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LODGING 3

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LODGING: MEETING GUEST NEEDS

Courtesy Wyndham Hotel Group

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Chapter

T H E P U R P O S E O F T H I S C H A P T E R

I n this chapter, we look at lodging as a set of products and services that have evolved out of guest

needs and preferences. We begin with the evolution of lodging to fit transportation and destination

patterns and individual guest preferences. We then delineate different types of lodging properties,

discussing the distinguishing characteristics of each. Different market segments are explained in relation

to their demographics and subsequently their needs and expectations when traveling. The tremendous

impact of technology is discussed from the perspective of changing guest expectations and from the

standpoint of how technology has changed major facets of hotel operations. The most important aspect

of the hotel industry, service, is explored with a discussion of hotel rating criteria through organizations

such as American Automobile Association (AAA) and directories such as the Forbes Travel Guides.

The crucial role of employees as “internal customers” in providing service is emphasized.

T H I S C H A P T E R S H O U L D H E L P Y O U

1. Describe the evolution of lodging, and relate it to changing patterns of transportation, destinations,

and guest needs.

2. Identify the five criteria for classifying hotels, and name the types of hotels in each classification.

3. Describe the principal customer types served by the hotel industry.

4. Identify the needs and preferences of business travelers, and provide examples of how the lodging

industry accommodates them.

5. Describe how AAA and the Forbes Travel Service evaluate lodging properties, and identify criteria

used in determining these ratings as well as describe how countries around the world

approach the rating of hotels.

Chapter

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274 Chapter 9 Lodging: Meeting Guest Needs

T H E E V O L U T I O N O F L O D G I N G

T oday in the United States, there are 49,505 lodging properties containing over 4.6 million guest rooms. In 2008, this dynamic industry generated $40.6 billion in sales and directly supported over 7.5 million travel and tourism jobs.1 The industry

has surely come a long way since its origins.

T H E H I S T O R Y O F L O D G I N G

The history of lodging, leading to this enormous growth, is rich in variety and encom-

passes thousands of years. The Code of Hammurabi, dating back to about 1800 B.C., made

a reference to “tavern keeping,” another term used for innkeeping in that day. Later,

the Romans built an extensive system of paved roads and included way stations and

inns at regular intervals along the way. During the Middle Ages in Europe, religious pil-

grimages were the primary reason for traveling, with charitable institutions and religious

orders providing lodging facilities. In the fifteenth century, many European cities became

centers of commerce and culture. At the same time, innkeeping for profit began. With

the development of stagecoach routes connecting major cities, the first hotel boom

occurred as inns were located along these routes. The development of inns along

stagecoach routes was followed by the location of lodging establishments convenient

to the major travel modes of railroads, automobiles, and airplanes as the lodging industry

responded to changes in destination patterns.2

In the American colonies of the seventeenth and eighteenth centuries, inns and

taverns were important centers of activity. As meeting places for colonists planning to

separate from England, the early inns were sometimes called cradles of liberty. The inns

of Colonial America, called “ordinaries” because they provided respite for the ordinary

person, typically provided the midday meal or supper as part of the overnight stay. By

the beginning of the nineteenth century, lodging establishments that were larger and

more commercial than inns emerged, along with the term hotel. Early hotels in the

United States included the six-story, 200-room City Hotel in Baltimore, built in 1826, and

the Tremont House in Boston, built in 1829.3

Luxury hotels were still the exception in the United States during the nineteenth

century, however. The grand hotels of the world were, for the most part, still in Europe,

including such landmarks as the Grand Hotel in Rome, the Paris Ritz, and the Savoy of

London. The Waldorf Hotel in New York City was one of the first properties in the States

to provide many of the European amenities. Built in 1893 by William Waldorf Astor, the

Waldorf was followed by larger and more elaborate hotels, such as the Astoria Hotel,

also in New York. A later combination of these two properties created the Waldorf-Astoria

Hotel, which was the world’s largest hotel of its day.4

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The Evolution of Lodging 275

Toward the end of the nineteenth century, North American hotels grew to serve the

rail traveler. Often the hotel was physically connected to the railroad station. A few of

these hotels still survive, and some, such as Toronto’s Royal York, remain thriving centers.

Of the hotels built during the first half of that century, those not physically connected

to the railroad station were usually convenient to it and to the major destinations in

the downtown sections of cities.5

By 1900, there were still fewer than 10,000 hotel properties of varying service

levels throughout the United States. A typical luxury hotel might offer amenities such

as steam heat, electric call bells, baths, and clothes closets on all floors, barbershops,

and liveries. The Hotel Statler chain, which started in Buffalo, New York, served as the

model for construction of hotels for the next 40 years. With the opening of the Buffalo

hotel in 1908, rooms had private baths, full-length mirrors, and telephones. The market-

ing slogan for the Statler Hotel in Buffalo was “A bed and a bath for a dollar and a half.”

Other Statler properties that followed were also known for the introduction of many

firsts.6 In 1927, the Hotel Statler in Boston became the first hotel with radio reception;

individual headsets were provided in each guest room to receive broadcasts from a

central control room.7 The Hotel Statler in Detroit, which opened in 1934, was the first

property to have central air-conditioning for every public room.

By 1910, there were 1 million total hotel guest rooms in the United States, with

the industry employing some 300,000 people. The average property of that day had

between 60 and 75 guest rooms.8 The first two decades of the twentieth century

saw the beginnings of several major hotel companies that are still prominent today.

Conrad Hilton entered the hotel business in 1919 by acquiring the 40-unit Mobley

Hotel in Cisco, Texas. Ernest Henderson, founder of Sheraton Hotels, acquired four

hotels in the late years of the Great Depression, with the chain’s name coming from

one of these four hotels, the Sheraton Boston Hotel.9 Around the same era, J. Willard

Marriott, Sr., entered the hospitality industry with the opening of his first root beer

stand in 1927. This modest beginning led to the Marriott name as a multibillion-dollar

giant in the lodging industry.10

T H E E V O L U T I O N O F T H E M O T E L

The Federal Road Aid Act of 1916 resulted in a new segment of the lodging industry, as

thousands of rooms were added in properties along the new state and federal highways

being constructed. The first roadside motel opened in San Luis Obispo, California, in

1925 with room rates of $2.50 a night. Sometimes referred to as “tourist courts,” the

first motels were small, simple affairs, commonly with under 20 units (or guest rooms).

These properties lacked the complex facilities of a hotel and were generally managed

by resident owners with a few paid employees. The big wave of motel construction

followed World War II, accompanying the explosive growth in auto travel.

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276 Chapter 9 Lodging: Meeting Guest Needs

Motels tended to be built at the edge of town, where land costs were substantially

lower than downtown. The single-story construction that typified motels until the late

1950s (and even the two-story pattern of later motor hotels) was significantly less expen-

sive compared with the downtown high-rise properties that were built on prime real

estate. Capital costs, such as land and building, represent the largest single cost in many

lodging establishments, and so lower land and building costs and the lower capital costs

that resulted gave motels significant advantages. These savings could be, and generally

were, passed on to guests in the form of lower rates.

Probably more important was the fact that motels offered a location convenient

to the highway. Because the typical guest traveled by car, he or she could drive to

any local destination during the day, returning to the accommodations in the evening.

Meanwhile, inexperienced travelers, who had always been put off by the formality of

hotels, with their dressy room clerks, bell attendants who had to be tipped, and ornate

lobbies, preferred the informal, come-as-you-are atmosphere of motels. In the motel,

they might be greeted by the owner working the front desk. Motel operators were proud

of their informality. The personal touch they offered guests and the motel’s convenience

and lower prices were their stock-in-trade.11

T H E M O T O R H O T E L

For a few years, it appeared that hotels (in general, the relatively large downtown proper-

ties) and motels (usually, the small properties located at the edge of town) would battle

for the new mobile tourist market. Unhappily for both the hotel and the mom-and-pop

motel, the situation was not that simple.

In 1952, Kemmons Wilson, a Memphis home-building and real-estate developer,

took his family on a vacation trip. He was depressed by the dearth of accommoda-

tions to meet his family’s and the business traveler’s needs. He returned to Memphis

with a vision of a new kind of motel property that combined the advantage of a hotel’s

broad range of services with a motel’s convenience to the auto traveler. That insight,

which came to be known as the motor hotel, revolutionized the lodging industry.

Motels became larger and began to offer a wide range of services. Dining rooms or

coffee shops, cocktail lounges, and meeting rooms appealed to the business traveler. Swim-

ming pools became essential to the touring family. Room telephones, usually present in

hotels but generally absent in motels, became the rule in motor hotels, thus requiring a

switchboard and someone to operate it. Whereas hotels and motels had offered coin-oper-

ated radios and television, free television and then free color television became the rule.

