Chapter 2 (due 10/5)

19 Responses to Chapter 2 (due 10/5)

  1. Moonchen says:

    Date: 9/22
    Course: Perspective of Hospitality Management
    Yueman Chen (Moon)
    Summary of Chapter 2

    Chapter 2 introduces two main ways to manage and operate a hotel business, one is franchising and one is management contract. The franchising is granted the right to use trademarks operatizing procedures and other business procedures. The benefits of operating a hotel as franchising are national advertising, corporate set plans and business strategies, and lower fee percentage charged by credit card companies.

    However, there are some cons operating a franchising hotel. Such as keeping to maintain standards controls, and also paying the high fee. Management contracts means operate your hotel with a management team. Which mean they provide operation expertise, marketing, and sales clout. The management team will take care of everything and business owner will pay a high percentage of the management fee.

    Real Estate investment trusts is an easier way to get into the hotel business. The economic impacts of hotels are employments and community development. Local people will get more job opportunities and the communities also benefits from the transient occupancy tax. There are several types and locations for hotels, such as city center, resort, airport, freeway hotel and motel, casino and convention, etc. There is also full service, economy/budget, boutique, extension-stay hotel, condo and mix-use hotels, bed &breakfast, and green hotels. Hotels are also classified into best, biggest or most unusual hotel and chains.

  2. Kaitlynn says:

    Kaitlynn Reyes
    Perspective of hospitality management
    Prof. A

    Chapter 2

    In chapter 2 it talks about the franchising and the management which are two driving points in development and operations in the hotel business. First it talked about franchising itself which all started in 1907 by Ritz Carlton. Franchising is when a company to use other people’s’ money for growth rather than financing which means that is it mostly to rapidly expanded a business. The franchisee is granted the rights to use trademarks, operating procedures, and other business procedures meaning then can use anything from the business. Some benefit are standard set of plans, national advertising, Centralized reservation system,participation in volume discounts, listing in franchisor’s directory, lower fee percentage charged by credit card companies. Some drawbacks are high fees, central reservation system accounts for about 7–26% of reservations, conformity, must maintain standards. Secondly, it talks about management contracts which is responsible for the hotel business to grow rapidly in the 1970s. It had little to no up front financing. The investors do not pay any corporate tax instead they give 95% to shareholders. So it is basically trading stocks. In the hotel business there is an indirect and direct economic impact. The indirect is where the employees come from who run the hotel business and take care of anything. Also the money to purchase things that the guest will need in there stay at the hotel. Some types of hotels and locations are city center , resort, airport, freeway hotel and motels, casino, convention, full service, economy/budget, extended stay hotels and all suites extended stay hotels, condotels and mixed use hotels, and bed and breakfast inns. There are a total of 50,800 hotels and motels in the US.

  3. For a hotel business to function, it requires driving forces such as Franchising and Management Contracts. Franchising is used to expand any business in a shorter amount of time. Franchising allows a certain company to use other people’s money for growth than financing. Franchising also offers benefits for the company and the franchisee; franchising offers many job opportunities. An experienced franchisor can provide a safe-proof support services to accommodate the franchisee in order to create a productive product of franchise. Referral Associations offer similar benefits as franchising but offers it with a lower cost. RAs are independent hotels working together in order to thrive in industry. Management Contracts provide financial assurance and security. It provides allowance for the financial of the business to expand and grow within a certain amount of time period. Real Estate Investment Trusts are when shareholders get most of the net income that investors are required to distribute, while the investors do not pay corporate income tax. REITs are usually traded as stocks, and much easier to get into (or out of) than limited partnerships or the direct ownership of properties. Hotel developments can also be considered business ventures when the developer expects to make a reasonable return on this substantial investment. Hotel developments are usually tested using the feasibility study to see if the development can have the capacity to operate or be sustained.

