DON HONORIO VENTURA STATE UNIVERSITY

Cabambangan, Villa de Bacolor 2001, Pampanga, Philippines

Tel. No. (6345) 458 0021; Fax (6345) 458 0021 Local 211

COLLEGE OF HOSPITALITY AND TOURISM MANAGEMENT

CHAPTER 1 4. Franchised

HOTELS – PAST and PRESENT  They are independently owned hotels that
affiliate themselves with a chain.
LODGING MANAGEMENT ASSOCIATION
 Franchisee – pays a franchise fee to the
Overview chain & Franchiser – in exchange for the
 The present state of the hotel industry is as broad as rights to use the name
it ever was in the past.  They also benefits from national marketing
 Variations of design, structure & operation are campaigns.
immense.  The chain provides SOP & other
 It is important to understand its basic hotel’s administration guidelines so that a
ownership & how that structure is related to hotel’s consistent level of quality & service is
ownership arrangement. maintained

Lodging Management Associations Centralized Reservation System (CRS)

The relationship between ownership and management • provides the consumer with an avenue to locate a
 Owner-operated hotel of choice in a certain location.

 Owner-managed • They provide toll free telephone numbers to

encourage travelers to
 Independent use their facility.

 Franchised • It can generate significant

demand for a hotel through
 Management contract brand loyalty.

5. Management Contract
1. Owner-operated  Agreement between investors or owners of
a project, and a management
A hotel run by an owner and the owners family.
company hired for coordinating and
2. Owner-managed overseeing a contract.

 Hotels are those where the owner has hired  The chain maintains a high level of control
additional (nonfamily) personnel to help run as the chain operates the hotel on the
the property. Owners behalf.

 The overall management remains with the Revenue Source

owner, but day-to-day operations can be in
 Is the result of a product or service a hotel makes
the other hands.
available to guest for a price. The size and scope of
 Not Chain Affiliated these sources can differ greatly from hotel to hotel.

3. Independent

 Are not chain affiliated

 They are responsible to the owner for the

hotel’s performance. (Group of Managers)
they are responsible to the owner for the
hotel’s performance

 The owner has no role in management or

day to day operation.

 It eliminates any potential conflict of interest

 DON HONORIO VENTURA STATE UNIVERSITY
Cabambangan, Villa de Bacolor 2001, Pampanga, Philippines
Tel. No. (6345) 458 0021; Fax (6345) 458 0021 Local 211
COLLEGE OF HOSPITALITY AND TOURISM MANAGEMENT
Three Main Revenue Source
1. Sleeping Rooms
2. Meeting / Function Space
3. Outlets / Ancillary revenue sources
A. Sleeping Rooms
 Is traditionally the main product of any hotel. A
hotel’s primary purpose is to provide
accommodation.
 Room rate- the price of each room.
 Occupancy – is the measurement of how many
rooms are sold each night versus how many rooms
the hotel has available to sell.
B. Meeting / Function Space
Group Function
 Can be a meeting meal, dance, exposition
or any gathering of more than one person.
REVENUE SOURCES
Revenue sources
a. Selling the space for a specified period.
The proceeds from the renting of these
rooms is called room rental.
b. Providing the food and beverage service in
these rooms. This revenue is called
banquet or catering service
C. Outlet / Ancillary Revenue Sources
Outlet
 Is defined as a food and beverage point of
sale. Ex. Restaurant, bars, lounges and
other outlets.
Ancillary
 Revenue sources outside of sleeping rooms
or food/beverage.
 Ex. Hotel’s business center, golf course,
tennis center, audio/visual services or gift
shop. Others sources include
products/services available inside the guest
room.
PROFIT MARGIN
Profit Margin
 Is determined by comparing the sales revenue
versus the cost incurred in providing a service or
product.
Room Cost
 Analysis, one must look at what it cost the hotel to
keep a room up and running in relation to what that
room is sold for to the average guest.
Food Cost
 Is defined as the cost of a particular food item in
relation to the price for which it is sold. The cost is
often measured as a percentage.
Captive Audience
 Is defined as guest who are staying at the hotel and
will, for convenience and lack of other options, utilize
the outlets in the hotel.
Opportunity Cost
 Sleeping rooms at a hotel are considered a
perishable commodity.
 Each night, when a room goes unsold, the hotel
loses that opportunity to ever sell it again. A hotel
cannot regain that opportunity
Group Catering Contribution
 Is defined as the catering business acquired by a
hotel that has all, or a major portion of, the attendees
staying at the hotel itself.
Prepared by:
Ms. Charlene P. Morillo
Instructor