Although there were experiments with smaller inns having 50 to 75 rooms, most

lodging companies determined that generally a 100-unit facility was the smallest that

made economic sense. That size permitted full utilization of the minimum operating

staff and provided sufficient sales to amortize the investment in such supportive services

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277

I N D U S T R Y P R A C T I C E N O T E 9 . 1

Europe: A Continent of Lodging

Distinctiveness

Although some parts of the world, such as Asia and the Middle East, are experiencing rapid hotel growth,

Europe remains the leader in hotel capacity. According to the World Tourism Organization (WTO), about

38 percent of the six worldwide tourism regions are located in Europe. European hotels are distinctive,

compared to the other tourism regions, in that properties tend to be older and smaller in the number

of rooms and average room size. European hotels also tend to be more fragmented, compared to other

parts of the world, in that only 20 percent to 25 percent of room capacity is branded by an integrated

chain. In North America, approximately 70 percent of hotels are chain-managed or franchised. Other

regions of the world fall somewhere in between North America and Europe.

The degree of chain penetration in Europe varies by country. For example, France has the highest

percentage of hotel rooms affiliated with a chain (not including consortia) at 38 percent. Spain follows

(34 percent) along with Germany (24 percent) and Ireland (21 percent). Significant reduced affiliations

exist in Italy (4.4 percent) and Switzerland (8 percent).

Paris-based Accor has the largest number of properties with 1,922 hotels (201,042 rooms) in Europe

carrying their flag. In Europe, Accor manages the well-known brands of Ibis, Mercure, Novotel, Formula 1,

and Etap. Accor also has the upscale brand of Sofitel and the extended stay brand of Suitehotels.

InterContinental Hotel Group also has a significant presence with 423 properties and 68,841 rooms in

Europe. InterContinental’s brands include Holiday Inn, Express by Holiday Inn, Crowne Plaza, Inter

Continental, and Staybridge Suites. Societe du Louvre is a publicly held company controlled by the Tat-

tinger family (known for being Champagne producers). Their brands include the upscale Groupe Concorde

hotels and budget Groupe Envergure. Hilton Group, a British-based chain with the rights to use the Hilton

name outside the United States, also has a presence in Europe with 118 hotels containing 28,501 rooms.

The best affiliation solution for the average European hotel tends to be the voluntary chain or consor-

tium option. These synonymous terms refer to a loosely structured hotel grouping that requires less of the

individual hotelier in terms of costs and prescribed standards. The affiliation with the voluntary chains is

typically easier to cancel (usually within two years or less) whereas cancellations with the more structured

hotels can stretch over several decades. Although Switzerland, for example, has only 8 percent of its hotels

affiliated with the “hard brand chains,” an estimated 27 percent are affiliated with a consortium.

The typical voluntary European chain hotel is not as attractive as properties in other parts of the world.

The smaller size and the location of many European hotels are not good fits with the larger worldwide chain

model. Urban locations or close access to major transportation arteries are preferred by the large chains.

The major chains have recently lost capacity in Europe. One reason is linked to the tightening of

standards by the consortia. Best Western, for example, added 14 new operating standards. Best Western

conducts yearly inspections of its properties, as does Logis de France (with almost 4,000 hotels), the

voluntary chain of Relais & Chateaux.

Source: M. Marvel, “Hotel Chain Penetration in Europe—Understanding the European Hotel Market,” for EHLITE.com, January 8, 2004,

ahlaradio.hsyndicate.com/news/4018166.html.

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278 Chapter 9 Lodging: Meeting Guest Needs

as pools and restaurants. However, with the advent of the limited-service hotel, which

does not include a restaurant, smaller properties in small cities are once again feasible.12

The basic distinction between hotels and motels has become more complex as

different types of lodging properties have emerged since the advent of the motor hotel

of the 1950s. Today’s lodging properties fall into one of several categories, with some

blurring of distinctions between lodging types. Many major hotel corporations, such as

Marriott, have properties in each lodging category, addressing the varied needs of dif-

ferent market segments of travelers.

Many lodging properties are part of larger chain operations, typically with recogniz-

able brand names, and are corporately owned or franchised. Other properties, smaller in

number, are known as independents; here the owner may be one or several individuals

or a company but has no ties to a larger corporation or major brand name. Industry

Practice Note 9.1 looks at the state of hotel chain affiliations in Europe. (This topic is

also explored further in Chapter 12 as it relates to U.S. properties.)

C L A S S I F I C AT I O N S O F H O T E L P R O P E R T I E S

L odging properties can be categorized according to varied criteria. Classification criteria can include price, function, location, particular market segment, and dis- tinctiveness of style or offerings. It should be emphasized that many types of hotels

can fall into more than one category.

H O T E L S C L A S S I F I E D B Y P R I C E

Categorized by price, lodging properties can range from limited-service hotels to

full-service properties and up to luxury hotels.

L I M I T E D - S E R V I C E H O T E L S . Limited-service hotels typically offer guest rooms

only. There is little or no public space, no meeting or function space, and usually no or

very limited food and beverage facilities. Room rates are correspondingly lowest for

this type of lodging property. Terms previously used for this classification of properties

included “budget” or “economy” hotels. The average daily rate per occupied room for

limited-service hotels in 2008 was $83.18. The average size of this type of property in

2008 was 122 rooms. Transient travelers, including business and tourists, make up 82.2

percent of the market mix for limited-service hotels followed by conference groups at

6.9 percent. Contract and other travelers account for 4.6 percent.13

SELECT-SERVICE HOTELS. This relatively new segment has evolved in much the same

way as fast casual restaurants have emerged in the food service sector; these hotels

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279

are filling a niche created by guests who want value in their lodging experience

but also require some basic services. Not surprisingly, then, select-service hotels

represent the fastest-growing category of hotels. The biggest reason for this segment’s

success is that these properties appeal to both consumers looking for a nice room

at a value and business travelers who have to manage their expenses closely—and

spend less than they would at a full-service hotel. Ranging from 100 to 200 guest

rooms on average, these hotels offer limited food service operations and scaled-down

meeting space but typically include lounge areas for working and socializing, hot

breakfast service, and free high-speed Internet access.

FULL-SERVICE HOTELS. Full-service hotels offer a wide range of facilities and ameni-

ties. Usually there will be, in comparison to budget/economy properties, more public

space and meeting/function space, with at least one food and beverage facility. Room

rates tend to be equal to or slightly above market-area average. In 2008, the average rate

for full-service hotels was $155.82. These properties had, on average, 272 rooms and

catered primarily to business travelers and leisure travelers, which represent 57.3 per-

cent, with groups, contract sales, and other taking the remaining full-service rooms.14

LUXURY HOTELS. At the top of the price category are the luxury hotels, which usually

have from 150 to 500 guest rooms. Featuring upscale decor and furnishings that may

be unique to the particular hotel, these properties offer a full array of services and

amenities. Such hotels typically have a concierge service and several food and bever-

age operations, including a gourmet or fine-dining restaurant, banquet facilities, and

full room service (available 24 hours per day or close to this). Recreational facilities

or access for guests to nearby facilities is also usually available. There is a high ratio

of employees to guest rooms, and room rates are considerably above the market-area

Hotels come in many different sizes and offer room rates for all types of customers. (Courtesy of Las Vegas News Bureau.)

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Image Intentionally Removed

280

average. In the buying and selling of luxury properties in the United States, selling

prices have reached $1 million per room for some hotels. In Milan, Italy, $2 million was

paid per room for a luxury property in late 2006. One of the recent trends contributing to

the climbing prices of these properties has been high-end corporations, such as Italian

jeweler Bulgari and fashion designers Versace and Giorgio Armani, entering the luxury

hotel market.15 The average daily rate for luxury chain hotels in the United States for 2008

was $224.08 with an average occupancy rate of 68.1 percent compared to the overall

hotel market with an average occupancy of 70 percent. These statistics reflect recent

recessionary conditions. According to Smith Travel Research, during 2007 and 2008,

occupancy at many luxury hotels was around 50 percent. Correspondingly, many luxury

hotels were forced to cut rates dramatically just to achieve these low occupancy rates. In

fact, some luxury hotels even saw reductions in average room rates of up to 17 percent.16

H O T E L S C L A S S I F I E D B Y F U N C T I O N

Hotels categorized by function include convention hotels and commercial hotels.

C O N V E N T I O N H O T E L S . Convention hotels are large, with 500 or more guest rooms.

The average size of convention hotels in 2005 was 780 rooms. These properties offer

extensive meeting and function space, typically including large ballrooms and even

exhibition areas. Food and beverage operations tend to be extensive, with several restau-

rants and lounges, banquet facilities, and room service. Convention hotels are often in

close proximity to convention centers and other convention hotels, providing facilities

for citywide conventions and trade shows.17

Luxury hotels cater to a guest’s every need. (Courtesy of Rosewood Hotels & Resorts.)

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Classifications of Hotel Properties 281

C O M M E R C I A L H OTE L S. Commercial hotels, in comparison to convention hotels, are

smaller, with 100 to 500 guest rooms. There is less public space, smaller meeting and

function space, fewer food and beverage outlets, and limited recreational amenities.

