Course Information
HMGT 1101 / Section D500
Professor John Richard Akana
jakana@citytech.cuny.eduMeta
New York Times-
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The introduction to chapter 2, starts off by identifying what Franchising is. Franchising being in many ways a way expand a hotel business and trademark the brand of the hotel, started my the the Ritz Carlton in 1907. Also, the types of advantages and/or disadvantages franchising can do for someones business. Including more market recognition and keeping high enough standards for the brand. The chapter, Franchising will make owners and managers to make decisions to improve the brand as well, like creating advertisement, better staff training, management and more expertise, real estate is another option to invest and try to improve with business with shareholders. Another importance in the chapter is the types and locations of hotels as this can impact the type of revenue and business you are trying to run, many definitions are shown of the different variations. High class hotels from around the world are an example as well because of the location and services the make big hotel brand over other more known high class hotels like the Ritz Carlton. Lastly, international economy of the hotel branding, as well as the green economy the can improve our environment. Hotel development is part of every country with economic stability and sustainability can make it a better brand of hotels rise in countries around the world.
Hotel is the topic of this chapter and it explains about how hotels are managed, how they get classified, and impacts of them. Franchising in hotel industry began in 1907 by Ritz Carlton. The concept is to provide name value for franchisees’ and franchise grow based on their investment. Usual fees are 3~4 percent of room revenue. Both franchisee and franchisor benefit each other to be successful, but there are some downfalls on both sides as well. Since franchisors need franchisees to make money, they help new franchisees to settle by offering many support services. Therefore, many new entrepreneurs buy franchise to reduce risk of failure. Hotels are classified according to location, price, and types of service being provided. Instead of hotel, vacation ownership began to expand since 1960s. Lastly, eco-friendly, sustainability, or green-lodging, however it is called, is also important not only because it is good for nature, but it can reduce costing of energy.
This chapter explains what is franchising and how it helps the development of hotels. Franchising started in 1907 by the Ritz Carlton it describes how they use other people’s money to grow a company rather than fund it as well as the right to use trademarks for expansion. Franchising has its advantages such as national advertising, increase market share and recognition, participating in volume discounts, and listing in franchisors directory. Franchising also has its disadvantages such as high fees, difficulty maintaining standards and controls, and conformity. The franchisor may extend support to the franchisee by offering construction plans, assistance with financing etc. which lower the chance of failure. This chapter also talks about how the development of a hotel is based on how it looks as well as its location. Hotels are also classified by price, types of service offered and types of hotel weather it’s a casino or a resort. Hotels can also save money by using local materials as well as incorporating natural lighting, darkened glass and lower wattage lighting in the construction to save energy.
Chapter 2 was all about the hotel business. It talks about franchising and management.
It all started with the Ritz Carlton in 1907 they used the franchise platform to rapidly expand businesses. There are many pros and cons to this platform but many hotels try to do this. Chapter two also talks about the management contracts which has been around since the 1970’s this was responsible for the hotel industry rapid boom.
From there is explains the different hotel developments investments, economic impacts.
This is good to know especially when beginning at a hotel or when opening a new hotel.
To sum it up this chapter goes on to discussing the different reasons people travel and stay at hotels. For example, resorts, casinos, city centers, conventions etc. It’s helpful to understand the reasons why hotels are built. It is also good to understand why there are different hotels for different people. This is the perfect chapter to understand the hotel market.
Chapter 2 introduces the terms franchising and management contracts. These terms are new to me and the chapter was rather informative for those who would like a career in hotel management. The chapter describes the types of hotels, and how hotels play a big part of a countries economic growth. Franchises would benefit the young entrepreneur or even those looking into the business as a whole which is in fact very profitable. Franchising is a better way of establishing new hotels rather than financing. However franchising comes with its flaws, under adjustments can alter the cost and fees of the hotel. Hotels are rapidly changing, some even closing their doors for good due to the rapid change and trends within the industry, making this business; profitable.
