HOSPITALITY NOTES 2 CHAPTER 7 Owners primary interest is cash flow also want to see capital investments increase There is a recent shift of power much more power with negotiation o Usually an investment company o Buys the real estate o Then builds a lodging or restaurant property on the land o Then hires a different company operator to run the property Operator has the ability to grow increase market share and presence o Want long term contracts with long term stability Long term focus o Less ability to negotiate o Management fees for full service hotel o Contract vs Chain Chain operators are affiliated with major hotel chains Examples Marriott Starwood Hilton There have been many mergers between chain brands which has created mega brands Independent contractors are not affiliated with any specific brand They purchase brands and locations based on their assessment for compatibility with their objectives Lender make sure the money is utilized well o There is an increase in lender involvement Contract negotiation there is an increase in ability to negotiate With all contracts each provision is negotiated o There is a yearly evaluation o Incentive fees are based on cash flow after debt service or return on equity The better the management does the higher the incentive fee o Grace period Hotel first opens 1 2 years where performance criteria can be changed New operator in existing property 6 months o Contract Fees Chain operators 2 25 of gross revenues without operator equity 2 50 of gross revenues with operator equity Independent contractors 1 5 of gross revenues without operator equity contribution contribution contribution 2 5 of gross revenues with operator equity contribution On site food service management company o Top three 1 Sodexho Alliance a Largest on site foodservice management company b Based in France 2 Compass Group a Based in Britain 3 ARAMARK Services Inc a Based in U S Healthcare Segment o Most challenging segment of the on site foodservice industry Recreation and Leisure Segment o Fastest growing segment of this industry CHAPTER 8 Industry Association A professional organization that provides o Member training and education o Opportunities for networking o Member recognition and support o Promotion of specific industries to the public o Legislative updates o Industry trends and updates You can find relevant Associations in the Encyclopedia of Associations National Restaurant Association o Periodicals trends and more o Largest restaurant trade show o Held each May in Chicago American Automobile Association AAA o Uses a classification that awards diamonds o Five diamond award is highest award o Less than of one percent receive the five diamond rating each year CHAPTER 9 o Levels of management 1 Top management 2 Middle Management 3 Supervisory Management o Nonverbal Communication 70 of communication is nonverbal o Leadership requires training and development o Personal and human experience o Both an art and a science o Is subjective o Is active o Is interactive o With group and situation o Organizational success o Requires a leader to have many qualities o Vision is likely the most important o Why people follow the leader o Many reasons most basic is job security to be able to provide for themselves and their family o Positive work environment is most effective o Effective leaders often display their passion for the industry o Successful leader demonstrates a quality that followers want to o Effective leader instills a desire to follow in the same right direction o Enthusiasm for industry o Leadership Qualities emulate o Three dynamics of leadership 1 Leader 2 Group being lead 3 Situation the leadership is required for o The Service Vision o All service has a vision connected with it o Vision basically comes from the customer for the most part o Types of skills need for a successful Operations Manager o Technical Skills Having the knowledge of and ability to perform a particular job or task o Judgment Ability to make sound and wise decisions o Conceptual Skills Understanding of the whole and how different parts work together o Interpersonal Skills Ability to lead motivate and communicate well with those around them Is key need to know how to work with others o Integrity and a Sense of Ethics Ensures Truth Lack of bias Consistency Respect when interacting with others o Operational managers are responsible for the ethical treatment of 5 different groups of people 1 Customers 2 Employees 3 Suppliers 4 Owners 5 Community at large o Implementing Management Functions and services o Planning Service Primary management function o Organizing Service o Staffing Service o Controlling Service o Requirements Skill sets for management o Knowing what motivated people o Importance of language and different ethnicities o The company mission need to understand and ensure you are on the right track for the mission CHAPTER 10 o Marketing is o A carefully designed strategy composed of marketing inducements intended to create and retain profitable customers o A customer relationship development process that is influenced by everyone in the organization o A process that must be actively managed often by those assigned full time marketing and sales responsibilities o Organizational Goals o Make profit o Bring supply and demand together o Product success is ultimately determined by the customer o The marketing mix consists of 4 components 1 Product 2 Place 3 Price 4 Promotion o Packaging and bundling combining products for cheaper prices o Ex Staying three nights at Universal and get a discounted park ticket o Hospitality Marketing system o Directly Personal interactions Technologies such as the internet o Indirectly Wholesale intermediaries who might sell to retail travel agencies who then sell to the final customer o Impersonally Marketing promotional tools Advertising Public relations o Key concepts of marketing o Carefully developed strategy o Short term long term results that are measurable o Has to be actively managed o Common Hospitality segments o Business traveler biggest segment in lodging with an average stay of 3 nights o Pleasure traveler o Individual traveler o Leisure traveler o Group travelers o How to market to the different segments o Market to groups via sales force o Individuals use advertising o For business travelers market to the businesses that provide those o Marketing and sales professionals as demand creators must master their skills in market research
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