Many of these hotels tend to be located in downtown areas. Downtown properties

(also mentioned in the next section) have many advantages. They are near the large

office complexes and retail stores; by day, they are near business destinations; by night,

they are close to many of a large city’s entertainment centers. Many well-located older

downtown properties have been remodeled to include necessary facilities. Although

on-premise parking has not always been feasible, reasonably convenient off-premise

parking with valet service to pick up and deliver the car is common. Thus, nearly all

first-class downtown properties are reasonably “auto friendly.” One final note: Down-

town hotels almost always command higher rates than suburban hotels. The higher

rate is needed to offset the higher land cost and to cover the cost of whatever public

facilities they might have.18

Figure 9.1 illustrates some different operating characteristics of hotels in different

property categories.

H O T E L S C L A S S I F I E D B Y L O C AT I O N

Location can also be a criterion for categorizing lodging properties. Types of hotels

under this categorization include downtown hotels (discussed above), suburban hotels,

highway/interstate hotels, and airport hotels. Suburban hotels tend to be smaller (200 to

350 guest rooms) and involve low- to midrise structures. Highway/interstate hotels are

even smaller, with 100 to 250 rooms, and are low-rise properties. Suburban hotels most

Figure 9.1

Average Occupancy and Average Room Rate for U.S. Hotels in 2008.

T Y P E O F L O D G I N G P R O P E R T Y

O C C U P A N C Y P E R C E N T A G E

A V E R A G E D A I L Y R O O M R A T E

Full-Service Hotels 69.8% $155.82

Limited-Service Hotels 64.9% $83.18

Resorts 68.1% $224.08

Suite Hotels 73.1% $136.29

Convention Hotels 73.3% $186.43

All Hotels 70.0% $155.54

Source: Data from Hospitality Research Group, PKF Consulting, Trends 2009.

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282 Chapter 9 Lodging: Meeting Guest Needs

likely have interior corridors and meeting and banquet

facilities whereas highway/interstate properties most

likely have exterior corridors leading to guest rooms,

minimal banquet and meeting space, and some food

and beverage facilities.

In the 1950s and 1960s, as air travel became more

and more common, a new kind of property appeared,

designed especially to accommodate air travelers.

Airport hotels vary depending on location and size

of the airport, with such properties offering a mix of

facilities and amenities. Typically, airport hotels range

from 250 to 550 rooms.19 An important extra service

provided by almost all airport hotels is the courtesy

van, which offers guests transportation to and from

the airport.

H O T E L S C L A S S I F I E D B Y M A R K E T

S E G M E N T

Particular markets served include executive conference

centers, resorts, and health spas.

E X E C U T I V E C O N F E R E N C E C E N T E R S . Executive conference centers are often in

secluded or suburban settings and have fewer than 300 guest rooms. These facilities,

which offer well-designed learning environments, provide a variety of small meeting

rooms and classrooms featuring full audiovisual and technological support. Meals and

use of recreational facilities are often included in the quoted daily room rate. An exam-

ple of an executive conference center is the Georgia Tech Hotel & Conference Center

in Atlanta, Georgia (www.gatechhotel.com).

R E S O R T S . Resorts are typically located in picturesque settings and have 200 to 500

guest rooms. An example of a well-known resort in the United States is The Breakers,

Palm Beach, Florida (www.thebreakers.com). Resorts provide a comprehensive array

of recreational amenities, depending on the geographic location. A variety of food and

beverage outlets is available, ranging from informal to fine-dining restaurants. With many

resorts located in remote locations, often it is not feasible for guests to have to leave

the property for dining options. Resorts can be further characterized and defined in

more explicit terms. Some resorts are destination resorts; these tend to be in dramatic,

desirable locations, such as Hawaii, Mexico, and the Caribbean. Hotel guests tend to

The San Francisco Marriott is a prime example of a downtown high-rise hotel. (Courtesy of Marriott International.)

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283

Modern guest rooms can accommodate a variety of needs and types of guests. (Country Inns and Suites; Courtesy of Carlson Hotels Worldwide.)

Resort hotels provide ample opportunity for guests to relax in pic- turesque surroundings. (Courtesy of Rosewood Hotels & Resorts.)

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284 Chapter 9 Lodging: Meeting Guest Needs

have to travel at least several 100 miles to reach such a resort, and travel is typically by

air. Visits to destination resorts tend to be infrequent, usually once a year or less. Non-

destination resorts or regional resorts involve a two- to three-hour trip for visitors and

are usually reached by car. The visits to such locations are more frequent but usually

for shorter periods of time as compared to the destination resorts. It is very feasible for

a resort to cater to both destination and nondestination visitors.20 Resorts can also be

classified on a seasonal basis, indicating the time of year when the resort is at a peak

demand. Seasonal classifications include summer, cold winter (i.e., ski resorts), warm

winter (such as south Florida or southern Arizona), and year-round. At one time, the

majority of resorts operated seasonally. Today, most resorts operate year-round, with group

business and lower-rate packages bringing in guests during the less desirable times of

the year. Two cities that epitomize the year-round resort market are Las Vegas, Nevada,

and Orlando, Florida. Orlando, with just over 111,000 hotel rooms,21 and Las Vegas, with

over 140,529 rooms, 22 lead the nation in hotel room inventory, surpassing even Los

Angeles, Chicago, and New York City.

An interesting segment of resorts focuses on ecotourism. These typically remote

lodging establishments usually are located in areas of significant natural beauty, and

the design elements of the property blend with the surroundings and protect the eco-

system. Often incorporated with adventure travel, these lodging properties can be

found from the Great Barrier Reef of Australia to the rugged highlands of Tasmania

and the jungles of Costa Rica. As with P&O Australian Resorts, many of these hotels

stress comfort, with luxurious rooms and gourmet food and beverage selections.23

C A S I N O H O T E L S . Casino hotels and resorts24 differ significantly in their operation

compared to most hotels. In casino hotels and resorts, gaming operations are the major

revenue centers. Most of these are in Las Vegas; a number of casino operations that

Casino hotels, such as the Excalibur in Las Vegas, use architecture to convey the desired image of the property. (Courtesy of MGM MIRAGE.)

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Classifications of Hotel Properties 285

include hotels are also located on Native American reservations throughout the United

States. Casino operations are discussed more fully in Chapter 14. Numerous examples

of casino hotels are discussed throughout the text. One well-known casino hotel in the

United States is the Excalibur in Las Vegas.

H E A LT H S PA S . Health spas, often located in resort-type settings or as a part of a larger

resort, provide additional amenities focusing on needs ranging from losing weight, to

reducing stress, to pampering oneself. Resort/hotel spas are the second largest cat-

egory next to day spas. Resort/hotel spas were also the fastest-growing segment in the

first part of the new century, growing 290 percent between 1999 and 2004. Spas are

increasingly being considered as a necessity to remain competitive in attracting both

leisure and business travelers. In a sample of 88 U.S. properties, spa revenue for hotels

averaged $2,076 per available room, or 2.3 percent of total revenue. At resort proper-

ties, spa revenue was $3,117 per available room, or 3.4 percent of total revenue. In

comparison, golf revenue declined by 2.7 percent per occupied room.25 Of course, the

economic conditions have impacted these numbers, and while revenue per available

room increased, average occupancy decreased from 2007 through 2009. Spas have pro-

fessional staffs that often include dietitians, therapists, masseurs, exercise physiologists,

and, in some cases, physicians. There are a number of categories of spas, including spas

with natural mineral hot springs, beauty spas, fitness spas, international-style spas that

emphasize health therapies, behavior modification spas, holistic spas, resort spas, and

spa facilities within hotels.26 Hotels providing spa and fitness facilities are now dedicat-

ing more space to comprehensive health facilities in order to remain competitive. With

an aging population of 80 million baby boomers, more health-oriented services are

expected as this segment focuses on improving the quality of life. Profits will also play

a very big part in fitness centers and spas, as resorts and hotels realize the significant

revenue potential. Industry Practice Note 9.2 describes several trends in spa services.

A prominent health spa in the United States is The Boulders Resort and Golden Door

Spa, Phoenix, Arizona.

VACATION OWNERSHIP. Vacation ownership, also referred to as timeshares and vaca-

tion intervals, involves a “type of shared ownership in which the buyer purchases the

right to use a residential dwelling unit for a portion of the year.”27 Major lodging com-

panies, such as Marriott, Ritz-Carlton, Four Seasons, Hyatt, Accor, Carlson, Starwood, and

Disney, are big holders of the vacation ownership market. In 2007, 4.4 million households

owned one or more U.S. timeshare properties. There are 154,439 timeshare units at over

1,600 resorts throughout the United States. Each condominium or unit of a vacation own-

ership resort is divided into intervals, typically by the week, that are sold separately.

The condominiums are priced according to a variety of factors, including unit

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286

I N D U S T R Y P R A C T I C E N O T E 9 . 2

Trends in Spa Operations

According to the International Spa Association, spas are the fourth-largest leisure industry in the United

States. Not only are spas growing in number (13,757 in the United States) and locations (9 percent are

in hotels or resorts), but they are growing in the types of services provided. Some of the latest trends

include:

• Green. The predominant trend for spas is to embrace environmentally sustainable practices. A recent

International Spa Association (ISPA) survey showed that 76 percent of U.S. spas use such practices,

including building green facilities, maintaining organic gardens, and utilizing locally grown products.

