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13. The Tri Spa Showerhead by Oxygenics will attempt to differentiate themselves and stress value rather 14. The Media Center by Microsoft than discounts. This adds to the fascination of the business. 15. A Stain-Resistant Mattress Cover by WL Gore &. Associ- ates, Inc. 16. SmartLine Waethermatic: Smart watering system Extended-Stay Hotels Other hotels cater to guests who stay for an extended period. Most of the major North American cities have hotel chain They will, of course, take guests for a shorter time when space representation, such as Doubletree, Four Seasons, Hilton, Holi- is available. However, the majority of guests are long term. day Inn, Hyatt, Marriott, Omni, Ramada, Radisson, Ritz-Carlton, Guests take advantage of a reduction in the rates based on the Loews, Le Meridian, Sheraton, and Westin. Some of these length of their stay. The mix of guests is mainly business and chains are positioning themselves as basic full-service proper- professional/technical, or relocating families. ties. An example of this strategy is Marriott’s Courtyard hotels, Residence Inns, Candlewood, and Homewood Suites are which have small lobbies and very limited food and beverage market leaders in this segment of the lodging industry. These offerings. The resulting savings are passed on to the guests in properties offer full kitchen facilities and shopping services or the form of more competitive rates. Thus, the full-service a convenience store on the premises. Complimentary conti- market may also be subdivided into upscale and midpriced nental breakfast and evening cocktails are served in the hotels. lobby. Some properties offer a business center and recre- ational facilities. Economy/Budget Hotels

An economy or budget hotel offers clean, reasonably sized, and All-Suite Extended-Stay Hotels furnished rooms without the frills of full-service hotels. Chains All-suite extended-stay hotels typically offer approximately 25 like Travelodge, Motel 6, Microtel, Days Inn, and La Quinta be- percent more space for the same cost as will a regular hotel in came popular by focusing on selling beds rather than meals or the same price range. The additional space is usually in the meetings. This enables them to offer rates that are about 30 form of a lounge and possibly a kitchenette area. percent lower than the midpriced hotels. Economy properties, Embassy Suites, owned and operated by the Hilton Corpora- which represent about 15 per- tion; Residence Inns, Fairfield cent of total hotel rooms, have Suites, and Town-Place Suites, experienced tremendous all by Marriott; Extended Stay growth. America; Homewood Suites; Promus’ Hampton Inns, and Guest Quarters are the Marriott’s Fairfield, and market leaders in the all-suite, Choice’s Comfort Inns are extended-stay segment of the more recent entrants to this lodging industry. Candlewood market sector. These proper- has some all-suite extended- ties do not have restaurants or stay rooms in its properties offer substantial food and bev- and full kitchens, whereas Em- erages, but they do offer bassy Suites does not have full Formule 1 is an Accor hotel economy property. guests a continental breakfast kitchens. The additional space in the lobby. of a suite property plus a full After enjoying a wave of growth for much of the past 20 kitchen is an advantage for some guests. Several of the major years, the economy hotel segment may be close to the satu- hotel chains have all-suite extended-stay subsidiaries, includ- Lodging ration point. There are about 25,000 properties in this seg- ing Radisson, Choice Hotels (which dominates the economy ment, with many markets. The economic law of supply and all-suite segment with Comfort and Quality Suites), Sheraton demand rules; if an area has too many similar properties, price Suites, Hilton Suites, Homegate Studios, and Suites by Wynd-

CHAPTER 4 wars usually break out as hotels try to attract guests. Some ham Hotels. These properties provide a closer-to-home feeling