I liked chapter 2 only because it emphasized more on the business part of hotels and elaborated on franchising, refferal associations and management contracts. Last semester i took the 1105 course and we went over the definitions but in this chapter but this chapter provided better explanations. Although I am stuck on one that that was not very clear to me. One of the cons of being a franchisee was that the Central Reservation System (CRS) accounts for 7-26% of reservations? What does that mean? The central Reservation System is where all hotels under the the franchise can interact with one another and send information to a central where it keeps track of availablity and costs of rooms in certain places and a person can tap into this information when they make a reservation via internet. So how is it only 7-26%? Do people mostly call to make a reservation?
This chapter also went through the classifications of hotels. There are all types of classifications that suit the consumers such as extended stays, business, or quick and very limited service highway motel.
I have a question that I wish I could ask in class today and it is about the AAA Diamond Award section under the Classification of Hotels slides, is AAA considered a refferal association?
This chapter had a lot of profiles too of Hotel Entrepreneurs like Conrad Hilton and I always find these interestings.
This chapter was brief on International Persepectives and the effects that hotels have to the area that a hotel is located in. It went over popularity of hotels around the world and sustainable or green lodging. I think it is great that developers are more green conscience and building hotels with darkened glass, lower wattage lighting and having natural lighting.
Chapter 2 explores the idea of franchising. Franchising has its benefits and its drawbacks, a benefit is that a franchise is already established therefore the mistakes that one would make with a business is decreased while a drawback is that franchising creates conformity.
Management contracts has been the driving force in the rapid creation of hotels. Brands such as Marriott or Sheridan leases out their name. The hotel company manages the property for five or more years. The company receives a management fee (2-4.5%) for the lease of the name. When a franchisee is under the umbrella of the “brand” this allows them to gain access to perks within the brand such as the central reservation system, training and seminars and referrals from other hotels within the brand to name a few.
Hotels provide a direct and indirect impact to the communities in which they are located. A ripple effect is that money is spent in the community by the employees
this could be going to the local grocery store, deli, diner, fitness club etc. The main point is that the money is recirculated back into the local community. Additionally, the communities where the hotel is located benefit from the Transient Occupancy Tax (TOT) also known as the bed tax.
Hotels are classified using the AAA standard of classification. This is done in the Americas, Caribbean and Mexico. Less than 2% of hotels classified are rated as diamond level. Many of the world’s best hotels are located in Asia.
Chapter 2 is about how franchising and hotel management is involved in the industry, and how effective in the future. Further back of the chapter shows about Management of hotels. The idea of franchising began in 1907 by Ritz Carlton. The purpose for franchising is to expand business, which means to earn more profits, meanwhile given out the opportunity to use trademarks; operating procedures. It has many benefits for businesses, but at the same time it could’ve some drawbacks such as high fees. Franchisor often involve with advertising, marketing and cash flow. Decisions are made by owners which lowers the chance of business failure. Hotel classification are based on the price; location and types of services provide. The most successful chain hotel is the Ritz-Carlton. Other than resorts and motels there are many unusual hotels such as treetop; ice hotels and underwater hotels. Hotel management is one of the major part of global economy as well as developing some of the countries and supports the stability of political.
Alison McGovern
Chapter 2 Summary
Chapter 2 starts by introducing us to the meaning of franchising, its benefits and drawbacks, as well as the pros and cons of franchising for the franchisor or the franchise company. We also learn about referral associations and its benefits to properties, which are similar to that of franchising.
In this chapter, we learn about the benefits of management contracts, which were responsible for the rapid boom in the hotel industry in the 1970s.
Chapter 2 talks about hotel development in terms of investment and profit and its effect on the global economy. We learn about the positive economic impact hotels and resorts have on the communities surrounding them, as well as the beneficial impacts hotel development has on developing countries around the world.
We learn about the classification of hotels and the AAA Diamond Award used to inspect and rate them, as well as the types and locations of hotels, including but not limited to resorts, airport hotels, bed and breakfasts, casino hotels, economy hotels, boutiques, timeshares, and sustainable or green hotels, and what each one offers.