• Authenticity. Destination spas and resort hotel spas are differentiating themselves with the types of

products and services of their region. For example, Cliff House Resort & Spa in Ogunquit, Maine, offers

body wraps made from Maine blueberries and wild roses or juniper berries. Le Spa at the Radisson

Plaza Resort in Papeeta, Tahiti, offers treatments featuring the traditional monoi oil used by locals.

• Wellness. Canyon Ranch Resorts, in Lenox, Massachusetts, and Tucson, Arizona, are collaborating with

the Cleveland Clinic in Ohio to offer programs in weight control, stress management, and cardiac care.

Such educational programs are in greater demand than ever. The ISPA survey found that at least 51

percent of U.S. spas offer some form of educational programs.

• Medical tourism. This controversial field is booming and is increasingly using new technology, such as

DNA analysis, antiaging treatments, BOTOX, and laser surgery. Medical tourism agencies now exist to

help arrange the traveler-patient’s stay.

• Sleep therapy. Spas increasingly will be offering sleep techniques and treatments to a society that

generally is sleep-deprived.

• Men. The ISPA states that 31 percent of spa-goers are men. The Lodge at Woodloch, in Hawley, Penn-

sylvania, was designed with a male focus, including lodge-style architecture, a golf course, a full bar

with tapas, and a dinner menu that includes red meat.

• Labor concerns. Because of the high cost of labor, particularly in the United States, spas are increas-

ingly using “destaffed” spa treatments including heat and water experiences. Pricing will also become

more attuned to demand with treatments during busy time frames (e.g., weekends) costing more than

lower-demand times (weekdays).

• Fusion. Fusion treatments and techniques are on the increase. Examples include watsu (water and

shiatsu), yogalates (yoga and Pilates), neurobics (mind aerobics), and kinesis (mind-exercise).

• Services for children. The spa industry is responding to the growth in family travel with more spas add-

ing children’s activities. Children’s activities are being offered in many locations while parents indulge

in spa treatments. Spa services especially designed for children, such as chocolate manicures, are

also creative additions.

Source: International Spa Association, www.experienceispa.com.

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Classifications of Hotel Properties 287

size, resort amenities, location, and season. Purchasers of vacation ownership proper-

ties typically can travel to other destinations through vacation exchange programs

provided through the timeshare resort developers. The predominant type of timeshare

property, according to the American Resort Development Association, is a seaside/

ocean resort (31.9 percent) followed by regional resorts (13.7 percent) and golf resorts

(10.2 percent). Florida has three times as many timeshare resorts as any other state

with the number totaling close to 400.28 Marriott Vacation Club Sunset Pointe, Hilton

Head, South Carolina, is a good example of a Vacation Ownership facility.

O T H E R H O T E L C L A S S I F I C AT I O N S

Types of hotels classified by distinctiveness of style or offerings include all-suite proper-

ties, extended-stay properties, historic conversions, and bed-and-breakfast inns. Boutique

hotels can also be classified under this category.

A L L- S U I T E H O T E L S . All-suite hotels became known as a separate category in the

1970s. Guest rooms are larger than the normal hotel room, usually containing more

than 500 square feet. A living area or parlor is typically separate from the bedroom,

with some properties offering kitchen areas. All-suite hotels can be found in urban,

suburban, and even residential locations. The amenities and services (availability of

on-site restaurant operations, meeting space, and recreational facilities) can vary

widely in this type of hotel. Figure 9.2 shows a typical guest unit at an Embassy Suites.

1 2 '1

0 "

13'0" 15'0'' 8'4''

Figure 9.2

A typical guest unit at Embassy Suites. (Source: Embassy Suites.)

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288 Chapter 9 Lodging: Meeting Guest Needs

EXTENDED-STAY HOTELS. Extended-stay hotels provide many of the same features and

amenities as all-suite properties, such as a stove and/or microwave in the guest rooms,

refrigerators, kitchenware or dishes, grocery shopping service, business services, and

limited housekeeping service. As compared to all-suite hotels, however, the extended-stay

room rates are often significantly less, with daily, weekly, and monthly rates quoted.

Restaurants may be located nearby; typically there are no on-site food and beverage

outlets in extended-stay hotels.29

H I S T O R I C C O N V E R S I O N S . Some hotel properties have historic significance and have

been renovated to their original splendor. These classic hotels have great appeal for

those wishing to experience some of the grandeur and elegance of earlier days with

the comforts of modern-day features.

B E D - A N D - B R E A K FA S T I N N S . A bed-and-breakfast inn (B&B) typically has five to

ten rooms with the average size being eight rooms. Breakfast is served and included

in the room rate for these properties. Most B&Bs are outside of urban areas with 29

percent being in rural locations and 52 percent being in suburbs/towns. The average

length of ownership of a B&B is 13 years, and most owners (88 percent) live on the

premises. The most recent data show that the number of B&Bs has increased from

fewer than 1,000 in 1980 to about 20,000 properties today, encompassing 148,000

rooms. The average occupancy for a B&B is 38 percent, and the average daily rate

is $163.30

BOUTIQUE HOTELS. Boutique hotels span all price segments and are noticeably dif-

ferent in look and feel from traditional lodging properties. Interior-design styles in

boutique hotels range from postmodern to homey. Soft attributes, such as image and

atmosphere, typically distinguish these properties. Travelers’ desires to be perceived

as trendy, affluent, and artistic tie into boutique themes. Starwood Hotels & Resorts

Worldwide has a version of the boutique concept with its W properties.31

Figure 9.3 displays types of hotels by location, rate, and size, along with

the approximate percentage of U.S. properties that fall into these categories. Of the

total number of lodging properties in the United States, it is interesting to note that

56.2 percent have fewer than 75 rooms and 31.9 percent have 75 to 149 rooms.

Although mega-hotels (which number about 1 percent of all hotels in the United

States) often garner much attention, the impact of small businesses on lodging is

extremely significant. 32

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289

T Y P E S O F T R A V E L E R S

A ccording to the American Hotel and Lodging Association, leisure travelers make up the highest percentage of guests (57 percent). The number of leisure travelers has been steadily growing since 2000. The typical leisure room night is generated by

two adults (51 percent), ages 35 to 54 (40 percent) who earn an average yearly house-

hold income of $91,115. The typical leisure traveler arrived by auto (78 percent), made

reservations (88 percent), and paid an average of $112 per room night. Most leisure

The Regent Wall Street is a good example of a beautifully restored boutique hotel. (Courtesy of Carlson Hotels Worldwide.)

CH009.indd 289 24/12/10 12:55 PM

290 Chapter 9 Lodging: Meeting Guest Needs

travelers spend one night (41 percent) followed by 31 percent spending two nights and

28 percent spending three or more nights.33

Business travelers accounted for the remainder (43 percent) of hotel guests in

2008. The typical business traveler is male (67 percent), in the age range of 35 to 54

(50 percent), and is. employed in a professional or managerial position (43 percent)

earning an average yearly household income of $105,532. These guests tend to travel

alone (58 percent), make reservations (92 percent), and pay an average of $125 per

room night. Thirty-five percent of business travelers spend one night, with 26 percent

spending two nights, and 39 percent spending three or more nights.34

Figure 9.3

Property/Room Breakdown, 2009.

B Y L O C A T I O N P R O P E R T Y * R O O M S +

Urban 4,804 741,942

Suburban 17,312 1,726,349

Airport 2,189 302,740

Interstate 7,303 493,831

Resort 3,790 595,263

Small Metro/Town 15,402 901,970

B Y R A T E

Under $30 832 56,008

$30–$44.99 7,032 430,790

$45–$59.99 15,276 952,019

$60–$85 13,965 1,195,277

Over $85 13,695 2,128,051

B Y S I Z E

Under 75 rooms 28,224 1,213,907

75–149 rooms 16,545 1,742,398

150–299 rooms 4,385 878,066

300–500 rooms 1,119 417,510

Over 500 rooms 527 510,214

Source: AH&LA, 2010 Lodging Industry Profile. www.ahla.com/content.aspx?id�30505.

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Types of Travelers 291

B U S I N E S S T R A V E L E R S

Business travelers can be further characterized according to more specific profiles. The

market segments of corporate travel and association travel offer a number of distinc-

tions. The corporate market segment consists of for-profit companies and therefore

may have more money to spend compared to nonprofit or other business segments.

The corporate market segment tends to pay higher rates with the expectation of quality

service and facilities.35

Association business may be more cost-conscious than the corporate segment. The

association market segment consists of individuals or companies that have banded

together in sharing common purposes or goals. Members in the association segment

often pay for services themselves, which can intensify the cost-consciousness of these

travelers. This segment can have very large numbers of attendees and may require large

convention and exhibition facilities. Associations may be on the local, state, regional,

national, and international levels.36

O T H E R S E G M E N T S

Another market segment for most lodging properties consists of SMERF business, so

called because it originates from five primary sources: social, military, educational, reli-

gious, and fraternal. Some of this business is leisure based—the social category includes

weddings, proms, and fundraisers, for example, while the fraternal category includes fra-

ternity- and sorority-related events. Other subsegments are more business based, such

as military, educational, and perhaps religious. A characteristic common to the five com-

ponents is that SMERF customers tend to look for lower rates compared to corporate

and association segments.37

Other market segments for lodging properties involving business and leisure travel

include the tour/travel, cultural, sports, and governmental subsegments. Figure 9.4

shows the breakdown among business travelers based on number of trips taken per year.

