Zhigang  Gao [Gina]                                        HMGT 1101 draft:  Chapter2 summary

10/6/15                                                             Prof. Damien Duchamp

Chapter two focuses on discuss the advantages and disadvantages of each type of hotel. Also focuses on hotel development and ownership.

1. Capital intensive def: A business process or an industry that requires large amounts of money and other financial resources to produce a good or service. My example: cranes are capital intensive industry and operation cost, their management is becoming more and more important.
2. Fair return on investment- def: the return that conforms to the rate of similar investments and reflects a fair payment for property. My example: I put twenty- thousands in a shipping company to share the profit. After one year I got thirty- thousands.
3. Feasibility study- def: is a process that defines exactly what a project is and what strategic issues need to be considered to assess its feasibility, or likelihood of succeeding. My example: Before I run a new business I used do feasibility study with my partner.
4. Direct economic impact- def: is a measure of the total amount of additional expenditure within a defined geographical area, which can be directly attributed to staging an event. My example: people’s minimum wages low is the direct economic impact for vacation industry.
5. Indirect economic impact- My example: RMB depreciation indirect economic impact Chinese tourist number went to the United States.
6. Franchising- is the practice of the right to use a firm’s business model and brand for a prescribed period of time.  My example: my friend got franchising of crown bake store which is a chain store, they require all the store have to obey same rule and decorations.
7. Management contracts – is an arrangement under which operational control of an enterprise is vested by contract in a separate enterprise that performs the necessary managerial functions in return for a fee. My example: A hotel management contract details the agreement between the owner of a hotel and its operating company.
8. Real estate investment trusts (REITs) – def: A REIT is a type of security that invests in real estate through propertyor mortgages and often trades on major exchanges like a stock. My example: REITs have become available in many countries outside the United States on every continent on Earth.
9. Referral associations – My example: Hotels and motels within a referral association generally share some sort of centralized reservation system and common image such as a logo or advertising
10. Vacation ownership-My example: vacation ownership benefit for hotel and consumers. Because hotel collected the money they need and consumers save a lot of money.