  4. Chapter 2 Summary

    For a hotel business to function, it requires driving forces such as Franchising and Management Contracts. Franchising is used to expand any business in a shorter amount of time. Franchising allows a certain company to use other people’s money for growth than financing. Franchising also offers benefits for the company and the franchisee; franchising offers many job opportunities. An experienced franchisor can provide a safe-proof support services to accommodate the franchisee in order to create a productive product of franchise. Referral Associations offer similar benefits as franchising but offers it with a lower cost. RAs are independent hotels working together in order to thrive in industry. Management Contracts provide financial assurance and security. It provides allowance for the financial of the business to expand and grow within a certain amount of time period. Real Estate Investment Trusts are when shareholders get most of the net income that investors are required to distribute, while the investors do not pay corporate income tax. REITs are usually traded as stocks, and much easier to get into (or out of) than limited partnerships or the direct ownership of properties. Hotel developments can also be considered business ventures when the developer expects to make a reasonable return on this substantial investment. Hotel developments are usually tested using the feasibility study to see if the development can have the capacity to operate or be sustained.

  5. Victoria Liao
    Professor John Akana
    HGMT 1101
    September 27,2017

    Chapter 2 Summary
    In chapter 2, it talks about franchising and management. The term franchising began in 1907 by the hotel Ritz-Carlton. Pros and cons of owning a franchise are that it can increase the market share but the cons are that there is careful selection of the franchises and has difficulty in maintaining the standards that is expected of the company. There are different types of classifications for hotels. Some are full-service, economy/budget, boutique, and etc. The most popular hotels are Oriental Hotel in Bangkok, Thailand, and Mandarin Oriental in Hong Kong. Ritz Carlton and Four Seasons are rated the highest in quality as a hotel chain. Vacation Ownership is the fastest growing segment of the U.S. travel and tourism industry. There could be a one-time purchase price and payment of yearly maintenance fee. The average cost is between $ 14,800 and 18,500.

  6. Fyaad Nazim says:

    Fyaad Nazim

    Chapter 2

    Perspective in hospitality management

    Prof. Akana

    Franchising, its more then a distribution of property following a certain pattern. Its an idea for allowing companies to spread its growth using other people’s money. It first started back in 1907 by Ritz Carlton. Like most other things franchising does have there positives and negatives. Some positives consist of standard set of plans, national advertisement, Centralized reservation system, etc. On the other hand they are high fees, Conformity, and must maintain standards. Most owners for hotels has a contract with a management company, were there in charge of running the hotel. Contracts are signed allowing companies to run the hotel for a certain amount of years. Economies usually have huge impacts on hotels and where they’re located. If it’s a high populated area business will likely have a better flow then a small populated area. The US lodging industry consist of 50,800 hotels and motels and are rated by triple AAA. Vacation ownerships began in the late 1960s and now happens to be the fastest growing field in the hospitality and tourism industry. Just like us who wouldn’t want to save, hotels can save money by using local materials, and build smarter using things like darkened glass and low wattage lightnings causing them to be more energy efficient.

  7. yanira says:

    Yanira Vega
    Citytech
    HMGT 1101
    Prof. Akana
    Chapter 2 Review

    In this chapter we learn about the difference between franchises and management contracts, the pros and cons about each. We also read About the different types and locations of hotels. It briefly touches the subject of Vacation Ownership (time shares).

    The hotel/ tourism industry has two very good options, Franchising and Management Contracts. Franchising allows a company to use other peoples money in order to grow rather then going to the bank and getting a loan. In return the franchisee( person starting the business) is allowed to use trademarks, operating procedures and other business plan already established by the company. This has its pros and cons. Some pros are that the business plan is already in place by the company and also you don’t need to worry about your advertising. Since many of the problems of opening a new business have already been dealt with by the company,the risk of failure is greatly reduced.On the other hand this comes with very high fees and you need to follow someone else standards rather then your own.