Chapter 2 is about franchising in hotel industry. First of all it introduces franchising and management contracts are the two main driving forces in the development and operation of the hotel business. It began by Ritz Carlton in 1907. Even though it has many benefit, it still has some disadvantages, such as high fees, central reservation system accounts for about 7–26% of reservations, conformity and must maintain standards. Then it talk about the hotel development which is also means the investment. Management echelon determines a hotel’s process. Hotel are divided by types and location of hotel. The Ritz-Carlton and the Four Seasons are generally rated the highest quality chain hotels. At the end of chapter it introduce vacation ownership, international perspective and green lodging which are the new study trends of the industry.
Chapter 2 (The Hotel Business) describes the many variations of the hotel industry. It informs us about the benefits, drawbacks and history of franchising. The pros of franchising consist of increased market share and recognition and up-front fees. The cons of franchising consist of careful in selection of franchises and difficulty maintaining standards and controls. The chapter also is making franchising an option for us in the near future, explaining why and how it would benefit us. It also explains referral associations, management contracts and real estate investment trusts and why hotels may be interested in it. Hotel development is built by a business venture by a developer, a feasibility study is done to assess the viability of the project. The economic impact of hotels makes the hotel industry a positive impact in communities all around the world. The U.S. lodging industry consists of 50,800 hotels and motels, hotels may be classified as to location, price, and type of services offered. The types and locations of hotels will always have a distinct target market, they will always target the corporate market for a corporate hotel and a big family for a resort hotel for example. The chapter also provides an example of the best, biggest and most unusual hotels and chains around the world. The fastest growing segment of U.S. travel and tourism industry is vacation ownership, or as we like to call it, timeshare. For a one-time purchase price and payment of a yearly maintenance fee, purchasers own their vacation either in perpetuity (forever) or for a predetermined number of years. After political stability is met in developing countries, hotel development follows as a sign of economic and social progression. The international perspective of the hotel industry is as strong as ever before.
chapter 2 talks about the franchising and management contracts. The franchising began in 1907 and is use to other’s money to expand the business. The benefits of the franchising is increasing the market share and recognition. Also, it has high fees in drawbacks. There are several hotels within the United States and international that are involved with having management contracts and hotel chains. Since 70’s offering operational expertise and the management of the property for a certain period of time including years. The last thing is about vacation ownerships are providing a yearly payment for a vacation property, it can be owned for several years for permanently.
Chapter 2 is about the hotel business. An example of franchising is The Ritz Carlton. They began a concept that allows a company to use other peoples’ money for growth rather than financing. Franchising is used to rapidly expand businesses. There are benefits and drawbacks to the franchisee. Some benefits are, standard set of plans, national advertising, lowering fee percentages charged by credit card companies and the drawbacks are, high fees, conformity, and etc. Franchising can also involve us as an individual because we can work directly for franchisor, work in a franchisor – owned unit, work for a franchisee, or possibly own a franchise ourselves! Important factors in becoming a franchisor is understanding referral associations, management contracts, real estate investment trust, and knowing hotel development.
Since I already did chapter 2, as confusing of the chapters I finally caught up to chapter 9. So far chapter 9 is my most favorite since I am really interested in the tourism industry. So basically chapter 9 explains exactly what tourism is and the impact it has had in the world. There has been an agreement among nations to be open all year around. this chapter also explains all the time ages of all methods of transportation the Pre-Industrial (prior to 1840), The railway age, The automobile age, The jet aircraft age,The Cruise ship age. which basically is all existed ways of ways to travel. Importantly technology is the real key to hold up this ways of tourism. Then there is the ways of transportation that is available for sale for travelers, like for example air planes, buses, hubs, etc. And finally it speaks about the expenses of the tourism industry and sustainable tourism that refers to the environmental, economic, and sociocultural aspects of tourism development.
Chapter 2 introduces to us the terms franchising and management contracts. The chapter was very informative and describes the types of hotels, and how hotels play a big part of a countries economic growth. The benefits of the franchising is increasing the market share and recognition but the cost of advertisements is a huge setback. Advertising is very important so people all around the world will be reminded that your company still exists or if you are marketing something new. Franchising is a superior way of founding new hotels rather than financing. However franchising comes with its mistakes, under changes can alter the prices of the hotel. Hotels are rapidly changing, some even closing their doors for good due to the swift changes and trends within the industry. Making this industry one of the most profitable and efficient.