hotel profits had reappeared. Just as the recovery was being consolidated came the tragedy of 9/11, the attacks on the World Trade Center (2001). Travel and tourism bottomed out again. Although recovery was faster this time, it was short-lived. First, a stumbling prosperity and then a dramatic downturn in the U.S. economy in 2008 halted travel once again. Business began an upward crawl anew in late 2010. Hoteliers stop building during downturns. Three years is the typical span between planning and open- ing a hotel. It’s even longer if there are special financing, zoning, or .
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APPENDIX A--Background The Hotel Industry In The United States by Joel N. Morse, Ph.D. INTRODUCTION The hotel industry of the United States has experienced slowdowns in the year 2009 because of the recent economic slump. But slowly the industry is now recovering from the losses incurred earlier. The outlook for growth of the hotel industry in the United States is expected to be positive at the end of the year 2010 or by the middle of 2011. The performance of the three key factors that represent the growth of the United States’ hotel sectors are discussed below with respect to the year 2010. Several other topics related to the growth and failures of the hotel industry of the United States are discussed, as well as metrics that are used in this industry. CURRENT SCENARIO Due to the economic situation that began in 2008, certain hotels in some of the most expensive cities of the United States dropped the prices of their hotel rooms to revive occupancy rates. Marriott and Hilton are two such major chains of hotels which reduced room tariffs in order to overcome their losses. PERFORMANCE OF THE HOTEL INDUSTRY DURING JUNE 2010 During June, 2010, the hotel industry in the United States experienced some increase in the performance of several measures of hotel occupancy and profitability. In year-on-year measurements of the hotel industry reported that there was an increase of 1% in the average daily rate (ADR) at the end of the month, leading to US$98.33. The occupancy rate (OR) also increased, to 65%. 1 Occupancy for June, 2010 During June, 2010, some of the highest ranked markets of the United States economy marked an increase in their occupancy rates. The lead was taken by Oahu Island, Hawaii with an increase from 61.3% to 78.8%. It was then followed by Minneapolis-St. Paul, Minnesota- Wisconsin and Denver, Colorado from 55.2% to 71.6% and 61.3% to 76.6% respectively.2 1 STR Reports US Hotel Industry Performance for June 2010. Retrieved August 5, 2010, from Asia Travel Tips: http://www.asiatraveltips.com/news10/227-USHotelIndustry.shtml 2 STR Reports US Hotel Industry Performance for June 2010. Retrieved August 5, 2010, from Asia Travel Tips: http://www.asiatraveltips.com/news10/227-USHotelIndustry.shtml 0 10 20 30 40 50 60 70 80 90 Pre-June Period During June Period But overall, the hotel industry in the United States showed mixed results. San Francisco, California reported the an increase in three key metrics of performance. For example, the occupancy rate increased to 78% from 65.9%. Miami - Hialeah, Florida also showed positive results. Its occupancy rates jumped to 63.3% from 53%, and Nashville, Tennessee increased from 46.2% to 57.3%. However, certain markets of hotel industry in the United States showed a decrease in their occupancy rates. The market with the highest decrease i ...
APPENDIX A--Background The Hotel Industry In The United St.docx
APPENDIX A--Background The Hotel Industry In The United St.docx
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APPENDIX A--Background The Hotel Industry In The United St.docx
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Marriott qtr3 results 2010
1.
October 6, 2010
Source: http://www.marketwatch.com Marriott Corporation 3 rd quarter 2010 Highlights
2.
3.
Luxury Sector (Ritz
Carlton Brand) experienced strong growth in both REVPAR and Occupancy
4.
Average Daily Rates
continue below 2009 levels but look to recover by 2011
5.
6.
Lodging Trends Blog
Highlights from recent postings can be found at the St. Croix Hotel Blog. Click the link below to catch the trends or offer your comments. www.stcroixhotels.blogspot.com
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