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for guests who may be relocating or attending seminars or who that are used by people rather than let like condotels; a spa, are on work-related projects that necessitate a stay of greater and sports facilities. Mixed-use hotels can also be a part of a than about five days. major urban or resort development, which may include office There are now over 2,500 extended-stay properties. Many buildings, convention centers, sporting facilities, or shopping of these properties have business centers and offer services malls. like grocery shopping and laundry/dry cleaning. The design- ers of extended-stay properties realize that guests prefer a homelike atmosphere. Accordingly, many properties are built Bed and Breakfast Inns to encourage a community feeling, which allows guests to in- Bed and breakfast inns, or B&Bs as they are familiarly known, formally interact. offer an alternative lodging experience to the typical hotel or mo- tel. According to Travel Assist Magazine, the B&B is a concept Condotels that began in Europe and started as overnight lodging in a private home. A As the word suggests, a condotel is a Bed and breakfasts try to pro- true B&B is an accommodation with combination of hotel and condo- vide“ a personal experience during the owner, who lives on the premises minium. Developers build a hotel and the guest’s stay. They are a simple, or nearby, providing a clean, attrac- sell it as condo units, which the own- quiet way for people to just get tive accommodation and breakfast, ers can pool for use as hotel rooms away and usually offer more af- usually a memorable one. The host and suites. The hotel-operating com- also offers to help the guest with pany gets a cut of the money from fordable costs than big corporate directions, restaurants, and sugges- renting the units and so does the chains. tions for local entertainment or sight- owner. The owner of the condo unit Rebecca Boulay, ” seeing. The Oxford Bed and Breakfast, may have exclusive right to the use of Marlborough, MA There are many different styles of the unit for a fixed period of time B&Bs with prices ranging from about (usually one month); other than that, $30 to $300 or more per night. A B&B may be a quaint cottage the hotel-operating company knows that it can rent out the with a white-picket fence leading to a gingerbread house, tiny condos. and homey, with two or three rooms available. On the other hand, some B&Bs sprawling, ranch-style homes in the Rock- Mixed-Use Hotel Development ies; multistoried town homes in large cities; farms; adobe villas; log cabins; lighthouses; or stately mansions. The variety is part Some new hotels are developed as mixed-use properties. This of the thrill, romance, and charm of the B&B experience.6 means that a hotel may also have “residences”—actual condos There are an estimated 25,000 B&Bs in the United States. These inns have flourished for many reasons. Some business A bed and breakfast inn in Lavenham, Suffolk, England. travelers have grown weary of the complexities of the check- in/check-out processes at some commercial hotels. The high transient rates at hotels has created an opportunity to serve a segment of travelers who are more price-sensitive. Also, many leisure travelers are looking for accommodation some- Types and Location of Hotels where between a large, formal hotel and staying with friends. B&Bs offer a homelike atmosphere. They are aptly called “a home away from home.” A community breakfast with other lodgers and hosts enhances this feeling. Each B&B is as unique as its owner. Décor varies according to the region of the location and the owner’s tastes. B&B owners often pro- vide all the necessary labor, but some employ full- or part- time labor.

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Resort Hotels some adult guests prefer a quiet ambiance. Other resort ho- tels go out of their way to encourage families: Camp Hyatt is Resort hotels came of age with the advent of rail travel. In- a prominent example. Hyatt hotels have organized a program creasingly, city dwellers and others had the urge to vacation in with a variety of activities for locations that they found ap- children, which gives parents pealing. Traveling to these of- an opportunity to either enjoy ten more exotic locations some free time or join in the became a part of the pleasure fun with their children. Many experience. In the late 1800s, resort hotels began to attract luxury resort hotels were de- conventions, conferences, veloped to accommodate the and meetings. This enables clientele that the railways them to maintain or increase brought. occupancy, particularly during Such hotels include the fa- the low and shoulder (be- mous Greenbrier at White Sul- tween high and low travel) phur Springs, West Virginia; seasons. the Hotel del Coronado in Guests go to resorts for A resort in Johor, Malaysia, attracts guests from around the world. Coronado (near San Diego), leisure and recreation. They California; and the Homestead want a good climate—summer at Hot Springs, Virginia. In Canada, the Banff Springs Hotel and or winter—in which they can relax or engage in recreational ac- Chateau Lake Louise drew the rich and famous of the day to tivities. Due to the remoteness of many resorts, guests are a picturesque locations in the Canadian Rocky Mountains. “captured clientele”; they may be on the property for days at a The leisure and pleasure travelers of those days were time. This presents resort managers with some unique operating drawn by resorts, beaches, or spectacular mountain scenery. challenges. Another operating hurdle concerns seasonality— At first, many of these grand resorts were seasonal. How- some resorts either do not operate year-round or have periods ever, as automobile and air travel made even the remote of very low occupancy. Both can make it difficult to attract, train, resorts more accessible and an increasing number of people and retain competent staff. could afford to visit, many resorts became year-round Many guests travel to resorts from considerable dis- properties. tances. Consequently, they tend to stay longer than they Resort communities sprang up in the sunshine belt from would at transient hotels. The food and beverage manager Palm Springs to Palm Beach. Some resorts focused on major must then provide varied, quality menus that are served in an sporting activities such as skiing, golf, or fishing; others offered attractive, attentive manner. To achieve this, resorts often family vacations. Further improvements in both air and automo- use a cyclical menu that repeats itself every 14 to 21 days. bile travel brought exotic locations within the reach of the pop- Also, they provide a wide variety and number of dishes to ulation. Europe, the Caribbean, and Mexico became more stimulate interest. Menus are now more health conscious— accessible. As the years passed, some of the resorts declined lighter and low in saturated fats, cholesterol, salt, and causing guests to seek other locations. calories. The traditional month-long, family resort vacation gave way The food needs to be presented in a variety of different to shorter, more frequent getaways of four to seven days. The ways. Buffets are popular because they give guests the regular resort visitors became older; in general, younger opportunity to make choices from an array of foods. Barbe- guests preferred the mobility of the automobile and the more cues, display cooking, poolside, specialty restaurants, and re- informal atmosphere provided by the newer and more infor- ciprocal dining arrangements with nearby hotels give guests

