LECTURE NOTES 6

ACCOMMODATIONS AND HOSPITALITY SERVICES

Introduction

Hospitality is the term generally associated with hotels and restaurants. The accommodations industry (also referred to as the lodging or hotel industry) and the food and beverage industry (also referred to as the catering industry) encompass a variety of facilities and are a dynamic part of the global travel and tourism industry. - The accommodations industry is central to international tourism. Tourism flows are directly influenced by the size of this sector, by the way it adapts to demand and by the quality of the accommodation on offer. Three characteristics are associated with accommodation.

Seasonality – its economic activities are seasonal, which implies a great flexibility in the use of its structures

Manpower planning – the industry is labor-intensive, which further compounds the problems caused by seasonality. It requires accurate forward planning of temporary employment.

Perishability – accommodation production cannot be stocked and non-utilization is expensive

The wide array of lodging facilities, from luxurious resorts to modest bed and breakfast establishments reflects the different needs and preferences of travelers and market dynamics. Worldwide, the number of available hotel rooms has increased rapidly to keep pace with the growth in international and domestic tourism. - The food and beverage industry has also expanded as tourism has boomed. Much like the accommodations industry, the food and beverage industry is emerging in the global tourism economy through worldwide chains, providing new opportunities for the hospitality industry’s growth and expansion.

1. Historical DevelopmentTravelers have sought rest and refreshment at public houses and hostels throughout history. At the height of the Roman Empire, inns flourished along major highways, primarily for government officials and persons of importance (Gee, 1994, p. 27). In Asia, small shelters were placed at stops along caravan routes. Pilgrims looked to religious houses to give sanctuary, rest, and refreshment along the way. The term hospitality is derived from hospice, a medieval “house of rest for travelers.”Interestingly, even to this day some Alpine hospices in Europe continue the tradition of offering food and rest to weary travelers (Lattin, 1985, p. 15). Food service also can be traced back in history, perhaps as far back as 4000 B.C. when establishments began selling food and wine. Such establishments continued and flourished during the Greek, Roman, and Byzantine periods.

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It was not until the 15th century that commercial hospitality ventures made their appearance in Europe. The forerunner of the “bed and breakfast” type of accommodation was the spare bed in private homes offered to travelers for a small price. At the same time, freestanding inns appeared, often built by affluent landowners and named after them. In the 16th century, some inns and taverns in England began serving meals at set prices at regular meal times (Mill, 1990, p. 321). During this era, road development and coach travel spurred the growth of travelers and the number of inns to serve them. By the end of the 17th and the dawn of the 18th centuries, lodging facilities which could be called the early versions of hotels made their appearance. In 1774 the first hotel was opened in London; later in 1794 the City Hotel opened in New York City. In the late 18th century, the term “restaurant” was first used in Paris referring to a dining room, and in the United States, Delmonico’s opened in 1834 offering meals in the English fashion of fine dining (Coltman, 1989, pp. 326-327).In the United States, the first hotel equipped with modern amenities resembling today’s facilities is believed to be the Tremont House which was built in 1892 in Boston, Massachusetts. The Tremont House established a number of precedents with a lobby, indoor plumbing, private guest rooms with locking doors, and a complimentary cake of bath soap (Mill, 1990, p. 15). Elsewhere, hotels like the Ritz in Paris, France, the Savoy in London, England, and the Raffles in Singapore set standards for service and quality. In the 20th century, many of the innovations in the accommodations sector continued to take place in the United States. American hotelier E.M. Statler was among the first to upgrade the guest experience by offering larger guest rooms with private baths, running water, light switches, telephones, room service, in-room radios, and hotel-to-hotel reservations systems. Further innovations in American hotels included central heating, air conditioning, passenger elevators, electric lighting, and sewage disposal systems. These innovations were quickly adopted by international hotels (Gee, 1994, p. 28).

2. Accommodations ClassificationSince the advent of mass tourism, many forms of accommodation have been developed. These can be classified according to different criteria:

Built accommodation or alternative accommodation: hotels, resort properties, destination property, national heritage accommodation, second homes, cruise liners and holiday centers, campsites.

Individual or collective accommodation: rented accommodation or holiday villages

Profit and non-profit making accommodation: hotels or holiday camps for children or social accommodation

Accommodations can be classified into various categories, illustrating the diversity of the industry. The wide array of available room types and amenities is a reflection of an industry that must respond to various consumer needs. Any attempt to establish a uniform classification system faces problems of differing types of accommodations around the world. It might be unlikely to

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find a pousada (Portugal), an auberge (France), or a ryokan (Japan) in the United States, yet such accommodations are common in their own countries. As early as 1962, the International Union of Official Travel Organizations, a forerunner of the World Tourism Organization, attempted to establish a globally uniform hotel classification system. Various attempts have been made since then, but the obstacles to a uniform classification system include variations in definitions, facilities, service standards, management, and cultural influences on service which can differ dramatically from country to country (Gee, 1994, p. 391).What has emerged are different systems developed by countries and regions around the world, through the efforts of the private sector as well as governments. Nations which embark upon tourism usually as an economic activity to attract international travelers have recognized the advantages of a classification system that tourists will understand. Many have official, government-initiated classification systems which have been developed and widely used in the European Union countries based on both physical and qualitative criteria. In other countries, classification systems have been established through private sector efforts especially through commercial services such as Guide Michelin, AA Britain, and the American Automobile Association (AAA). The private sector classification systems have the support of the hotel industry largely because the industry often views the classifications and ratings as more of a promotional feature, which can be used in marketing campaigns. While many of the definitions used are similar in a global tourism market place, there are differences among countries between commercial and official classifications.