    There are many different types of hotels and they are located all over the country/world.You have City center hotels(usually used by the traveling public), Resorts( fully equip t with many amenities), Casinos, Airport hotels etc.
    You can get different kinds of service from each of these hotels. You have full- service,Economy, and Boutique. There is a little something for everybody when it comes to the hotel business. You are able to go from the most economic hotels to the most extravagant expensive hotel in the world in a bling of an eye.

  8. Amos wescott says:

    In the hospitality industry there is two main branches that see in the development and operation of the hotel. Those two branches are franchising and management contracts. Franchising began in 1907 by The Ritz Carlton. Franchising is used to promote businesses. The franchisee is granted rights to use trademarks and operating procedures. The fees for lodging is from 3-4% of room revenue. The pros of franchising is an increased market share and recognition for the hotel and up-front fees. The con to franchising is the difficulty in maintaining the standards of the hotel. Management contracts are responsible for the hotel industry’s rapid boom since the 1970s. it requires little or no up-front financing or equity involved. The hotel gets to manage the property for a period of 5,10,or 20 years. There are many hotels in the world and they all have something different to offer when it comes to service. One example would be a conhotel and mixed used hotels, this is a combination of a hotel and condominium. Hotel may also have residences. The oriental hotel in Bangkok, Thailand has been rated #1 in the world. The Ritz-Carlton and four seasons are rated the highest quality chain hotels.

  9. Chris Raghubir
    HMGT 1101
    Prof., Akana

    Franchising and management contracts are the two main driving forces in the development and operation of the hotel business. Began in 1907 by The Ritz Carlton, a concept that allows a company to use other people money for growth rather than financing. Franchising and management contracts are the two main driving forces in the development and operation of the hotel business. Pros and cons of owning a franchise are that it can increase the market share but the cons are that there is careful selection of the franchises and has difficulty in maintaining the standards that is expected of the company. benefits to the franchisee, standard set of plans, national advertising, centralized reservation system, participation in volume discounts, listing in franchisor’s directory, and Lower fee percentage charged by credit card companies. There can also be some drawbacks to franchising which are, high fees, central reservation system accounts for about 7–26% of reservations, conformity, and must maintain standards. Many mistakes made by new entrepreneurs have already been overcome by the franchisor. The Franchisor offers many support services often including cash flow, marketing and advertising, site selection, construction plans, and assistance with financing. This leads to a key reason to buying a franchise, reducing your risk of failure. Responsible for the hotel industry’s rapid boom since the 1970s. Little or no up-front financing or equity involved. Provides operational expertise, marketing, and sales clout, often in the form of a centralized reservation system (CRS). Allows the hotel company to manage the property for a period of 5, 10, or 20 years. The company receives a management fee (a percent of gross and/or net operating profit—usually 2–4.5% of gross revenues).

  10. Yanibel Medina
    10/02/2017
    HMGT 1101

    Chapter 2

    Franchising and management contracts are the main forces in the development of the hotel business. Franchising began in 1907 by The Ritz Carlton and it allows a company to use other peoples’ money for growth. It is usually used to rapidly expand business. Franchising has a lot of benefits like national advertising but it also has a lot of setbacks like high fees. Referral associations are similar to franchises but at a lower cost. Management contracts are responsible for the hotel industry rapid boom since the 1970’s (PP 9). I learned that hotels provice direct and indirect economic impact to the communities in which they are located. The U.S. lodging industry consists of 50,800 hotels and motels. There’s different types of hotels and location, for example City Centers hotels meet the needs of the traveling public for business or leisure reasons. Vacation ownership began in the late 1960’s, and the average cost is $14,800 and $18,500. I learned that by using local materials, a new hotel can save so much money.