Lodging mal resorts. more options. To survive, the resort hotels became more astute in mar- With increased global competition, not only from other keting to different types of guests. For example, certain resorts but also from cruise lines, resort managers must first resorts do not allow children in the high season because attract guests and then turn them into repeat business, CHAPTER 4

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which traditionally has been the foundation of the resort’s fees are paid each year to a homeowners’ association for the viability. maintenance of the resort. Just like taking care of a home, re- To increase occupancy rates resorts have diversified their sort maintenance fees help retain the quality and future value marketing mix to include conventions, business meetings, of the resort property. sales meetings, incentive groups, sporting events, additional Vacation clubs, or About 4.0 percent of sporting and recreational facilities, spas, adventure tourism, point-based programs, all“ U.S. households own ecotourism, and so on. Because guests are captive in the re- provide the flexible use vacation ownership. sort, they expect to be pampered. This requires an attentive, of accommodations in ” well-trained staff and that is a challenge in some remote areas multiple resort loca- and in developing countries. tions. With these prod- There are a number of benefits to operating resorts. The ucts, club members guests are much more relaxed compared to those at transient purchase points that hotels, and the resorts are located in scenically beautiful ar- represent either a travel eas. This frequently enables staff to enjoy a better quality of and use membership life than do their transient hotel counterparts. Returning or a deeded real estate product. These points are then used guests tend to treat associates like friends. This adds to the like currency to purchase accommodations of various sizes, overall partylike atmosphere, which is prevalent at many of the during a certain season, for a set number of days at a partici- established resorts. pating resort. The number of points needed to access the re- sort accommodations will vary by the members’ demand for unit size, season, resort location, and amenities. A vacation Check Your Knowledge club may have a specific term of ownership or be deeded in perpetuity. 1. How are hotels rated and classified? Vacation ownership is the politically correct way of saying 2. Name and describe the different types of hotels and time-share. Essentially, vacation ownership means that a per- lodging. son purchases the use of a unit similar to a condominium for blocks of times, usually in weeks. Henry Silverman of Cendant, Vacation Ownership which owns the Indianapolis, Indiana-based Resort Condo- miniums International (RCI), says that a time-share is really a From its beginnings in the French Alps in the late 1960s, va- two-bedroom suite that is owned, rather than a hotel room cation ownership has become the fastest-growing segment of that is rented for a transient night. A vacation club, on the the U.S. travel and tourism industry, increasing in popularity at other hand, is a “travel-and-use” product. Consumers do not the rate of about 15 percent each year. Vacation ownership buy a vacation with a fixed week, unit size, season, location, offers consumers the opportunity to purchase fully furnished or length each year. Instead, they purchase points that repre- vacation accommodations in a variety of forms, such as sent currency, which is used to access the club’s vacation weekly intervals or points in points-based systems, for a per- benefits. An important advantage to this is the product’s flexi- centage of the cost of full ownership. For a one-time pur- bility, especially when it is tied to a point system. Vacation chase price and payment of a yearly maintenance fee, clubs are not involved with real estate, so this type of system purchasers own their vacation either in perpetuity or for a pre- works well with the hotel marketing programs, such as re- determined number of years. Owners share both the use and wards programs. Types and Location of Hotels the costs of upkeep of their unit and the common grounds of Unlike a hotel room or rental cottage that requires payment the resort property. Vacation ownership purchases are typi- for each use according to rates that usually increase each year, cally financed through consumer loans of 5 to 10 years’ dura- ownership at a time-share property enables vacationers to tion, with terms dependent on the purchase price and the enjoy a resort, year after year, for the duration of their owner- amount of the buyer’s down payment. The average cost of a ship for a one-time purchase price and the payment of yearly vacation ownership ranges from about $7,000 for a studio to maintenance fees. Time-share ownership offers vacationers an about $15,000 for a two bedroom unit. Yearly maintenance opportunity to save on the escalating costs of vacation accom-