2.1. HotelsThe term “hotel” has assumed a generic meaning around the world, applying to a wide range of property types. There is no one way to classify the different types of hotels that exist. In the United States, the key to the property’s type is based on its amenities identified by the descriptor preceding “hotel.” In general these descriptors identify the target markets that the property aims to attract such as airport hotel, convention hotel, commercial hotel, luxury hotel, budget or economy hotel, casino or resort hotel. Some subgroups within hotels include:• Airport hotels: located within ten miles of an airport with amenities for the air traveler including facilities for business meetings.• Convention hotel: located in major cities, often near a municipal convention center. Major space dedication to meetings and exhibition area. Amenities for meetings and business travel.• Commercial hotels: located in urban areas with business travelers as the primary target market, usually upscale or midscale.• Suite hotels: apartment-style hotel rooms, generally offering more space and upscale amenities.• Motor hotels: located close to a highway for automobile travelers with provisions for parking and amenities which may include swimming pool, coffee shops, and other family-oriented facilities.

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Hotels differ by amenities and the levels of service offered. At the lowest level, budget motels tend to focus on cost-conscious travelers as their target market. The overall goal of these establishments is to keep costs down and pass the operational savings on to the customer. The limited amenities offered vary from chain to chain, each attempting to establish a price-value relationship in the consumers’ minds.

2.2. Resort PropertiesResorts are found worldwide, wherever people gather for activities as diverse as golf, tennis, spas, skiing, or a combination of similar recreational activities.Because the resort guest is typically a longer stay client, resort properties generally offer more activities and extended amenities than urban hotels. Although many resort properties are surf-and-sun destinations, resorts today are becoming more specialized. Theme parks, such as Disney World in the U.S., have capitalized on the resort concept by making these facilities a part of the entire Disney experience (Berkowitz, 1980, p. 114).The one-stop destination pioneered by Disney continues to expand around the globe. (Singapore’s Sentosa Island, for example, is a popular attraction featuring a resort hotel and rides and attractions). Although the accommodations element is a core facility, restaurants, shops, and attractions are all part of one operation. Expansion into these ventures may be done more along the lines of alliances and partnerships than ownership, but destination resorts will continue to grow as the industry increasingly views itself as part of broader industries, namely recreation and entertainment.

2.3. The Casino/Destination PropertyNo single city has had a greater impact on the casino lodging industry as Las Vegas, Nevada in the United States. The casino has long been recognized as a specialized property with gaming as the central activity, but in the past decade Las Vegas has spawned a new type of lodging which is a combination casino and destination property, not to be compared with the casino hotels of Monte Carlo wherein Monte Carlo, rather than the hotel, is the destination. This hybrid is often considered a variation of the theme resorts developed by the Disney Corporation. The concept has been used successfully elsewhere as in Sun City in South Africa, which is a well-known international destination which offers casinos, golf courses, a jungle theme park, and other entertainment attractions as part of the large resort complex. These properties function to a large degree as self-contained destinations which attempt to keep the guest, including family members, at the property as much as possible. To accomplish this, the resorts include extensive amenities and generally some type of theme park which is part of the property. Although gaming remains central, the extended amenities serve to capture more of the tourist expenditures from all members of the family unit.

2.4. National Heritage AccommodationsIn many countries, historic buildings and structures such as palaces, castles, chateaus, monasteries, and convents have been converted to hotels. Some are privately run but others are part of a government-run chain such as the

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Parador hotels in Spain which are popular with both international visitors and Spaniards. Paradors are usually four- and five-star accommodations which have been modernized within but maintain their historical exteriors.They are often furnished with art treasures, antiques, or reproductions, and have reputations for good service and meals.

2.5. Bed and BreakfastsThis segment of the accommodations industry has grown steadily over the years and is now made up of thousands of privately owned homes and inns around the globe. Bed and breakfasts (B and Bs) run the gamut from luxury to economy-type accommodations. Today, the business of B&Bs has become more highly organized with many of the properties joining international reservations systems. Other modest establishments which offer breakfast and sometimes light meals include hostels and pensions which are often family-run operations.

2.6. Second homesSecond homes include:

- homes wholly owned by tourists – lodgings in addition to their main residence they use for tourism purposes. Secondary homes maintain and sometimes boost economic activities of different industrial sectors, bring in currency, increase general accommodation capacity in the region

- homes with shared collective services (condominiums) – serviced by a management company (maintenance of the apartments, laundry and linen hire, management of common equipment). Owners usually use the apartments for themselves or put it in the hands of the management company for rental, thus receiving a proportion of the rent. The system was developed in the US, Spain and France, mainly in the mountain resorts and in some seaside resorts.