19% Frequent travelers (10+ trips per year)

61% Infrequent travelers (1–4 business trips per year)

Average U.S. business traveler (7 business trips per year)*

*Represents the number of trips per year that the “average” business traveler takes.

Source: AH&LA’s 2009 Lodging Industry Profile.

Figure 9.4

Comparison of business travelers.

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292 Chapter 9 Lodging: Meeting Guest Needs

I N T E R N AT I O N A L T R A V E L E R S

As the global economy expands, an increasing number of people travel internation-

ally. In 2008, a record 58 million people traveled from abroad to the United States—a

4 percent increase in travel over 2007. The United States receives a larger share (11.7

percent) of world international tourism receipts than any other country. The United

States earned $110 billion in tourism receipts in 2008, leading the world’s other top

tourism earners—Spain, France, Italy, Australia, and China.38

Not surprisingly, North American hotel companies have been eager to pursue the

international travel market. American brands are expanding rapidly abroad. Much over-

seas travel takes place within the traveler’s own region (i.e., most Asians travel within

Asia, South Americans within South America, etc.). Overseas travelers, however, are

more likely to visit the United States than other destinations when they travel outside

their own area. To take part in the growth of international travel, companies have to

have properties in those markets. Moreover, the best way to publicize a chain at the

points of origin of international travel is to have a property in the country. This makes

local people familiar with the brand.

Asia has been of particular interest to major hotel companies as they plan inter-

national growth. At the end of the first quarter of 2009, there were 1,826 projects in

the Asian pipeline of hotel development (including those under construction, starting

construction within the next 12 months, or in the early planning stages). China has the

largest development pipeline in the region and is second globally only to the United

States. China has 964 projects and 260,560 guest rooms spread throughout the pipeline.

The room count is a staggering 61.5 percent of the total rooms in the entire Asian pipe-

line. Many major cities in China are “underroomed” with the country having grown to

the fourth largest tourist destination by the end of 2008. The marked interest in China is

linked to hotels projecting increased tourism in this part of the world, the entry of China

into the World Trade Organization, and the current construction of many new airports.39

ANTI C I PATI N G G U E ST N E E D S I N PR OVI D I N G H O S PITALITY S E RVI C E

R egardless of the category of lodging or the market segment, hotels are a service industry with the goal of meeting and exceeding guests’ expectations. As consumers are consistently demanding more from their lodging experience, the challenge to hotel

operators is to excel in consistently high-quality service that builds customer loyalty.

This commitment to excellence may also involve product differentiation strategies

involving imaginative amenities and experiences. For example, Kerzner International’s

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293

Atlantis Paradise Island resort in the Bahamas has as a slogan “Blow away the customer,”

as in exceed the customer’s wildest expectations. Atlantis boasts the world’s largest

open-air aquarium (11 million gallons) and an encased water slide that takes riders

safely through a shark-infested lagoon.40 Industry Practice Note 9.3 illustrates the variety

of lodging possibilities available for unique and adventurous travelers.

Meeting the needs and expectations of business travelers has resulted in major

changes in guest room features and amenities, including in-room technology. Hotels

have been challenged to keep up with the expectations and needs from this traveling

segment. Whereas a few years ago, such travelers wanted to be “wired” during trips,

now travelers expect wireless capabilities not only in the guest rooms but throughout

the hotel, including meeting space. Major brands and independents have made great

strides in wireless fidelity (WiFi) capabilities. The challenge to hotel companies is how

to “future proof” for rapid technological changes. Hotels are finding that they need more

robust systems, sound cable infrastructures, and bandwidth-shaping alternatives to meet

these technological demands.41

I N D U S T R Y P R A C T I C E N O T E 9 . 3

Creativity Is Evident in Hotel Properties

Responding to the growing market of savvy travelers who look for unique, and at times even bizarre,

lodging choices, numerous hotels add an experiential factor beyond a comfortable bed and abundant

in-room amenities.

One such lodging property is the Jules’ Undersea Lodge in Key Largo, Florida. Located underwater,

guests must first suit up in dive gear to get to this establishment. In Preston, Minnesota, the Jail House

Inn Bed and Breakfast is a restored county jail built in 1869. For those guests preferring the authentic

experience, there is a “cellblock” where they can sleep behind bars. The Library Hotel in Manhattan

provides a different theme in each guest room. In addition, the Dewey Decimal System is followed for

the numbering of guest rooms.

IStayGreen.org helps pair travelers with environmentally friendly hotels in resorts focusing on unique

destinations around the world. The online service provides an inventory of castles, cottages, country

estates, B&Bs, house hotels, and even boats. The Melville Castle Hotel, for example, is one of the avail-

able options for travelers. Located in Edinburgh, Scotland, the Melville Castle, originally constructed in

1786, has historical associations with Mary Queen of Scots, among other famous people. Surrounded by

50 acres of woodland, the hotel has 33 guest rooms including several gallery bedrooms.

Internet Sites

Jules’ Undersea Lodge: www.jul.com

Jailhouse Inn Bed and Breakfast: www.jailhouseinn.com

Library Hotel: www.libraryhotel.com

I Stay Green: www.istaygreen.org

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294 Chapter 9 Lodging: Meeting Guest Needs

The W Suites, part of Starwood Hotels, were conceived as properties for the “ultra

connected business traveler.” These hotels allow guests to remain in “virtual connect

mode” from any location on the property. “Guests can print directly from their laptops

to a secure and confidential laser printer,” with the use of this printer possible whether

the guests are working in their suites or outside by the pool. Another feature of W Suites

is “broadband Internet access through a secure high-speed wireless Internet network.”

This technology allows guests to access e-mail, print documents, and surf the Net from

anywhere on the property.42 At the Ritz-Carlton Millennia Singapore, guests have access

to a 24-hour “technology butler” who is on call to help with computer technology

problems. With corporate guests as a focus, this hotel provides a full-service business

center with secretaries, fax machines in suites, and private meeting rooms for rent.43

Industry Practice Note 9.4 illustrates what the hotel of the future may offer in terms of

technology amenities.

Lodging properties have also found ways to cater to other market subsegments,

such as senior travelers, females, and families. It is estimated that seniors comprise

47 percent of the leisure travel market, or 144 million room nights per year. The Travel

Industry Association of America states that retired individuals with an average age of

72 take about 32 million trips annually. As noted earlier, the U.S. population of those 65

and older is expected to double in the next 25 years when 72 million people will be

included in that age group. Hotels are already realizing the positive impact of the senior

traveler and the growth potential among this group. To capture this market segment,

hotel companies are trying to understand the needs of the heterogeneous population

that includes individuals in their 50s, 60s, 70s, 80s, and older. Marketing experts are

sensitive to how to refer to this diverse group, spanning four or more decades, realizing

that the younger baby boomers resist terms such as mature, senior, or elderly. Industry

experts do agree that there are interior design elements to better serve this market

segment including better lighting, easy-to-read instructions (clearly printed materials in

larger fonts), and nonskid flooring materials as well as employee training to heighten

awareness of the older travelers’ needs.44

Women make 75 percent of all travel decisions. Female travelers account for

almost 33 percent of all business travelers in the United States, but the expecta-

tion is that they will outnumber male business travelers within the next ten years.

In a survey of 13,000 female business travelers, the most important factors were

close proximity to their clients (23 percent), followed by security of the lodging

establishment (20 percent).45 Hotels are responding to this increase in female busi-

ness travelers with more emphasis on personal service, security including secure

electronic door locks and security cameras in common areas, express check-in and

checkout, a selection of good restaurants on the property, and free airport shuttle

service. Some chains offer special services and amenities for women. For instance,

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295

I N D U S T R Y P R A C T I C E N O T E 9 . 4

The Hotel of the “Not So Distant” Future

The “Hotel of Tomorrow Project” brought the brains of the hospitality industry together to debate the

demographic and technological changes that will influence the guest room of 2025. A group of 41 par-

ticipants were asked to consider six influential demographics that are and will increasingly impact the

hospitality industry. These demographic trends included:

1. The aging population

2. Environmentalists

3. Leisure guests

4. The corporate/business traveler

5. Wellness seekers

6. Generation Y

The hotel guest room that emerged was characterized by cutting-edge technology for work and play

and extreme personalization. Features included:

• Guests being able to select digital artwork to meet personal preferences during their stay as well as

carpet texture and television stations from their native country.

• A multifunctional desk chair with a built-in microphone, speakers, and camera that is powered through

a floor grid. (Power cords not needed.)

• A retractable bed that can be raised and flipped to become a table or raised to the ceiling to become

a light panel.

• A bathroom floor pad that monitors vital signs.

• Recycled gray water for use in toilets (for conservation).

• A robot that can carry luggage and remove trash.