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modations over the long term, while enjoying all the comforts of 10 percent within the next decade for households with incomes home in a resort setting. of more than $50,000. No wonder hotel companies have found Truly a home away from home, vacation ownership provides this to be a lucrative business. the space and flexibility to meet the needs of any size family or RCI, the largest vacation ownership exchange (allowing group. While most vacation ownership condominiums have members to exchange vacations with other locations), has two bedrooms and two baths, unit sizes range from studios to more than 3.7 million members. More than 4,000 participat- three or more bedrooms. Unlike hotel rooms, there are no ing resorts and members can exchange vacation intervals for charges for additional guests. Also unlike hotels, most units in- vacations at any participating resort.7 Vacation ownership is clude a fully equipped kitchen with dining area, washer and popular at U.S. resorts from Key West in Florida to Kona in dryer, stereo, DVD players, and more. Hawaii, and from New York City and Las Vegas to Colorado Time-share resort amenities rival those of other top-rated ski resorts. resort properties and may include swimming pools, tennis, Jacuzzi, golf, bicycles, and exercise facilities. Others feature boating, ski lifts, restaurants, and equestrian facilities. Most time-share resorts offer a full schedule of on-site or nearby Check Your Knowledge sporting, recreational, and social activities for adults and chil- 1. What is vacation ownership? dren. The resorts are staffed with well-trained hospitality pro- 2. What are the most frequent reasons for purchasing fessionals, and many offer concierge services for assistance in time-shares? visiting area attractions. 3. What characteristics do the following hotel The World Tourism Organization has called time-shares one segments encompass? of the fastest-growing sectors of the travel and tourism industry. a. City center hotels Hospitality companies are adding brand power to the concept b. Resort hotels with the participation of corporations such as Marriott Vacation c. Airport hotels Club International, the Walt Disney Company, Hilton Hotels, Hyatt d. Freeway hotels and motels Hotels, Promus’ Embassy Suites, Inter-Continental, and even e. Full-service hotels Four Seasons in an industry that has grown rapidly in recent f. Economy/budget hotels years. Still, only about 4 percent of all U.S. households own g. Extended-stay hotels vacation ownership. RCI estimates that the figure could rise to h. Bed and breakfast inns

BEST, BIGGEST, AND MOST UNUSUAL HOTELS LEARNING OUTCOME 4: Name some prestigious and AND CHAINS unusual hotels.

So which is the best hotel in the world? The answer may The Best Hotel Chains depend on whether you watch the Travel Channel or read polls taken by a business investment or travel magazine. The The Ritz-Carlton and the Canadian-owned and -operated Four Oriental Hotel in Bangkok, Thailand, has been rated number Seasons are generally rated the highest quality chain hotels. one in the world; so too has the Regent of Hong Kong, the The Ritz-Carlton Hotel Company has received all the major Lodging Mandarin Oriental of Hong Kong, and the Connaught of Lon- awards that the hospitality industry and leading consumer don. Each “list” includes different hotels. The largest hotel in organizations can bestow, including the Malcolm Baldrige the world is the Mecca Clock Tour, in Saudi Arabia, with 8,000 National Quality Award, from the United States Department of Commerce—the first and only hotel company to win the award, CHAPTER 4 rooms.

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