  11. Karasudani says:

    Chapter 2 Summary
    By: Kazuyoshi Karasudani

    Franchising and management contracts are the two main driving forces in the development and operation of the hotel business. Franchising began in 1907 and was first undertaken by the Ritz-Carlton. Franchising is a concept that allows a company to use other peoples’ money for growth rather than financing, and is used to rapidly expand. The advantages of franchising include increased market share and recognition, while disadvantages include the need to carefully select franchisees and the difficulty of maintaining standards and controls. Management contracts provide operational expertise, marketing and sales clout, often in the form of centralized reservation system (CRS). Management contracts allow the hotel company to manage the property for a period of five, ten, or twenty years, while the contracted company receives a management fee.

    Hotels provide substantial direct and indirect economic impact to the communities in which they are located. Hotels may be classified as to location, price and the type of services offered. In 1977 AAA Diamond Award started inspecting and rating the nation’s hotels. There are various types and locations of hotels, including City Center: meets the needs of the traveling public for business or leisure reason; Resort: inclusive and diversified in accommodations; Convention: provides facilities and meets the needs of groups attending and holding conventions, and more. Besides location, there are several categories of standard services. For instance, Full-Service hotels provide a wide range of facilities, services, and amenities, Economy/Budget hotels provide reasonably-sized, furnished rooms without frills, and Boutique hotels offer unique architecture, style and decor, but tend to offer rooms smaller in size.

  12. Nicaury Espinal
    HMGT 1101
    10/04/17
    Chapter 2 summary

    This chapter starts by introducing the concept of franchising and how some companies may use that to expand their business. It continues to explain the pros and cons of franchising which are, pros, an increase in the shared market and up front fees, and the cons are that you have to be careful in the selection of franchisees and it is very difficult to maintain standards and controls. After the pros and cons, it explains how franchising could be involved in our future, telling us how franchisors offer a lot of support services that may include cash, marketing and advertising, site selection, construction plans, and assistance with financing. It goes on to say that there are benefits to owning a franchise which including a lower cost, centralized reservation systems and a common image image, logo, or advertising slogan. Then the subject is changed by explaining the development of hotels throughout history and the economic impact of hotels. The hotels are classified in different industries that consist of 50,800 hotels and motels, and are awarded a grade known as the AAA Diamonds, which started around 1977. Only around 2% of hotels have gotten 5 diamonds which is the highest rating possible, the hotels evaluated annually are in the United States, Canada, Mexico, and the Caribbean. After that, it consist of the types and locations of different hotels such as resorts, airports, casinos, inns etc. The best and biggest hotels and chains are The Oriental Hotels, The Ritz-Carlton, and the Four Seasons Hotels. These hotels have the highest ratings quality chain of hotels. To finish off it tells us the vacation ownerships that are available and the international impact and perspective on the different hotels and how they affect all of these different place economically.

  13. Danielle says:

    Danielle Sheridan
    Chapter 2 summary
    Franchising is one of the main driving forces in developing and operating a hotel business, the franchising concept was first brought by The Ritz Carlton in 1907. The other driving force are management contracts, in which the hotel owner contacts a separate company or person to run the hotel. Management contracts are the reason why the hotel industry has skyrocketed since the 1970s. Hotels are often classified by their location, price and types of services offered. Vacation ownership started in the French Alps during the late 1960s, it allows consumers to rent or buy a vacation home and have it maintained while they are gone, certain dates might not be allowed in. It does not take much to have a new eco-friendly hotel that is energy efficient which in turns is more cost efficient; as well as supporting the local community when goods and materials are bought locally and it also reduces their carbon footprint and transportation costs.

  14. robin says:

    Robin Singh
    Prof. Akana
    4th October 2017
    Chapter 2 summary
    This chapter introduces two main concepts which are Franchising and management. These two contracts are the two main driving forces in the development and operation of the hotel business. Franchising was started by a man named by Ritz Carlton and its main purpose was to allow a company to use other peoples’ money for growth rather than financing. Financing is used to expand businesses. There are many benefits of Financing which includes charged fees by credit companies, standard sets of plans, central reservation system etc. however, there are also a couple of cons that you would have to be very careful while using this concept. Those cons are that it is difficulty maintaining standards and controls and you must be careful in selections of franchises. Management contract is a bit different than franchising. Management contract is responsible for the hotel industry’s rapid success since the 1970s. This concept Provides active expertise, marketing, and sales clout, often in the form of a centralized reservation system and Allows the hotel company to manage the property for a period of 5, 10, or 20 years which benefits the companies if used correctly. Also, the tax rates are low. The rest of the chapter talks about the impacts of hotels on the economy.