- Time shares, like resorts, tend to be located in popular tourist destinations. Time shares basically are individually owned “room/apartment intervals” which allow the owner to access generally upscale accommodations for a usually fixed period of time each year. The attraction of time share accommodations is that they tend to be more apartment style and may be a part of a hotel, resort, or condominium.

The arrangement is a permanent one unless the ownership share in the property is disposed of. Increasingly, the properties are managed by specialized management companies including several major international hotel management organizations such as Marriott, Hilton Hotels Corporation, and Disney.The US is the largest timeshare area, both in terms of the number of resorts and number of owners. The biggest timeshare market in Europe is UK.

2.7. Furnished rented accommodationFurnished accommodation rented on a seasonal basis has become an important type of tourism lodging particularly in countries where B&B is common, like the UK. The sector brings the advantage of elasticity to the tourism supply, by not bearing the high fixed costs of the hotel trade.

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- seasonally rented furnished accommodation – self-catering apartments, studios and villas rented to tourists. The rapid development of this sector has persuaded tour operators to develop new tourism products (transport + accommodation) at a lower cost than those using hotels. The most buoyant markets are in the Mediterranean resorts.- cottages and farmhouse accommodation – rural cottages (gites) divert tourist flows towards rural areas by providing new and inexpensive accommodation. They have seen rapid growth recently particularly in France. - guest lodging – this form of lodging is particularly developed in Great Britain, Austria, Ireland, Portugal (estalagem), Italy (pensione) and Greece. Rooms are rented in private houses with breakfast provided. Quality is difficult to control in this type of accommodation.

2.8. Social accommodationSocial accommodation includes holiday centers, family holiday camps, youth hostels and accommodation provided by associations and staff clubs in firms. The accommodation is provided on a non-profit basis.

3. Food and Beverage Establishment ClassificationLike the accommodations sector, food and beverage establishments can be subdivided into many segments. However, unlike the accommodations sector, a large part of the food and beverage sector is not related to the travel industry. These include major sectors such as institutional food service in schools, colleges, and hospitals, military food service, and other establishments. The segments which are interrelated with the travel industry are commercial establishments which are primarily or partially tourism dependent based on their location, clientele, and seasonal traffic (Gee, Makens, & Choy, 1989, p. 324).In terms of total tourist expenditures, money spent on food and beverages is second only to airline transportation in terms of vacation costs. Food away from home is conservatively estimated at 18 to 20% of all tourist expenditures. However, it would be difficult to determine the percentage of sales attributable to the travel industry since food and beverage revenues are usually generated in restaurant establishments by both visitors and residents in the community.Food and beverage outlets are more sensitive to economic cycles than most other types of retail businesses and typically have high failure rates. A restaurant’s profit margin is based on its ability to control food and labor costs, which may run as high as 60 to 65% of revenues while the ratio of profit to sales is very low.

3.1. Hotel-Related Food EstablishmentsEstablishments which are tourism dependent are often owned and operated by a hotel, or located in space leased out to independent restaurant operators by hotels. Hotels may offer a variety of outlets including restaurants, dining rooms, coffee shops, room service, catering, and banquets. They also offer a variety of meal plans.

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Although the percentage of hotel income from food and beverage sales has gradually declined in the U.S. owing to changes in customer preferences and eating and drinking habits, full-service international hotels averaged approximately 30% of their revenues from food and beverage sales. In some locales such as Singapore and Hong Kong, food and beverage sales are as high as 50% of hotel revenues.

3.2. Independent Food Service EstablishmentsMany independent food service establishments rely on tourism business as well as local trade. These establishments may be individually owned and operated, part of a corporate chain, or a franchise. The vast majority of franchisees are fast-food outlets. Franchised restaurants are expanding worldwide such as the U.S.-based McDonald’s and Mövenpick in Europe. Mövenpick began in Zurich, Switzerland in 1948 and expanded into international activities in 1968. Since then it has expanded its operations to include packaged food products as well as hotels in countries in Europe, the Middle East, and Asia.Another major food service segment within the travel industry is transportation-related. Airlines, for example, spend billions of dollars each year on food and beverage purchases for inflight service (Marriott In-flight). Some carriers have their own ground commissaries with secured and bonded areas for duty-free liquor; others contract out their food service with commercial caterers. In the U.S., the latter has become the more common practice while in Europe and Asia, carriers prefer to operate their own kitchens in order to emphasize the importance of onboard dining.Onboard food and beverage service is also a hallmark of sea cruises, which typically offer meal service around-the-clock, constituting one of the highlights of the cruise experience (Sodexho – The Seiler Corp., Boatel)With the revival of the legendary Orient Express in Europe and the Orient Express on the E & O lines traversing Singapore, Malaysia and Thailand, the glamour of luxury train travel during the 1920s and 1930s has been restored, a major part of which is based on outstanding dining cars and impeccable service.

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