FACILITIES

MANAGEMENT

TOPIC 1
THE
THE SCOPE
SCOPE OF
OF ACCOMMODATION
ACCOMMODATION
OPERATIONS
OPERATIONS

PREPARED BY:
NORHASIMAH BINTI HAMIM
TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

LEARNING OUTCOMES

At the end of this topic, the students would be able to:

Understand the general concept of hotel and hotel industry.

Explain the meaning and structure of independent ownership, franchise

agreements, and management contracts.

Outline the different classification of hotel categories and its

denominators.

Discuss the different range of customers on their needs and expectations.

Illustrate the relationship between the different service providers to

customers.

Describe the Green Environment concept in hotel industry.

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

TOPIC OUTLINES

Introduction
1.1 The Range of Accommodation Available throughout the International
Lodging Industry
1.2 The Range of Customer, Their Needs and Expectations
1.3 The Relationship between the Different Providers of Service to
Customers
1.4 Encouraging a Green Environment
Summary

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

INTRODUCTION

What is a Hotel?
What is the
Hotel Industry?

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation

 Hotels are typically referred to by hotel type or category.

 The type of hotel is determined primarily by the size and location of the
building structure, and then by the function, target market, service level, other
amenities, and industry standards.
 There are several ownership models employed in the sector today, including
 independent,
 management contract,
 chains and franchise agreements,
 fractional ownership, and
 full ownership strata units.

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation: Ownership Structures

INDEPENDENT HOTEL

 An independent hotel is financed by one individual or a small group and is

directly managed by its owners or third-party operators.
 The term independent refers to a management system that is free from
outside control.
 There are a number of very well-established independently branded hotels.
 These hotel companies have developed their own standards, support systems,
policies and procedures, and best practices in all areas of the business.

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation: Ownership Structures

MANAGEMENT CONTRACT

 This is a service offered by a management company to manage a hotel or

resort for its owners.
 Owners have two main options for the structure of a management contract.
 One is to enter into a separate franchise agreement to secure a brand, and
 then engage an independent third-party hotel management company to
manage the hotel.
 A slightly different option is for owners to select a single company to provide
the brand and the expertise to manage the property.

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation: Ownership Structures

CHAINS AND FRANCHISE AGREEMENT

 A hotel franchise enables individuals or investment companies to build or

purchase a hotel and then buy or lease a brand name to operate a business
and become part of a chain of hotels using the franchisor’s hotel brand, image,
goodwill, procedures, controls, marketing, and reservations systems.
 Franchise fees can be substantial and a franchisee must be willing to adhere to
the contractual obligations with the franchisor.
 Franchise fees typically include an initial fee paid with the franchise
application, and then continuing fees paid during the term of the agreement.

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation: Ownership Structures

FRACTIONAL OWNERSHIP

 In a fractional ownership model, developers finance hotel builds by selling

units in one-eighth to one-quarter shares.
 In this model, owners can place their unit in a rental pool.
 The investment return for owners is based on the terms of the contract they
have for their unit, the strata fees, and the hotel’s occupancy.
 Managing fractional ownership can be very time consuming for hotel owners
or management companies as each hotel unit can have up to eight owners.

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation: Ownership Structures

FULL OWNERSHIP STRATA UNITS

 In this financing model, hotel developers finance a new

hotel build with the sale of full ownership strata units.
 The sale of the condominium units finances the hotel
development.

The RuMa Hotel and Residences, KL

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation: Classification

Type of Examples of Type of Examples of

Classification Classification Classification Classification
Size (number of  Under 50 rooms Market and  Airport hotel
rooms)  50 to 150 rooms function  All-inclusive resort
 150 to 299 rooms  Bed and breakfast
 300 to 600 rooms  Business hotel
 More than 600 rooms  Boutique hotel
 Casino
Location  Airport hotel  Conference centre
 Casino hotel  Convention centre
 City centre hotel  Extended-stay hotel
 Resort hotel  Resort hotel
 Suite hotel
Level of service  Economy/limited  Timeshare and
service condominium hotel
 Luxury service
 Mid-level service

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1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation: Classification

Type of Examples of Type of Examples of

Classification Classification Classification Classification
Amenities  Accessibility Ownership and  Chain with a brand
 Airport affiliation affiliation
 Beach  Independent
 Casino
 City centre Industry standards  AAA Diamond Rating
 Childcare  CAA Diamond Rating
 Fitness club  Canada Select Star
 Golf Rating
 Pool  Canadian Star Quality
 Ski Accommodation
 Spa  Green Key Eco Rating
 Tennis  Trip Advisor
 Weddings Traveller’s Choice

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.1 The Range of Accommodation Available throughout the International Lodging Ind.

