UPM-ELD HTM PROGRAM 2019-20

UNIT 5

The Lodging
Industry

A. Pre-reading Discussion Questions

1. Where do you normally stay when you travel?
2. What facilities do you expect to have access to in these places?

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B. Previewing Vocabulary
Word Definition
(A) cure a medical treatment for an illness

(B) exploited to use something to gain as much from it as

possible
(C) retain to keep

(D) in the face of despite

(E) in jeopardy in a dangerous position or situation and likely be

lost or harmed
(F) abandon to leave a thing or place

(G) substitute to use in place of

(H) shift a change in direction/position

(I) wake up call an event that makes people realize that there is a
problem and they need to do something about it
(J) scenario a description of how things might happen in the
future

(I) Complete the sentences using the words above (word form may be different).
1. I had to ___ my car and walk home because it wouldn't start.

2. It is difficult to follow a strict diet, but sometimes we must be strong ___ desires.

3. When I gained 15 kilos in one month it was a real ___.

4. If we take the worst case example, it looks like it will be a disastrous ___.

5. Scientists are working on a ___ for the deadly disease.

6. People can still ___ some traditional knowledge even if they give up some of their old
ways of doing things.

7. You cannot ___ words from one language into another that easily.

8. You need to ___ away from your old habits.

9. Some banks have ___ people's information to help other businesses.

10. Our lives will be ___ if we climb that mountain.

(II) See how the 'bold' words (NOT underlined) are used in the reading passage.

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C. Reading Passage

The Lodging Industry

The United Nations World Tourism Organization (UNWTO) estimates that the world hotel
room inventory grows by about 2.5 percent a year. Occupancy rates tend to shift, but
they average about 65 percent overall in a normal year. Such places as London, Beijing,
New York, San Francisco, Hawaii, the Caribbean area, and the city of Las Vegas are noted
for higher occupancy rates and are able to retain their loyal customer base. World hotel ac-
commodations are heavily concentrated in Europe and North America, with Europe ac-
counting for 44.7 percent of the world’s room supply and the United States accounting for
27 percent, for a total of over 71 percent. Asia and the Pacific region account for 13.9 per-
cent, Africa 3.1 percent, and the Middle East 1.5 percent. In the face of a declining interest
in tourism in the European countries, growth is taking place in the Asia-Pacific region.

Who is the typical lodging customer? According to the AH&LA, 40 percent are business
travelers and 60 percent are leisure travelers. The typical business room night is gener-
ated by a male (69 percent), age 35 to 54 (48 percent), employed in a professional or man-
agerial position (53 percent), and earning an average yearly household income of
$105,764. Typically, these guests travel alone (64 percent), make reservations (91 percent),
and pay $123 per room night. The typical leisure room night is generated by two adults (51
percent), ages 35 to 54 (40 percent), and earning an average yearly household income of
$90,712. The typical leisure traveler also travels by auto (80 percent), makes reservations
(87 percent), and pays $105 per room night. For a hotel stay, 36 percent of all business
travelers spend one night, 22 percent spend two nights, and 42 percent spend three or
more nights. Of leisure travelers, 48 percent spend one night, 25 percent spend two nights,
and 27 percent spend three or more nights. People normally abandon the thought of
spending several nights in a hotel due to related costs.

Technology has had a profound influence on the lodging industry in recent years and more
hotel companies are exploiting this to their benefit. Those hotels which choose not to take
advantage of technology are in jeopardy as consumer expectations are changing. Over 90
percent of hotel companies have Web sites, and industry surveys show that business trav-
elers want Internet access in their guest rooms. Many hotels are becoming wireless.
Online expenditures for hotel bookings are increasing. Self-service check-in and check-out

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continues to grow as self-service kiosks are multiplying and substituting traditional meth-
ods of checking-in. The kiosks are located in the lobby and allow the guests to check in or
out of the hotel by simply swiping their credit card, eliminating the need to go to the front
desk. The kiosks are similar to the ones used by the main airlines. Major chains, such as
Hyatt, Hilton, Marriott, Sheraton, and Fairmont, are installing kiosks that allow busy custom-
ers to check themselves in and get a key. According to kiosk maker NCR Corporation, a
person who checks in at a kiosk can speed the process by 48 percent.

A study which was released in 2010 looked at the size, scope, and emerging trends of the
lodging industry and made comparisons with previous studies. The lodging industry has in-
creased their emphasis on market segmentation in recent years. Many of the big chains
offer products at almost every price level: full-service luxury hotels, luxury all-suite hotels,
resort hotels, moderately priced full-service hotels, moderately priced all-suites, moderately
priced limited-service, and economy or budget motels. Hotels and motels are classified in
a variety of ways. One of the most common is by location, such as resort, city center, air-
port, suburban, or highway. There are a number of very large companies in the lodging in-
dustry, and many of the big chains are getting bigger. Hotels (published by Marketing and
Technology Group, a Chicago-based business-to-business media company whose proper-
ties serve the global information needs of professionals in the food service and hospitality
industries) compiles an annual listing of the world’s 325 largest corporate hotel chains. The
October 2010 issue reports the fortieth annual listing of lodging’s giant companies. Hotels
reports that the InterContinental Hotel Group continues to head the list with a total room
count of 646,679. Wyndham Hotel Group (formerly Cendant) was second with 597,674.
Marriott International ranked third with 595,461 rooms. Hilton Hotels Corporation was fourth
with 585,060, and Accor Hotels rounded out the top five with 499,456.