  15. Bryan Caba says:

    Chapter 2 discusses two ways to operate hotels within’ the hospitality industry. One way is through Management contract; which has been successful since the 70s. Management contract provides hotels with marketing and sales clout. This allows hotels to control property for at least 20 years and this concept benefits hotel companies that know what they’re doing.Another concept is Franchising.Which was started by Ritz Carlton. The point of franchising was to use it as alternative.In other words, instead of financing you can use people’s money to help improve your hotel company.

  16. Tania says:

    Tania Garcia
    10/4/17
    Chapter 2 Summary

    In this chapter we speak about franchising and management working together to develop the hotel industry. Franchising began in 1907 by The Ritz Carlton; this concept allows other people’s money be used to build and expand a company. Just like any other topic franchising has it’s pros and cons. A few of its pro’s to the franchisee is it already has national advertising, has a standard set of plans, lower fee percentage charged by credit card companies and etc. A few drawbacks is the high fees, high standards must be maintained, central reservation system accounts for about 7-26% of reservation and etc. While the franchisee might face some complications the company franchise also faces complications such as difficulty in maintaining standards and controls and must carefully select franchisee; yet this concept can bring them an increase in the market share and recognition and up-front fees. Management contracts have been the source of the hotel’s industry’s growth since the 1970’s. These management contracts cans all the hotel company to manage the property for up to 20 years and can help them receive a management fee of 2-4.5% of gross revenue. Real estate investment trusts allow the investors to not pay corporate tax but have to give 95% of their net income to shareholders. They are also easier to get into than limited partnerships or direct ownership. Going back to hotels they’re many classification of hotels ranging from airport hotels to resort hotels; each hotel providing a different type of service to the guest and targeting different customers. These hotels can have a direct and indirect impact in their communities economy.

  17. Lisa Torres says:

    Lisa Torres
    10/7/2017
    Perspectives in Hospitality
    Chapter 2 summary

    Chapter 2 talks mainly about two main driving forces in the development and operation of the hotel business. Those two driving forces are franchising and management contracts. Franchising began in 1907 by the Ritz Carlton. It is used to rapidly expand businesses. There are pros and cons for franchising. Management contracting provides operational expertise, marketing, and sales clout, often in the form of a centralized reservation system (CRS). This allows the hotel stay in business for 5-20 years. When looking for a hotel to stay in, people often have 3 main priorities. The hotels location, price, and services offered are peoples priorities. U.S. lodging industry consists of 50,800 hotels and motels.

  18. This chapter talks about management contracts and franchises. In the hotel business it is better to pick the management contracts, you are hiring professionals to run your hotel, they will improve your business and the sales. Franchise help also your business expanding, by opening your business in other countries, making it worldwide. Your brand will be known all over world. On the other hand, franchises are harder to control, you never know who is the franchisee, which would ruin the reputation of your
    business .

  19. In chapter 2 “The hotel business” we learn of franchising, hotel development, classifications of hotels, and how the location of a hotel plays a big part in what type of hotel it’s categorized as. Franchising and management contracts are the two main driving forces in the development and operation of the hotel business and began in 1907 by the Ritz Carlton. A concept that allows a company to use other peoples’ money for growth all while rapidly expanding businesses. types of hotels include city center, resort, airport, freeway hotel/motel, casino, convention, Full-Service, economy, boutique, extended stay, condotels, and bed & breakfast inns.

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