Source: P. Hayward, A. Taulane, and R. Little, “Lodging Innovators of 2006,” Lodging magazine (December 2006).

market research at Westin indicated that women wanted irons, hair dryers, full-length

mirrors, and coffeemakers in the guest rooms. High-quality makeup mirrors are now

standard at Crown Plaza properties. Guest rooms at Ritz-Carlton hotels feature both

skirt and pants hangers, spray starch, scented sachets, bath salts, bath gels, makeup

remover pads, and detergent for washing delicate clothing. The Loews Vanderbilt Plaza

Hotel in Nashville, Tennessee, has found gender-specific amenities to be very popular

with guests. Whereas men might find cigars and a bottle of red wine in their room,

women are more likely to find fresh flowers, fruit, candy, or white wine.46

Finally, families also represent a significant market. Although the percentage of U.S.

households that are married with children is small (24 percent), new travel niches

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296 Chapter 9 Lodging: Meeting Guest Needs

include travel with extended family members as well as travel by the nontraditional

family. Multigenerational family travel, also referred to as grandtravel, has increased.

About one-third of all leisure travelers are grandparents, and one-third of these took at

least one vacation with their grandchildren last year. Hotels are finding ways to compete

for these young guests with features such as free-stay programs, children’s menus in the

restaurants and room service, pools, and in-room video games. Families are increasingly

interested in emerging lodging alternatives, such as condominium resorts and vacation

ownership. There has also been a marked increase in families wanting participative

programs for the entire family, allowing them to discover new things together, versus

the more traditional “supervisory” programs for children only.47

S E R V I C E , S E R V I C E , S E R V I C E

W hether a limited-service economy hotel property or one in the upper echelons of the luxury segment, each and every lodging establishment has the opportunity to deliver quality service. Quality service is service that “consistently meets and exceeds

customer expectations.”48 Exceeding customer expectations results in a perception of

high-quality service. Failing to meet expectations results in the customer’s perception

of quality being relatively low. Since service is perception based, the true measurement

rests with the individual customer.

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Service, Service, Service 297

A number of hotel ratings and measures are based on a variety of perceptions,

from guest surveys to rating-service inspectors. The ratings assigned by the Forbes

Travel Guide (formerly the Mobil Travel Guide) and the American Automobile Asso-

ciation (AAA) are the best known in North America, but rating services also abound

internationally. Hotels are rated on a multitude of criteria, including guest rooms,

amenities, recreational facilities, decor and furnishings, public areas, housekeeping

standards, restaurant operations including room service, and the maintenance of

grounds and landscaping. The service orientation and professionalism of hotel staff

members, however, are foremost and include both the ability of employees to meet

guests’ needs through their knowledge and interpersonal skills and the employees’

professional attire and grooming. Industry Practice Note 9.5 discusses the rating

services further, both in the United States and abroad, provides a list of sample cri-

teria used by one rating service, and describes some of the world’s most luxurious

and exclusive hotels.

E M P L O Y E E S A S T H E I N T E R N A L C U S T O M E R S

The hotel industry employs approximately 1.9 million hotel property workers.49 Each

employee, directly or indirectly, impacts the service delivered in his or her respective

hotel. The hotel industry is addressing the need to attract and retain the best of the best

in the labor force. Many hotel companies are striving to become employers of choice

through better wage and benefit packages, more career development opportunities,

increased recognition, and mentoring.

For many hotel companies, a positive workplace is a fundamental aspect of the

organizational culture. For example, the Marriott Corporation has, since its inception in

the 1920s, had the philosophy of “Give to your employees and they will give back to you.”

J. Willard Marriott, Jr., chairman of the Marriott Corporation, summarized the company’s

commitment to employees: “Motivate them, train them, care about them, and make

winners out of them. If we treat our employees correctly, they’ll treat the customers

right. And if the customers are treated right, they’ll come back.”50

Whether it is offering English classes for international employees, providing

child care assistance, including tuition reimbursement as well as flexible benefit

plans to address different employee needs, or developing extensive employee recog-

nition programs, hotels will increasingly have to address employees as their “internal

customers.”

The concept of the internal customer is a vital part of the quality goals and pro-

cesses of the Ritz-Carlton Hotel Company. The lateral-service principle of this company

reflects the internal customer role and states that an employee should always provide

assistance if another employee asks for help in satisfying a guest’s request or solving a

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I N D U S T R Y P R A C T I C E N O T E 9 . 5

Hotel Rating Services

The Forbes Travel Guide offers a one-star to five-star rating system for hotels, motels, inns, resorts, and

restaurants in more than 3,000 towns and cities in the United States and Canada. For 2010, five stars

were awarded to an elite group of 53 lodging establishments in North America. Stars can also be taken

away from properties because of perceived lower quality in service and facilities. Based on on-site

visits and inspections, some of which are unannounced until after the hotel stay, these ratings are con-

sidered extremely important in the hotel industry and are used extensively in advertising and other sales

and marketing activities. Table 1 lists five-star hotels for 2010.1 Table 2 presents several categories

evaluated by Forbes in its expectations of a five-star lodging property.1

TA B L E 1

2010 Forbes Travel Guide Five-Star Awards (by state)

CALIFORNIA—BEVERLY HILLS

Montage Beverly Hills Raffles L’Ermitage Beverly Hills

The Beverly Hills Hotel The Peninsula Beverly Hills

CALIFORNIA—DANA POINT

St. Regis Resort, Monarch Beach

CALIFORNIA—LOS ANGELES

Hotel Bel-Air

CALIFORNIA—OAKHURST

Chateau du Sureau

CALIFORNIA—SAN FRANCISCO

Four Seasons Hotel San Francisco The Ritz-Carlton, San Francisco

The St. Regis San Francisco

COLORADO—ASPEN

The Little Nell

COLORADO—COLORADO SPRINGS

The Broadmoor

CONNECTICUT—WASHINGTON

The Mayflower Inn

DISTRICT OF COLUMBIA—WASHINGTON

Four Seasons Hotel Washington, D.C.

FLORIDA—MANALAPAN

The Ritz-Carlton, Palm Beach

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FLORIDA—NAPLES

The Ritz-Carlton, Naples

FLORIDA—PALM BEACH

Four Seasons Resort Palm Beach

GEORGIA—ATLANTA

Four Seasons Hotel Atlanta

GEORGIA—SEA ISLAND

The Cloister

GEORGIA—ST. SIMONS ISLAND

The Lodge at Sea Island Golf Club

HAWAII—KAILUA-KONA AND THE KONA COAST

Four Seasons Resort Hualalai at Historic Ka’upulehu

HAWAII—WAILEA

Four Seasons Resort Maui at Wailea

ILLINOIS—CHICAGO

Four Seasons Hotel Chicago The Peninsula Chicago

MASSACHUSETTS—BOSTON

Boston Harbor Hotel Four Seasons Hotel Boston

MASSACHUSETTS—LENOX

Blantyre

NEVADA—LAS VEGAS

Skylofts at MGM Grand Tower Suites at Encore Las Vegas

Tower Suites at Wynn Las Vegas

NEW YORK—NEW YORK

Four Seasons Hotel New York Mandarin Oriental, New York

The Peninsula New York The Ritz-Carlton New York, Central Park

The St. Regis Hotel, New York Trump International Hotel & Tower New York

NEW YORK—SARANAC LAKE

The Point

NORTH CAROLINA—CARY

The Umstead Hotel and Spa

Continues on next page

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300

I N D U S T R Y P R A C T I C E N O T E 9 . 5

Hotel Rating Services

NORTH CAROLINA—PITTSBORO

The Fearrington House Country Inn

SOUTH CAROLINA—KIAWAH ISLAND

The Sanctuary at Kiawah Island

SOUTH CAROLINA—SUMMERVILLE

Woodlands Resort and Inn

TENNESSEE—NASHVILLE

The Hermitage Hotel

TEXAS—DALLAS

Rosewood Mansion on Turtle Creek

UTAH—PARK CITY

Stein Eriksen Lodge

VERMONT—BARNARD

Twin Farms

VIRGINIA—RICHMOND

The Jefferson Hotel

VIRGINIA—WASHINGTON

The Inn at Little Washington

WYOMING—TETON VILLAGE

Four Seasons Resort Jackson Hole

TA B L E 2

Sample Criteria for the Forbes Five-Star Designation

FORBES TRAVEL GUIDE RATING CRITERIA EXPECTATIONS OF A FIVE-STAR PROPERTY

Guest arrival phase: Reservationist uses the guest’s name throughout the conversation, thanks guest, and asks if there are any other needs. Background noise is limited. Guest name is used upon arrival at the hotel; guest key and credit card are placed in the guest’s hand. Calls to desk ring no more than three times. A full explanation of the property is given at check-in or by bell staff. All guests are escorted to guest rooms. Guest rooms are prepped in advance.

Inspection of guest room:

Room has a sense of elegance, with quality products. The following amenities are available: fax, video, DVD, Internet connectivity, in-room games. Telephones throughout the property should be answered within three rings.

Continues from previous page

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301

The guest’s name is used, and wake-up calls arrive within five minutes of the requested time. Greetings should be friendly.