The trend in the lodging industry has been away from independently owned and operated
properties toward chain and franchise affiliations, which get larger and larger. There are
also referral groups or voluntary membership associations. The only cure for independently
owned hotels is to join the bigger chains as both independents and chains have found it
profitable to join together to market their properties. The trend toward consolidation and
acquisition will continue because chains have the potential for improvement in productivity
and because of the advantages that accrue to large size. A typical scenario is that once
these independent hotels join a chain, they will access to greater and better resources.
Chains can most effectively use training programs, employee selection programs, major

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equipment with different layouts, prices, advertising, equipment, technology, marketing, and
so on, and what works well in one property can be employed chain wide. One reason for
the popularity of the referral groups is that members who are independent operators
achieve the marketing benefits of chains without chain membership.

Franchising is also well known in the lodging industry and has made a rapid penetration
into the marketplace. However, franchising generates mixed reports. Many managements
believe that it is difficult to control the franchises and maintain the quality that the chain ad-
vertises and the standards that are supposed to be met. The drop in standards has been a
wake-up call for some managements which has led to many chains buying back franchises
to ensure that management maintains the quality level desired. In other cases, firms are
moving ahead rapidly with franchising because they can conserve cash and expand more
rapidly by franchising. In addition, the franchisee, having invested his or her own capital,
has great motivation to succeed. Franchisees have the advantage that they receive a
known ‘‘name,’’ as well as the knowledge, advice, and assistance of a proven operator.
Franchising also spreads the costs of promotion, advertising, and reservation systems over
all outlets, making the unit cost much lower. If the franchiser has an excellent reputation
and image, the franchisee benefits greatly. Most of the companies with franchise operations
also operate company-owned units. Industry predictions are that as the industry grows and
matures, there will be less franchising, which will give the chains more control over their
properties and operations so that they can maintain the desired quality control. Increased
competitiveness and improved properties will necessitate having the ability to make these
improvements.
(I) For each statement, write (T) for true, (F) for false, or (N) for not given.

Statement T/F/N

1. London's occupancy rate averages above 65% annually.

2. Most business and leisure travellers spend three nights or more in hotels.

3. Checking in at a front desk could take twice as long as using a self-

service kiosk.
4. One of the most profitable market segments in the lodging industry is
motels.
5. The running of independent hotels is a growing trend in the lodging
industry.
6. There are no disadvantages to franchising.

7. Families tend to spend the most amount of money per night on hotels.

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(II) Summarise the passage above in 30-40 words.

• focus on the key ideas
• do not copy the text
• use synonyms

_________________________________________________________________________

_________________________________________________________________________

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(III) Complete the sentences using the underlined words from the reading passage.
Use each word once. (word forms may be different)
1. Most ________________ chain hotels, like the Intercontinental, ________________
independent hotels. Some of these hotels follow a ________________ system so they
must follow the rules of the chain company. They must ________________ high
________________ and this would require regular staff training programs.

2. ________________ prefer to stay in hotels which provide good value for money. Some
customers would prefer an ________________ rather than a well known international hotel
because they are usually cheaper. However, as time passes, these smaller hotels become
just another ________________ for the big hotel chains.

(IV) Write the letter of the sentence in the correct space. Each paragraph can have
more than one of the listed sentences.

A. There is a high ratio of employees to guest rooms, and room rates are considerably
above the market-area average.
B. At the top of the price category are the luxury hotels, which usually have from 150 to
500 guest rooms.
C. These hotels are filling a niche created by guests who want value in their lodging ex-
perience but also require some basic services.
D. Room rates are correspondingly lowest for this type of lodging property.
E. Full-service hotels offer a wide range of facilities and amenities.

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1.
( __ ) Limited-service hotels typically offer guest rooms only. There is little or no public
space, no meeting or function space, and usually no or very limited food and beverage facil-
ities. ( __ ) Terms previously used for this classification of properties included “budget” or
“economy” hotels. The average daily rate per occupied room for limited-service hotels in
2008 was $83.18. The average size of this type of property in 2008 was 122 rooms. Transi-
ent travelers, including business and tourists, make up 82.2 percent of the market mix for
limited-service hotels followed by conference groups at 6.9 percent. Contract and other
travelers account for 4.6 percent. ( __ )

2.
( __ ) Select-service hotels is a relatively new segment has evolved in much the same way
as fast casual restaurants have emerged in the food service sector. ( __ ) Not surprisingly,
then, select-service hotels represent the fastest-growing category of hotels. The biggest
reason for this segment’s success is that these properties appeal to both consumers look-
ing for a nice room at a value and business travelers who have to manage their expenses
closely—and spend less than they would at a full-service hotel. Ranging from 100 to 200
guest rooms on average, these hotels offer limited food service operations and scaled-
down meeting space. ( __ ) Also, they typically include lounge areas for working and social-
izing, hot breakfast service, and free high-speed Internet access. ( __ )

3.
( __ ) Usually there will be, in comparison to budget/economy properties, more public space
and meeting/function space, with at least one food and beverage facility. Room rates tend
to be equal to or slightly above market-area average. ( __ ) In 2008, the average rate for
full-service hotels was $155.82. These properties had, on average, 272 rooms and catered
primarily to business travelers and leisure travelers, which represent 57.3 percent, with
groups, contract sales, and other taking the remaining full-service rooms. ( __ )

4.
( __ ) Featuring upscale decor and furnishings that may be unique to the particular hotel,
these properties offer a full array of services and amenities. Such hotels typically have a
concierge service and several food and beverage operations, including a gourmet or fine-
dining restaurant, banquet facilities, and full room service (available 24 hours per day or
close to this). Recreational facilities or access for guests to nearby facilities is also usually
available. ( __ )

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D. Grammar: Practice Questions for Past, Present & Future

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E. Writing Task
There have been several complaints about the reception area where visitors to your hotel
arrive. Your manager has asked you to suggest how the reception area could be improved.

Write a letter to your manager.

In your letter:

• describe the complaints that have been made

• say why the reception area is important
• suggest how the reception area could be improved

Write at least 150 words.

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