Range of Accommodation: Classification

Type of Examples of
Classification Classification
Brand standards  Aloft
(e.g., Starwood Hotels  Element
and Resorts has nine  Four Points by
different brands, each Sheraton
with its own set of  Le Méridien
standards)  Sheraton
 St Regis

Aloft, KL Sentral

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1.2 The Range of Customer, Their Needs and Expectations

Range of Customer: Their Needs and Expectation

 Competitive set is a marketing term used to identify a group of hotels that

include the competitors that a hotel guest is likely to consider as an
alternative.
 Hotels adapt and diversify depending on the markets they want and need to
attract to stay in business.
 For example, hotels found close to, or even within, convention facilities are a
great match for meetings and events, as well as the SMERF market (social,
military, educational, religious, and fraternal segment of the group travel
market).

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1.2 The Range of Customer, Their Needs and Expectations

Range of Customer: Their Needs and Expectation

Market Traveler Characteristics

Segment Type
Commercial Business  High-volume corporate accounts in city properties
 Stronger demand Monday through Thursday
 Most recession-proof of the market segments
 Lower average daily rate (ADR) than other segments
Leisure Leisure  Purpose for travel includes sightseeing, recreation, or
visiting friends and relatives
 Stronger demand Friday and Saturday nights and all week
during holidays and the summer
 Includes tour groups in major cities and tourist
attractions
Meetings and Corporate  Includes meetings, seminars, trade shows, conventions,
groups groups, and gatherings of over 10 people
associations,  Peak convention demand is spring or fall
SMERF  Proximity to a conference centre and meeting and
banquet space increase this market

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1.2 The Range of Customer, Their Needs and Expectations

Range of Customer: Their Needs and Expectation

Market Traveler Characteristics

Segment Type
Extended Business and  Often offers kitchen facilities and living room spaces
stay leisure  Bookings are more than five nights
 Often business related (e.g., natural resource extraction,
construction projects, corporate projects)
 Leisure demand driven by a variety of circumstances
including family visiting relatives or completing home
renovations, snowbirds escaping the winter

Mandarin Oriental, KL
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1.3 The Relationship between the Different Providers of Service to Customers

Distribution and Online Travel Agents

 Online travel agents (OTAs) are a valuable marketing and third-party

distribution resource for hotels and play a significant role in online
distribution (Inversini & Masiero, 2014).
 Smaller independent hotels that do not have the global marketing and sales
resources of a larger chain are able to gain exposure, sell rooms, and build
their reputation through online guest ratings and reviews.
 OTAs also help hotels offer combined value and packaging options that are
attractive to many consumers (for example, booking and search options for
hotels, car rentals, air fare, attractions, and travel packages).

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TOPIC 1: THE SCOPE OF ACCOMMODATION OPERATIONS

1.3 The Relationship between the Different Providers of Service to Customers

Distribution and Online Travel Agents

Distribution Channels Benefits

Hotel website or brand  Consumers prefer to book directly with the property
website  Instills consumers with the trust to book
(e.g., HotelName.com)  Reduces or eliminates booking fees

Online travel agent (OTA)  Generates a billboard effect

 Works well when OTAs are the most relevant channel to
the hotel’s target market
Mobile  Necessary to capture last-minute bookings

Global distribution system  Increases exposure to bookings through travel agents

(travel agents)  Helps capture consumers who continue to use traditional
channels
Social media  Provides opportunity to nurture relationships with
consumers by responding to guest concerns and
suggestions

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1.4 Encouraging a Green Environment

Green Lodging

What is Green Lodging?

Green lodging refers to any hotel or resort that commits to environmentally-
friendly practices.
Brands that seek green lodging certification; conserve natural resources,
reduce waste and lower greenhouse gases.
Why is Green Lodging Important?
Customer loyalty
Cost saving
Environmental impact

Permai Rainforest Resort, Sarawak

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1.4 Encouraging a Green Environment

Encouraging a Green Environment

 Many hospitality brands are moving towards green and sustainable

construction as a ground-up solution.
 Green environment that has been employed in hotel facilities:
 Net Zero construction
 Biophilic design
 Repurposed materials
 Sustainable architecture
 Biomimicry solutions
 Cloud computing

Villa Samadhi, KL

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SUMMARY

"I'm trying to surprise and delight the guest – now you call it an instagram
moment – does anyone need to take a picture of this? And if you haven't
succeeded, then do something different"
Barry Sternlicht, Founder, Starwood Capital Group

Ritz Carlton, Langkawi

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ACTIVITY/TUTORIAL

You are assigned to surf and explore Web

sites, and find out ONE (1) hotel in your
country that has employed any one/more
green environment practice in their
facilities.

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