Ice bucket is filled at turn-down, and a complimentary shoeshine is available. Housekeeping is impeccable. Staff is able to accommodate specific requests for time of service. Floors and counters are likely marble. Robes and towels are plush and large.

Food and beverage: At least two full-service restaurants and cocktail lounges are available. One restaurant should achieve at least a four-star rating. Room service should be available 24 hours a day, with the ability to cater to almost any culinary request. Banquet and catering facilities are expected to be world-class.

The American Automobile Association rates lodging properties based on a system of one to five

diamonds. More than 60,000 properties are evaluated by AAA each year, and fewer than one-half of 1

percent (0.27 percent) attain five-diamond status. Each property undergoes an unannounced evaluation,

and properties receiving a five-diamond rating for the first time generally are reviewed at least twice.

AAA also evaluates restaurants, campgrounds, attractions and events.2

Zagat publishes ratings of U.S. hotels, resorts, and spas based on ratings and reviews from over 20,000

frequent travelers. Its categories of awards include “Top Hotel Chain,” “Best Hotel,” “Best Resort,” “Best

Small Property,” and “Best Spa.” Conde Nast Traveler publishes a Gold List based on a poll of approximately

37,000 readers. Hotels are rated based on rooms, service, restaurants, location, atmosphere, and activi-

ties. Added to the list of hotel ratings and awards are Travel � Leisure’s World’s Best Hotels, the Robb

Report’s Best Luxury Hotels, and Corporate Meetings & Incentives’ Paragon Awards.

Hotel ratings in other parts of the world come from a variety of sources, if they exist at all. The government

takes the role of hotel rater in some areas, whereas in others, it is tourism groups or the operators them-

selves. Examples of the variance in hotel rating systems abound within and among countries.3 For instance:

• In the United Kingdom, the Automobile Association, Royal Auto Club, and English Tourism Council

have adopted a standardized rating system for member properties. The criteria include cleanliness

and housekeeping, service and hospitality, guest rooms, bathrooms, food quality and service, public

rooms, safety and security, and exterior and interior appearance and upkeep. A one- to five-star rating

system is used, with five-star hotels considered among the best in the industry.

• In France, hotels display the federal government-sanctioned star rating, ranging from one to four stars.

Only four-star hotels are guaranteed to have adequate service and facilities for the typical meeting

planner. A number of hotels, however, have opted to take lower ratings than four stars for tax reasons.

• In Germany and some Scandinavian countries, a one- to five-star system exists. By law, hotels can

promote these ratings only for three years before the government requires a new inspection.

• Regarding overall hotel standardization in Europe, about 70 percent of hotels are independently oper-

ated. Internal criteria from chains may therefore be lacking in establishing standards for everything

from room cleanliness to service basics.

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302

guest problem. As a two-time winner of the Malcolm Baldrige National Quality Award,

Ritz-Carlton was judged on seven quality categories including human resources devel-

opment and management. This category comprised human resources planning and

evaluation, high-performance work systems, employee education, training and develop-

ment, and employee well-being and satisfaction.51 The human resources component

will always be a crucial part of the hotel industry. Although technological advances

have modernized an industry that began almost 4,000 years ago, the human factor in

delivering service is more important than ever.

I N D U S T R Y P R A C T I C E N O T E 9 . 5

Hotel Rating Services

• The respective country’s ministry of tourism rates hotels across Latin America. Upon opening, hotels

are inspected and granted from zero to five stars. Some hotels actually engage in rating themselves,

thereby demeaning the star system and even, in some cases, going as high as seven stars. The other

problem faced is that the governmental ratings are given for an indefinite period, even sticking for

the life of the hotel, regardless of declining quality.

• In Asia, there tends to be no common rating system. Probably the most widely accepted rating system

is the Institutional Investor system. This limited system only designates which hotels are world-class

properties. In China, the government ranks hotels using the star system, with five stars being compa-

rable to international luxury hotels. In Hong Kong, hotels are divided into three categories: high tariff,

medium tariff, and hostels or guesthouses. In this country’s rating system, price tends to be the most

accurate indication of quality.3

What Are Some of the “Best of the Best” Hotels?

Although the list of the world’s finest hotels varies depending on the source and time, a number of

lodging properties are well known for providing the ultimate in luxurious service and surroundings. As

would be expected, these hotels attract some of the world’s most exclusive guests, who readily pay top

room rates for their pampered environment. Listed next are just a few examples of some of the “best of

the best” in showcasing luxury suites in some of the world’s best hotels:

Atlantis, the Bahamas

The Bridge Suite in Atlantis is one of the world’s most expensive hotel suites. At $25,000 a night, guests

enjoy a spectacular view from the suite, which is suspended between the two vast Atlantis Royal Tow-

ers. The master bedroom contains a spacious lounge area and a ten-foot four-poster bed. Hand-painted

linens adorn the bed, and guests enjoy wardrobes the size of a garage. There is also the added comfort

and convenience of round-the-clock butler and housekeeping service.

Continues from previous page

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303

S U M M A R Y

T his chapter offered an introduction to a variety of aspects of the lodging industry, serving as a lead-in to the other chapters on lodging. It began with an overview of the history of the industry. Lodging follows the patterns of transportation and destina-

tions of the times. Downtown hotels once served railroad passengers and still serve

the needs of travelers who have business or entertainment interests in the center

Burj Al Arab, Dubai, United Arab Emirates

At 1,053 feet, which is taller than the Eiffel Tower and only slightly shorter (197 feet) than the Empire

State Building, the Burj is the tallest hotel in the world. The hotel is built on top of a man-made island,

with only a bridge linking it to land. The toll for crossing the bridge is $50, which is just a mere fraction

of the typical suite room rate of almost $7,000 per night. The hotel contains the world’s fastest elevators

and has been crafted from more than 96,000 square feet of gold leaf, marble, and crystal. The hotel has

a dramatic view of the surrounding ocean. A submarine ride takes guests to an underwater restaurant

containing a shark-infested aquarium. Other luxuries include a private screening room, rotating beds,

private elevators, and a helipad. There are private butlers to give the ultimate in personal service. In

addition, guests are provided with laptop computers to use during their stay.

The Fairmont, San Francisco

The Penthouse Suite, which spans the entire eighth floor of the Fairmont, typically rents in the range of

$10,000 per night. The suite features three large bedrooms, a living room with a grand piano, an eat-in

kitchen, a billiard room, and a view of San Francisco and the bay. The suite also contains a two-story

circular library and a dining room that can seat 50 people. In addition to the customary personal services

of private butlers and housekeepers, guests staying in the Penthouse Suite also have their choice of a

Porsche 911, Cayenne, or Boxster to drive during their visit.

1. Forbes Rating Service, www.forbestravelguide.com.

2. Hotel Online Special Report, “Six Hotels Added to AAA Five Diamond Winners for 2006, http://www.hotel-online.com/News/

PR2005_4th/Nov05_AAADiamonds.html.

3. Megan Rowe, “Sorting Out Overseas Hotel Ratings,” Religious Conference Manager, February 1, 2003, rcm.meetingsnet.com.

Source: www.mobiltravelguide.com and “Checking Out the World’s Finest,” Asian Hospitality 1, no. 4 (December 2002): 9–11.

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304 Chapter 9 Lodging: Meeting Guest Needs

city. Motels and motor hotels serve people traveling by car, as airport hotels do air

passengers.

Lodging properties can be classified according to various criteria such as price

range, function, location, particular markets served, and distinctiveness of style. Types

of lodging properties according to price range include limited-service hotels, full-

service hotels, and luxury hotels. Commercial hotels and convention hotels are

designated by function. The location category includes downtown properties as

well as those in the suburbs, those along the highways and interstates, and those

near airports.

The functional category includes executive conference centers, resorts, and health

spas. Resorts can be quite diverse, ranging from mega-resorts such as those in Las Vegas

to the remote resorts that incorporate ecotourism in blending with their natural sur-

roundings. Health spas are increasingly found in resort hotels, and time-sharing is one

of the fastest-growing travel and tourism segments. Additional types of hotels include

those offering a particular, distinctive style, such as all-suite properties, extended-stay

hotels, historic conversions, bed-and-breakfasts, and boutique hotels.

Hotel guests can be grouped according to the purpose of their travel. The highest

percentage of travelers is leisure travelers (57 percent), with the remaining 43 percent

traveling for business purposes. Business travelers can be further characterized as cor-

porate or association guests.

Business travelers have a growing and distinct need for certain hotel services and

guest room amenities. Increasingly, these services and amenities are tied to techno-

logical needs, such as wireless access to the Internet both in guest rooms and public

areas. Hotels are also adapting services and amenities for the growing percentage of

international travelers, senior travelers, female travelers, and families traveling with

children.

Quality-driven service—meeting and, whenever possible, exceeding guest

expectations—is vital to the lodging industry. With diversified market segments, the

ability to cater to the dynamic needs of guests is key to any lodging company’s suc-

cess. Numerous hotel rating services reflect the level of service and caliber of facili-

ties of individual properties. Two of the best known are the Forbes Travel Guide star

ratings and the American Automobile Association diamond ratings. Each year, a

small group of elite hotels receives the highest ratings of five stars and five

diamonds.

The delivery of consistent quality service hinges on versatile employees who are

knowledgeable and skilled in their respective positions and who understand and gain

satisfaction from their ability to positively impact each guest’s hotel visit. The employees,

as “internal customers,” are truly the stars of the lodging industry.

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Summary 305

Review Questions

1. How does transportation affect the hotel business?

2. What travel trends are favorable to lodging? What ones are not? What do you think

will be the best market segments for lodging in your community?

3. What are some means for hotel companies to increase sales to international

travelers?

4. Of the hotels in your community, how would you characterize them in terms of

type of lodging?

5. Identify hotels with which you are familiar. If you were a hotel rater, how would you

rate these properties (one to five stars and/or diamonds) and why? What criteria

would you use in determining your rating?

6. If you were going to work in a hotel, what type of property would be of most inter-

est to you as a potential employee? Why?

Transportation and destination

patterns

Ordinaries

Motel

Motor hotels

Limited-service hotels

Full-service hotels

Luxury hotels

Convention hotels

Commercial hotels

Downtown hotels

Suburban hotels

Highway/interstate

hotels

Airport hotels

Executive conference centers

Resorts

Destination resorts

Nondestination resorts

Ecotourism

Casino hotels and resorts

Health spas

Vacation ownership

All-suite hotels

Extended-stay hotels

Bed-and-breakfast inns (B&Bs)

Boutique hotels

Corporate market segment

Association market segment

SMERF segment

In-room technology

Forbes Travel Guides

American Automobile

Association (AAA)

Employers of choice

Internal customers

Key Words and Concepts

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306 Chapter 9 Lodging: Meeting Guest Needs

Internet Exercises

1. Site name: The American Hotel & Lodging Association (AH&LA)

URL: www.ahla.com

Background information: Serving the hospitality industry for nearly a century, AH&LA

is the sole national association representing all sectors and stakeholders in the

lodging industry, including individual hotel property members, hotel companies,

student and faculty members, and industry suppliers. AH&LA provides members

with national advocacy on Capitol Hill, public relations and image management,

education, research and information, and other services to provide bottom-line

savings and ensure a positive business climate for the lodging industry.

Exercises:

a. Navigate to the “information center” link and review the statistics from 2001

through the most recent year listed, comparing the industry performance statis-

tics (occupancy percentage, sales, number of properties, etc.). Has there been

an increase or decrease in occupancy over the years? What are some possible

reasons why this increase or decrease occurred?

b. From the AH&LA Web site, describe the typical lodging customer for the most

recent year that data are available.

c. What are the top five hotel companies worldwide? What hotel brands do they

have in their portfolio?

2. Site name: Marriott

URL: www.marriott.com

Background information: Marriott International, Inc., is a leading worldwide hospital-

ity company. Its heritage can be traced to a root beer stand opened in Washing-

ton, DC, in 1927 by J. Willard and Alice S. Marriott. Today, Marriott International

has more than 3,200 lodging properties located in the United States and 70 other

countries and territories.

Exercises: Under “Marriott News Center” on the Marriott Web site, identify all the hotel

brands in the Marriott portfolio. Based on the information on the Web site, determine

which category each brand might fit into (limited service, full-service, luxury, resorts,

suites, extended stay, etc.).

3. Site name: Forbes Travel Guide

URL: www.forbestravelguide.com

Background information: Since inventing the Five-Star rating system in 1958, Forbes

Travel Guide (formerly Mobil Travel Guide) has provided travelers with an objective

rating for hotels, restaurants, and spas in the United States and Canada and more

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Summary 307

recently in China. Its goal is to provide ratings and recommendations that you can

trust to make the best possible travel decisions.

Exercises:

a. What criteria does Forbes Travel Guide use to rate hotels?

b. Do you feel that the criteria used are valid, or are they rigid and arbitrary?

Why?

c. How difficult do you think it would be for a hotel manager to acquire each of

the stars?

4. Site name: InterContinental Hotels Group

URL: www.ichotelsgroup.com

Background information: InterContinental Hotels Group PLC is the world’s largest

hotel group by number of rooms. InterContinental Hotels Group owns, manages,

leases, or franchises, through various subsidiaries, over 4,400 hotels and 640,000

guest rooms in nearly 100 countries and territories around the world.

Exercises:

a. List the seven hotel brand names in the InterContinental Hotels Group.

b. Explain what Priority Club Rewards entails through the InterContinental Hotels

Group.

Notes

1. American Hotel & Lodging Association Information Center, www.ahla.com.

2. PKF Consulting, Hotel Development (Washington, DC: Urban Land Institute, 1996).

3. Ibid.

4. Ibid.

5. Ibid.

6. American Hotel & Lodging Association Information Center.

7. PKF Consulting, Hotel Development.

8. American Hotel & Lodging Association Information Center.

9. PKF Consulting, Hotel Development.

10. J. W. Marriott and Kathi Ann Brown, The Spirit to Serve (Salt Lake City, UT: Deseret Book

Company, 1989).

11. American Hotel & Lodging Association Information Center.

12. PKF Consulting, Hotel Development.

13. Hospitality Research Group, PKF Consulting, Trends in the Hotel Industry, U.S. ed., 2009.

14. Ibid.

15. C. Compton, “Luxury Brand Stays True to its Roots,” The PArgue Post, July 14, 2010.

www.praguepost.com/business/5053-luxury-brand-stays-true-to-its-roots.html.

16. www.strglobal.com/.

17. Hospitality Research Group, PKF Consulting, Trends in the Hotel Industry.

18. Ibid.

CH009.indd 307 24/12/10 12:56 PM

308 Chapter 9 Lodging: Meeting Guest Needs

19. PKF Consulting, Hotel Development.

20. Ibid.

21. Orlando/Orange County Convention Center & Visitors Bureau, 2009, www.orlandoinfo.com/

research/lodging/inventory.cfm.

22. Las Vegas Convention and Visitors Authority, www.lvcva.com.

23. James Ruggia, “Letting the Jungle in on Five-Star Luxury,” Travel Agent, October 25, 1999.

24. Gerald W. Lattin, “The Lodging and Food Service Industry,” Educational Institute of the

American Hotel and Lodging Association, 1998.

25. R. Mandelbaum & G. Lerner. “Hotel Spas: Therapy for Tough Times,” AH&LA Knowledge

Base, October 21, 2009, ahlaradio.hsyndicate.com/news/4040529.html.

26. Ibid.

27. American Resort Development Association, December 1, 2009, www.arda.org.

28. Ibid.

29. Ahmed Ismail, Hotel Sales and Operation (Albany, NY: Delmar, 1999).

30. BedandBreakfast.com, December 1, 2009.

31. Sean Hennessey, “Can Boutique Hotels Be Branded Without Losing Uniqueness?” Hotel &

Motel Management, October 16, 2000.

32. American Hotel & Lodging Association, “The 2010 Lodging Industry Profile.” www

.ahla.com/content.aspx?id�30505.

33. Ibid.

34. Ibid.

35. Ibid.

36. Ibid.

37. Ibid.

38. Ibid.

39. Lodging Econometrics, December 2, 2009, www.lodgingeconometrics.com/.

40. www.atlantis.com.

41. C. Cobanoglu, “Making the Grade,” Hospitality Techonology, August 10, 2010. www

.htmagazine.com/ME2/dirmod.asp?sid�8D86DF469BD74C098382D9532C904D8E&nm�&

type�MultiPublishing&mod�PublishingTitles&mid�3E19674330734FF1BBDA3D67B50C

82F1&tier�4&id�139BAAC618D647068FE58FF9B978C17F .

42. R. Leigh Kessler, “21st Century Room Service,” AAHOA Hospitality (February 2001): 43–44.

43. Ibid.

44. S. Turkel, “The U.S. Population Age 65 and Over Is Expected to Double in the Next 25 Years:

What Does This Mean for the Hotel Industry?” AH&LA Knowledge Base, ahlaradio

.hsyndicate.com/news/4028342.html.

45. U. S. Travel Association (formerly Travel Industry Association), “Business and Convention

Travelers’ Habits Tracked in New TIA Survey,” 2/12/2005, AH&LA-Knowledge Base, ahlaradio.

hsyndicate.com/news/4022144.html.

46. Elaine Yetzer, “Upscale Hotels Tailor Amenities Specifically for Men, Women,” Hotel & Motel

Management, October 16, 2000.

47. J. Runice, “Resorts Offer Kids Rousing Activities, Spa Treatments,” Chicago Daily Herald,

January 7, 2007.

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Summary 309

48. Robert H. Woods and Judy Z. King, Quality Leadership and Management in the Hospitality

Industry, (East Lansing, MI: Educational Institute of the American Hotel and Motel Associa-

tion, 2002).

49. Bureau of Labor Statistics, “Career Guide to Industries, 2010–2011 Edition.” www.bls

.gov/oco.

50. Charles Bernstein and Ron Paul, Winning the Chain Restaurant Game (New York: John

Wiley & Sons, 1996).

51. Ritz-Carlton Hotel Company, December 2, 2009, corporate.ritzcarlton.com/en/Press/

Kits/Baldrige.htm.

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